Shopify Inc. (SHOP.TO)

Are delivering on revenues; have upped that guidance in the past 2 quarters at 25% revenue growth. Have found their niche in mid/small businesses, a market that will continue to grow.  The valuation has fallen, though has never been low. Are hitting cash-flow break even, and are on the verge to  accelerate earnings growth. They have staying power.

Fantastic business; however, has done well partly because it's one of a very few tech names in the TSX. Worries about valuation. Technicals are doing well -- higher highs and higher lows, above 200-day MA. But PEG ratio is over 3x. PE is about 90x, and forward is the same, for 30% growth rate. Any hiccups on meeting expectations, and the stock has a bit to fall.

Better risk-adjusted names elsewhere.

"The NVDA of the North". Different businesses, but in the sense that everyone is flocking to that name. Very few tech names to own in Canada, so when we do find one it tends to get run up. In top 5 by market cap of TSX, and probably 6-7% of the entire TSX. That's huge.

Question now is "Does it deserve that premium valuation?" Reaching an all-time high. Very consumer driven. Expectations for growth are way too high. For her to look at it, would have to decrease by more than half. Too risky for her firm.

Has been fantastic. Really good recent quarter. Right-sizing cost structure. Integrating with large-language-model search platforms, and so all searches essentially lead to Shopify. Taking advantage of AI, rather than being overcome by it.

This type of company is out of his wheelhouse. He looks at cash flow; SHOP's free cash flow is too expensive. SHOP has been growing like gangbusters. He watches it, because it's significant in Canada. The changes in US taxation did not impair SHOP, surprisingly. Their business keeps going very well. Is a momentum name, but growth could slow and the street could focus on its cash flow down the road. The PE is rich.

He trimmed a bit. He'd beef up the position again if it dropped 10-15%. One of the companies that will dominate  the world for the next 1-2 decades. 

A tough one. Lots of speculation in the name. If you look at it with a purely quantitative view, you'd be a bit nervous. Still in the high growth, ramping up operations, risky "startup" phase. Improving ROC. Valuation makes him pause.

Doesn't have a problem owning it, but should not be core. If your portfolio has 20 stocks, 5% each, then this one should only be ~2%. With today's earnings pop, good to trim.

Pay attention to the old highs (~$200), and stock's getting close to them. Recent peak does appear to be breaking the last one. Probably will get to the $200 area, so still a few bucks to go. From there, that's when to start chewing your nails, as it's stalled there before when those old buyers just want their money back.

Still a decent runway to price target of $178, so don't trim. Look to trim if it gets above $170. Because of the volatility, writing some calls would be pretty lucrative.

Very high valuation. On any fears of potential slowing, stock moves quite a bit. People probably trade it a lot. Great company, democratizing e-commerce for everybody. Tariffs may impact volumes until we get more clarity.

It is growing at 20% per year but trading at 100X earnings so there is a valuation risk. It is a good company but not so much the stock. It uses different software for different vendors and expanding internationally. It could go sideways or down.

AMD vs. Shopify

Prfers SHOP. AMD is fully priced. He targets $125 USD for SHOP. Don't sell AMD, just raise some calls against it.

No idea if there's more upside. Very expensive. Doesn't have the consistency he looks for. Better opportunities at better prices elsewhere.

Fine job in utilizing AI, becoming more efficient. Cosmetics and clothing are two of its bigger channels, and these are among the easiest to switch supply chains. This makes those segments relatively less impacted by trade and tariff volatility. No dividend.

Look at the 5-year chart. The peak in 2021 concerns him on valuation. Not surprising that it came into resistance when it entered a similar window earlier this year. Likes buying dips, don't chase here.