In the event you’re sitting on $25,000 and questioning find out how to allocate it in a Tax-Free Financial savings Account (TFSA), it’s price pondering long run. In the correct progress inventory, that $25,000 may doubtlessly develop into $250,000 with time and endurance. Probably the most promising choices on the TSX right now is Shopify (TSX:SHOP). Whereas many buyers consider Shopify as a U.S. inventory, it’s a Canadian tech heavyweight that provides publicity to world progress, e-commerce growth, and even the consequences of a rising Canadian greenback.
A glance again
Shopify has come a good distance since its founding in Ottawa. It now powers thousands and thousands of companies worldwide, serving to retailers promote on-line, in shops, and throughout platforms like Instagram. In its most up-to-date earnings report for Q1 2025, Shopify reported income of US$2.4 billion, beating expectations of US$2.3 billion. The e-commerce platform additionally delivered earnings per share of US$0.20, beating forecasts of US$0.17. That type of regular outperformance issues, particularly in tech, the place buyers are fast to reward or punish primarily based on quarterly numbers.
What’s extra necessary is that Shopify is setting itself up for future progress. Administration guided for mid-twenties share progress for the second quarter, which exceeds what analysts had anticipated. That’s an indication the enterprise continues to be increasing at a powerful clip regardless of the robust macroeconomic setting. Shopify additionally continues to innovate in synthetic intelligence (AI), introducing instruments that assist retailers construct shops, handle stock, and reply to prospects extra effectively. These AI options usually are not simply buzzwords; they’re already getting used to enhance the client and service provider expertise, which in flip strengthens Shopify’s ecosystem.
Give attention to power
One other main transfer was Shopify’s choice to divest its logistics arm in 2023. That shift allowed the corporate to develop into extra targeted and streamlined. As a substitute of stretching itself skinny managing warehouses and delivery, Shopify is again to doing what it does greatest: offering a platform for e-commerce. This transfer has improved margins and diminished capital expenditures, releasing up sources for innovation and progress.
From an investor’s perspective, the case for Shopify inventory is compelling. The inventory is just not low cost by conventional metrics, however it hardly ever has been. What issues is that it continues to develop income, enhance profitability, and broaden into new verticals and markets. Analysts anticipate earnings per share (EPS) to develop by 11% in 2025 and 28% in 2026. That type of forecast exhibits there’s room for long-term beneficial properties, which is precisely what you need in a TFSA funding.
Issues
Turning $25,000 into $250,000 isn’t going to occur in a single day. However at a mean annual return of round 20%, it’s doable in slightly below 15 years. Shopify inventory delivered robust returns over the previous decade, with early buyers seeing unbelievable beneficial properties. Whereas these early days are behind us, the long run nonetheless seems to be shiny. With its huge moat, world presence, and sticky buyer base, Shopify inventory is in an ideal place to proceed rewarding shareholders.
There’s additionally a possible tailwind from the Canadian greenback. As a result of Shopify earns a big portion of its income in U.S. {dollars}, a rising loonie could make these earnings price extra in Canadian phrases. For Canadian buyers, which means holding Shopify in your TFSA might be a wise forex play. If the loonie strengthens, your returns in Canadian {dollars} may see a lift, particularly in the event you’re shopping for the Canadian itemizing on the TSX.
Backside line
In fact, all investments include danger. Shopify is a progress inventory, which suggests it may be unstable. There will likely be quarters when the corporate doesn’t meet expectations, or when tech shares fall out of favour. However in the event you’re keen to carry on by means of the bumps, the long-term trajectory stays intact. Shopify continues to be rising. It’s nonetheless beating expectations. And it’s nonetheless increasing its capabilities with AI and worldwide providers.
With $25,000 in a TFSA and a long-term outlook, Shopify might be one of many smartest methods to succeed in $250,000. It received’t be straightforward, and it received’t be quick. However with the correct inventory and sufficient time, it’s completely doable. Shopify inventory provides the type of progress story that makes it well worth the wait.
