After a bruising first quarter of the year, now seems like a decent time to start thinking about picking up shares of a growth play, now that such names are still out of favour on Wall and Bay Street. Sure, some growth names, especially in the AI scene, still trade at rich premiums. But, for the most part, multiples have come down by quite a bit. And if you’re a long-term investor who can see through the concerning headlines, I think it makes sense to start being a bit more optimistic with the stocks that way too many investors are quick to count out of the game.
It’s hard to be a bull when there are so many bears around you, but if you want to be a value investor, sometimes, buying something after a market panic is the best way to go. While I have no idea if the recent market rally is the real deal or if we’ll be right back to the year’s lows by the week, I do think that there are good deals to be had as investors digest the wave of choppiness that just hit them.
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So, what are the top growth plays to target this month?
I’d personally look to the tech sector for unloved names that may have been discounted at the hands of new tech tools by Anthropic and OpenAI.
Sure, agents and AI are going to disrupt, but I think it’s quite absurd to just sell anything that’s software-related at a time like this. Of course, just because you’re brave enough to buy the dip in the hardest-hit corner of tech does not mean you should ignore the risks.
Technological disruption can be quite dangerous if you underestimate it. And since AI is one of the fastest-rising, most disruptive technologies we’ve had in a while, I do think being careful with which names to pick from the rubble is the move for contrarians.
Shopify stock has legs amid the rise of agentic commerce
Shopify (TSX: SHOP) is one of the beaten-down tech names that I think won’t be left behind as AI takes off and agents become more involved in the day-to-day operations. With the stock marching more than 3% higher on Monday as a part of a broader relief rally in software, I think it’s time to start viewing Shopify as less of a stock that’s in danger from the rise of AI agents and more as a company that could monetize the technology in a massive way. But what makes me so bullish about Shopify compared to most other firms?
I think it lies in the merchant base, which, in my opinion, won’t be so quick to start up shop on some other AI-native competing platform. Arguably, Shopify is becoming more AI-native by the day as the firm rolls out new technologies and standards to enable the rise of agentic commerce. Sure, it’s hard to tell if Shopify will be more of a disruptor (with agents and AI tools) than a firm that could lose share to AI.
But at the end of the day, I do think the firm is well-positioned to generate considerable cash flows as AI becomes more monetizable. Even if Anthropic narrows its focus on e-commerce, which I think should be expected, Shopify has the data, the magic (AI tools), the convenience (payments), and, perhaps most importantly, the trust of merchants.
And if Shopify can help merchants unlock the power of agents, I do think that merchants will save more, sell more, and ultimately stick within that Shopify ecosystem, even if it means taking a pass on rival products out there. At the end of the day, Shopify is investing heavily in many of the next-level innovations that most other non-specialist AI model makers are.
