Prediction: The Dip in This TSX Stock Is a Buying Opportunity

Hot stocks can still hand investors a gift. The trick is knowing the difference between a broken story and a stock that simply ran too far and too fast before cooling off. A strong buying opportunity usually shows up when a company still posts solid revenue growth, expands profit, and keeps finding new ways to win, even while the share price slips on valuation worries or market nerves. That kind of dip can look especially interesting in a trending stock, because enthusiasm fades faster than fundamentals. So let’s consider stocks on the dip on the TSX today.

SHOP

That is why Shopify (TSX:SHOP) looks so interesting right now. Shopify stock gives merchants the tools to build online stores, handle payments, manage shipping, sell in person, and now increasingly reach shoppers through artificial intelligence (AI)-driven discovery. It’s not some tiny niche platform anymore. Shopify stock ended 2025 with more than 14% of U.S. ecommerce market share, and millions of businesses in more than 175 countries use it. That gives it scale, brand power, and plenty of room to keep layering on higher-value services.

Over the last year, Shopify stock kept pushing deeper into AI and merchant tools. Its Summer 2025 Editions launch focused on AI store building, design help, and a more capable Sidekick assistant. Then its Winter ’26 rollout leaned even harder into “agentic storefronts,” designed to make merchant products discoverable in AI chats and other next-generation shopping channels.

Yet the market still treats Shopify stock like a fast-moving growth story, and growth stories get punished fast when expectations run hot. The shares recently traded around $163, down sharply from a 52-week high of $253.10. That pullback looks dramatic, but the business itself has not fallen apart. If anything, Shopify stock spent the last year building more tools, widening its reach, and keeping merchants inside its ecosystem.

Into earnings

The numbers help make the case. In the fourth quarter of 2025, Shopify stock brought in US$3.7 billion in revenue, up 31% year over year, while gross merchandise volume climbed to US$123.8 billion. Operating income reached US$631 million, up from US$465 million a year earlier, and free cash flow came in at US$715 million. For the full year, revenue rose 30% to US$11.6 billion, and free cash flow topped US$2 billion. Those are not the numbers of a company losing steam.

Dig a little deeper and the picture still looks strong. Merchant solutions revenue rose 35% in the quarter to US$2.9 billion, while subscription solutions revenue increased 17% to US$777 million. Full-year operating income hit US$1.5 billion, up from US$1.1 billion in 2024. Shopify stock also finished the year with US$1.6 billion in cash and US$4.2 billion in marketable securities, giving it plenty of flexibility to invest, defend its turf, and reward shareholders.

Valuation is where the debate starts. Shopify stock trades at about 66 times forward earnings, so nobody can call it cheap in the classic sense. But investors are paying for a platform that keeps compounding, keeps generating real cash, and just launched a US$2 billion buyback. The future outlook still looks encouraging as well. Management said orders coming from AI search rose 15-fold since January 2025. That is early, and it could prove lumpy, but it shows Shopify stock is not standing still while ecommerce changes.

Bottom line

Of course, there is risk. Shopify stock still depends on healthy merchant activity and consumer spending, and management itself flagged trade measures such as tariffs as a risk factor. A stock with this kind of valuation can stay volatile, especially when software names fall out of favour.

But when a company keeps growing at this pace, keeps printing cash, and keeps finding fresh catalysts, a dip starts to look less like a warning and more like an opening. Shopify stock may not be a bargain-bin stock, but this TSX name still looks like a buying opportunity for investors willing to think past the next market wobble.

The post Prediction: The Dip in This TSX Stock Is a Buying Opportunity appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.