It might be time to think about putting a bit of money to work on the dip in some of the market’s fallen growth darlings. Growth-to-value rotations can turn at any moment and for any reason, or they might drag on for months, quarters, or even a few years. In any case, they can be tough to time, and investors may wish to implement more of a “barbell” approach that weights value and safety on one side with growth and the riskier names on the other. That way, investors will be poised to do well whatever Mr. Market deems is next.
Right now, value is shining, but if history is any suggestion, it might not take all too long for growth to get back in the driver’s seat, especially if valuations contract in a way such that suddenly it’s growth that becomes the name value, and value becomes the new overpriced safety trade.
Either way, let’s look into a growth stock candidate that might make sense to buy if you’ve got some leftover TFSA cash. Let’s say $2,000 or so in dividends and unused contributions have piled up in recent years, and you’re looking to take advantage of the new wave of volatility hitting tech, growth, and AI.
While weakness could beget even more downside, those with extended time horizons, I think, shouldn’t wait around for growth to settle and recover because, by then, the best of deals will have been scooped up by other investors. Sometimes, you’ve got to feel the least comfortable when buying to be able to get the best value.
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Shopify
Look no further than those beaten-down shares of Shopify (TSX: SHOP), which gained more than 6% on Wednesday in a big bounce-back session for Bay and Wall Street. Even after a strong single-day bounce, shares of SHOP are still off 29% from their highs, driven lower by AI disruption uncertainties, the U.S.-Iran conflict, and, of course, the capital expenditure shock that worked its way across tech. While things couldn’t be more uncertain, I still find Shopify to be a great growth play with some of the most furious AI tailwinds out there.
Not a whole lot has changed since the year began, and shares found themselves falling into a bit of a tailspin. While Shopify looks cheaper, the forward price-to-earnings (P/E) of 63.2 times still prices in a lot going right. Just how much of the AI shopping boom is baked into the current multiple? It’s really tough to tell.
Either way, Shopify’s shift to agentic commerce via its Universal Commerce Protocol (UCP) could be a source of a major upside surprise. Now, I have no idea when agentic storefronts will drive sales higher and by how much. But I think it’s an absolute mistake to discount the potential behind such drivers, especially since many investors might be a bit fatigued from all the AI news of late. When it comes to Shopify, there’s real monetization potential here, whether or not agents are how consumers shop online in the future.
Personally, I wouldn’t want an AI to shop on my behalf unless, of course, it’s for things I already pay for. Expensive surprises are never fun. Either way, agentic shopping could be the new way to discover items across parts of the web that might not be all too easy to reach. And that’s where the upside for Shopify could arise.
