Done With U.S. Tech? Here's the TSX Stock I'd Buy

2026-02-18 16:20:00 ET

U.S. tech looked unbeatable for a while. It combined huge earnings with a simple story: artificial intelligence (AI) will lift everything, and the biggest platforms will take the biggest slice. That story still has legs, but the market started charging rent for it. Valuations got stretched, investors have started nitpicking margins, and every earnings report now needs to be perfect. A TSX stock can look better when it still has real growth, but it also has a clear, repeatable engine that does not depend on the next hype cycle.

Consider Shopify

Over the last year, Shopify ( TSX:SHOP ) has reminded investors it can grow like a rocket and still act like an adult about cash. It posted 2025 revenue of US$11.6 billion, up 30%, and it generated US$2 billion in free cash flow for the year. The news flow has also highlighted a big strategic shift. Shopify stock wants to own the rails of modern commerce, not just the online store.

It leaned into payments, B2B, offline, and tools that make selling across channels easier, while also pushing hard on AI features designed to help merchants build faster and sell smarter. In its latest update, management framed 2026 as a new era of AI commerce, and it called out investments across products like Catalog, Sidekick, and its broader platform.

At the same time, Shopify stock can swing hard on one detail, even when the headline results look strong. After the latest report, investors focused on profit and cash flow margins, and the stock sold off despite a punchy revenue outlook. That is the trade-off. You get growth, but you must tolerate mood swings.

Into earnings

In the fourth quarter of 2025, Shopify stock reported revenue of US$3.7 billion, up 31% year over year, and gross merchandise volume of US$123.8 billion, also up 31%. It posted operating income of US$631 million and free cash flow of US$715 million, which worked out to a 19% free cash flow margin. That mix shows both scale and discipline, and it explains why investors still treat it as one of Canada’s true global tech champions.

The 2026 setup looks busy in a good way. Management expects Q1 2026 revenue growth in the low-thirties percentage range year over year, which signals confidence that demand stays resilient. It also authorized a US$2 billion share repurchase program, which tells you it believes it can invest for growth and still return capital from a position of strength.

Valuation is the one area where you do not get to pretend it is “cheap.” Shopify stock trades like a premium growth business because the market expects it to keep compounding. The way I look at it is simple: you are paying up for durable growth, not for a bargain. If growth slows or margins disappoint, the multiple can compress fast.

Bottom line

So, could Shopify stock be a buy instead of loading up on U.S. tech? Yes, if you want a single TSX name with global reach, real scale, and a track record of turning growth into cash, and you can stomach volatility. No, if you want a “sleep well every night” stock, or if you cannot handle a premium valuation in a market that has started to question software winners more aggressively. If you feel done with chasing the same U.S. mega-caps, Shopify stock gives you a different way to own tech’s upside, with a Canadian ticker and a business that still has a lot to prove in 2026.

The post Done With U.S. Tech? Here’s the TSX Stock I’d Buy appeared first on The Motley Fool Canada .

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 .

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