After a fantastic year, the S&P/TSX Composite Index is hovering around new all-time highs. The benchmark index for the Canadian stock market reflects the strength of the market. Savvier investors know that it might be a better choice to reconfigure their portfolios at such a time. After all, selling off investments after profiting from them makes sense. Why wait for a downturn to crash the value of your holdings when you can cash out with significant profits in your hand?
So many TSX stocks have been winners over the years that investors might feel tempted to trim or sell out of them. There is a Canadian tech stock that might fit the bill as one such investment: Shopify Inc. (TSX:SHOP).
Shopify
Shopify is a $282.4 billion market-cap TSX tech stock that has been a darling holding for growth-seeking investors. The company’s e-commerce platform lets merchants of all sizes create an online presence, fulfilling all their needs in terms of selling online. It is no secret that the e-commerce industry is only going to continue growing at an immense pace.
As of this writing, Shopify stock trades for $217.03 per share. At current levels, the stock is up by over 6,100% from its Initial Public Offering (IPO) price almost 11 years ago. Considering the massive uptick in such a short amount of time, it makes sense to conclude that the easy money has already been made.
However, it does not mean that newer investors cannot see massive returns by investing in its shares right now.
The AI catalyst
The growing demand for e-commerce alone can provide the tailwinds for substantial long-term growth for the stock. However, there is more growth to be had due to the power of Artificial Intelligence (AI).
The company can see a significant boost in its business through agentic AI and consumer spending via chatbots. There is still time to see how things develop, but there is an increasing possibility that consumers will be relying a lot on AI for their shopping. While it might no longer be able to deliver the kind of returns that early investors enjoyed, there might be much more growth to leverage for investors right now.
Foolish takeaway
Investing in Shopify stock has not been entirely easy for investors over the years. The initial launch saw it grow in popularity and reach amazing heights. At one point, Shopify overtook Royal Bank of Canada as the largest stock on the TSX by market capitalization. However, the bursting of the tech bubble a few years ago brought the stock back down to more reasonable levels.
Right now, Shopify stock seems like a good investment if you have a long investment horizon. Mind you, there might be periods of extreme volatility with around 30% declines ahead. Panic selling can wipe millions from the market at a moment’s notice. However, investors who think about the long run can stomach short-term volatility to unlock immense gains in the future. I would hold on to Shopify shares right now and even consider adding to my position during the next downturn.
