Canadian Investors: Yes, You Should Buy U.S. Stocks

Canadian investors should consider buying U.S.-based growth stocks such as Tesla to benefit from outsized gains over time.

| More on:
stock research, analyze data

Image source: Getty Images

Canadian investors should buy U.S. stocks to benefit from diversification. Moreover, the U.S. is the world’s largest market, and several S&P 500 companies generate revenue across geographies, which lowers overall risk.

Here are three top U.S. stocks Canadian investors should consider buying in July 2023.

Tesla stock

The largest electric vehicle manufacturer globally, Tesla (NASDAQ:TSLA) is valued at a market cap of US$830 billion. TSLA stock has already returned 3,230% to shareholders in the last 10 years, outpacing the broader markets by a wide margin. However, shares of the EV giant are also down 35% from all-time highs, allowing you to buy the dip.

Despite its massive size, Tesla increased vehicle deliveries by 83% year over year to 466,140 units in the second quarter (Q2) of 2023, as the company ramped up production at its Texas-based assembly plant.

Due to its market-leading position and first-mover advantage, Tesla also enjoys robust profit margins. For example, its sales in the last 12 months stood at US$86 billion, while free cash flows were close to US$5.8 billion. Comparatively, Ford reported a free cash flow of US$3.46 billion compared to sales of US$165 billion in the past four quarters.

But Tesla is not immune to macro challenges. For example, its inventory has risen from US$4.3 billion to US$14.4 billion in the last two years. Due to an inflationary environment, Tesla is also wrestling with narrowing operating margins.

MongoDB stock

Shares of enterprise-facing cloud-based company MongoDB (NASDAQ:MDB) have more than doubled year to date. Valued at a market cap of US$29 billion, MongoDB stock is priced at 18.7 times forward sales, which is quite steep. But the company is on track to expand adjusted earnings from US$0.81 per share in fiscal 2023 to US$2.11 per share in fiscal 2024.

MongoDB is well positioned to benefit from the growing demand for customized software solutions that aim to improve efficiencies and create additional revenue streams for corporates.

The company is among the most popular database entities globally, which supports the developer community. So, it is a top choice for mobile applications, e-commerce platforms as well as social media companies.

MDB stock has surged over 1,200% since its IPO (initial public offering) in October 2017. It remains a solid long-term investment for investors in 2023.

The Trade Desk stock

The final U.S. stock on my list is The Trade Desk (NASDAQ:TTD). Valued at US$38 billion by market cap, TTD stock has returned 2,470% to shareholders since its IPO in 2016. Operating in the ad-tech space, TTD should benefit from multiple secular tailwinds in the upcoming decade.

First, digital ads will account for 58% of total ad spending in 2023. Second, programmatic advertising is the fastest-growing segment, which should increase demand for TTD’s portfolio of products and solutions.

Finally, The Trade Desk continues to focus on widening its product suite. Last month, it launched an AI-powered media buying platform called Kokai, which allows marketers to purchase optimized ad impressions at the best price.

Priced at 65 times forward earnings, TTD stock is expensive. But its adjusted earnings are forecast to rise by 24% annually in the next five years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MongoDB and The Trade Desk. The Motley Fool recommends Tesla. The Motley Fool has a disclosure policy.

More on Tech Stocks

A person uses and AI chat bot
Tech Stocks

AI Where No One’s Looking: Seize Growth in These Canadian Stocks Before the Market Catches Up

Beyond flashy headlines about generative AI, these two Canadian AI stocks could deliver strong returns for investors who are willing…

Read more »

Data center servers IT workers
Tech Stocks

Better Buy: Shopify Stock or Constellation Software?

Let's dive into whether Shopify (TSX:SHOP) or Constellation Software (TSX:CSU) are the better options for growth investors in this current…

Read more »

nvidia headquarters with nvidia sign in front
Tech Stocks

Nvidia Just Delivered a Beat-and-Raise Quarter. There’s 1 Red Flag Investors Shouldn’t Ignore.

The chipmaker continued to benefit from robust demand for artificial intelligence (AI). But can it last?

Read more »

GettyImages-1473086836
Tech Stocks

Why Super Micro Computer Stock Is Soaring Today

The volatile stock is getting a boost from Nvidia.

Read more »

Snowflake logo in snowflake office on wall_snowflake-1
Tech Stocks

Here’s Why Snowflake Stock Skyrocketed Today

Shares of the data company are up 32% for the day.

Read more »

man touching magnifying glass button on floating search bar internet google search engine
Tech Stocks

Why Alphabet Stock Was Sliding Today

The parent company of Google is facing heat from U.S. regulators.

Read more »

chart reflected in eyeglass lenses
Tech Stocks

Top Canadian AI Stocks to Watch in 2025

Celestica (TSX:CLS) stock and another Canadian AI stock are worth watching closely this holiday season.

Read more »

Nvidia Voyager Headquarters
Tech Stocks

Why Nvidia Stock Rallied (Again) on Tuesday

The chipmaker is expected to report earnings this evening.

Read more »