Investors who are looking to invest in technology stocks to gain growth in their capital have many choices in 2018. A broader trend in the global economy suggests that the future is bright for companies that are innovating, disrupting traditional businesses, and making people’s lives less complicated.
The two most promising trends, which are likely to dominate in many years to come, are e-commerce and internet security. In these two areas, you’ll continue to see explosive growth, as companies invest heavily to embrace online commerce, while the established ones beef up their network security to protect against cyberattacks.
If you’re thinking of benefiting from these two trends which are shaping our new economy, then I have two technology stocks that I think will continue to soar in the years to come.
Shopify Inc. (TSX:SHOP)(NYSE:SHOP) is an e-commerce platform provider that helps small- and medium-sized businesses to set up their online stores. The difference between Shopify and its competitors is that this Ottawa-based company has found a very simple, cost-effective, and secure way to meet merchants’ needs.
In a matter of few years, Shopify has achieved the reliability and scale that many top technology companies envy. Shopify currently powers more than 500,000 businesses in 175 countries with some top global brands using its platform.
The popularity of its platform has fueled consistent revenue growth, with sales surging more than 90% in 2016 following a year when they nearly doubled. Analysts are forecasting revenue to grow another 70% this year, followed by 45% growth next year.
Online shopping continues to be the key growth driver for businesses in both developed and emerging economies. You can count on Shopify stock for capital appreciation. In the past two years, investors in Shopify have made a killing, seeing their investment grow 326%.
Trading at $146 a share, Shopify stock is up 15% in the first three weeks of 2018. It’s tough to give a price target to a high-octane technology stock such as Shopify. But I recommend this stock to investors seeking explosive growth in their capital over the medium term.
But I think BlackBerry’s focus to cash in on the its growing investment on network security is a winning strategy. For purely contrarian investors, the timing to get bullish on this stock might be just right. Here is why.
Rebranded as a cybersecurity software and services company dedicated to securing the enterprise of things, BlackBerry has won several high-profile deals, which suggests that the company is on a right track.
This month, Chinese internet search firm Baidu Inc. announced that it will work with BlackBerry to develop self-driving vehicle technology. Baidu will run its smartphone integration software for connected cars and its AI system on the BlackBerry QNX Platform. The QNX operating system, which powers automobile infotainment systems, won 10 automotive supplier contracts in the last quarter.
Trading at $16.62 a share, BlackBerry is a cheap turnaround play for investors who believe in the company’s direction. Soaring ~75% in 2017, I think these double-digit gains will continue in the years to come.
The bottom line
When you invest in technology stocks, you invest in trends and ideas. E-commerce and online security are two powerful trends which will attract a lot of investments in the years to come. Both Shopify and BlackBerry are strategically positioned to ride through this wave and benefit their shareholders.
It's not Apple. Or Google. Verizon or AT&T. In fact, you've probably never even heard this company's name. Yet it's so vital to the "smartphone" revolution that its shares have doubled time and time again since they first hit the shelves. And if industry insiders are right, the rapidly escalating war between iPhone and Android is about to push this stock even higher.
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Fool contributor Haris Anwar owns shares of BlackBerry. David Gardner owns shares of Baidu. Tom Gardner owns shares of Baidu and Shopify. The Motley Fool owns shares of Baidu, BlackBerry, Shopify, and SHOPIFY INC. Baidu, BlackBerry, and Shopify are recommendations of Stock Advisor Canada.