3 Top Stocks in Tech Sector to Buy Now

The retracement in these tech stocks presents an excellent entry point for outsized growth.

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I have said before that it’s always good to have some high-quality tech stocks in your portfolio. The way tech stocks dominated 2020, despite the significant disruption from the pandemic, proves allocating a portion of your portfolio in tech stocks could boost your returns significantly. 

Moreover, shares of a few high-quality tech companies have retraced from their 52-week highs in the recent past and provide a good entry point for long-term investors. Here are three top tech stocks with enough fuel that could continue to drive the uptrend in these stocks.

Dye & Durham  

Shares of Dye & Durham (TSX:DND) have decreased about 23% from its 52-week high of $28.68. The temporary closure of many courthouses in Canada amid the pandemic took a toll on its litigation solutions product line. Given the weakness, its revenues decreased by about 6% in the most recent quarter and weighed on its stock price. 

However, as the economic activities gradually pick up, the demand for Dye & Durham’s products is likely to improve and lift its stock higher. The company has multiple growth catalysts that could support the uptrend in its stock. 

Dye & Durham is expected to benefit from its ability to acquire fast-growing companies that accelerate its growth and open new avenues. Moreover, its strong blue-chip customer base, lower churn rate, and higher average customer tenure continue to support its stock. 

Dye & Durham’s strong base business, solid M&A pipeline, and a large addressable market suggest that the company could deliver strong gains in the coming years. 

Lightspeed POS

Lightspeed POS (TSX:LSPD)(NYSE:LSPD) stock corrected 15% from its 52-week high. A small correction was on the cards given the massive rally in Lightspeed POS stock over the past several months. 

Lightspeed is benefitting from secular industry trends, and the uptrend in its stock is likely to sustain over the next several years. The structural shift toward omnichannel POS is driving the demand for Lightspeed’s products and offerings, and the company remains well positioned to capitalize on the surge in demand.   

Lightspeed POS serves a large and underserved market, which provides ample room for growth and drives its customer base. The expansion of its products and focus on high-margin services are likely to support its average revenue per user and profitability in the long run. 

The migration of small- and medium-sized businesses towards cloud-based omnichannel POS has created a multi-year growth opportunity for the company and could continue to support the rally in its stock. 

Shopify

Shares of Shopify (TSX:SHOP)(NYSE:SHOP) are down about 18% from its 52-week high and present a good entry point for long-term investors. Over the years, the e-commerce behemoth has generated staggering returns for its investors, and the rally in its stock could continue, thanks to the structural shift toward e-commerce. 

Amid high demand, Shopify is adding new selling channels to its platform and rapidly expanding its high-value services like shipping. The move is likely to help the company in increasing its merchant base and support its margins. 

Shopify’s large addressable market, expansion of product and services, strong industry tailwinds, and growing merchant base is likely to drive outsized growth in its stock. 

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 Sneha Nahata has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool owns shares of Lightspeed POS Inc.

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