With a market capitalization of almost $120 billion, Shopify (TSX:SHOP)(NYSE:SHOP) is one of the most significant companies in Canada. The Canadian blue-eyed tech stock has been one of the country’s crowning achievements in the last five years.
The tech stock is up by more than 3,400% from its valuation five years ago. It has only started to see its growth slow down lately, but it remains one of the top players in the burgeoning e-commerce sector. However, Shopify might not be the best high-growth tech stock for you to consider right now.
Remarkable heights for Shopify
There is no denying the fact that Shopify has been an exceptional investment for those who placed their faith in the stock early on. Despite the slowdown in its growth, Shopify will likely continue to outperform Canada’s broader market for decades. However, its valuation and market cap are two reasons investors might want to be wary of the stock.
It may provide investors with remarkable long-term returns. The only problem is that Shopify does not present the same growth potential it had a couple of years ago. Lightspeed POS (TSX:LSPD)(NYSE:LSPD) could be a better asset for this purpose.
Amazing potential for Lightspeed
While not as remarkable a story as Shopify, Lightspeed has undoubtedly established itself as an excellent growth stock to consider. The cloud-based solutions provider for retailers took a massive hit with the onset of COVID-19. The company’s earnings declined, as most of its customers had to shut down businesses amid the lockdown.
However, its new offerings allowed Lightspeed to capitalize on the surge in the migration to the e-commerce sector. The stock fell to severe lows in March 2020 but has since grown more than 420%. Lightspeed is trading for $63.11 per share, and it has a $6.59 billion market capitalization.
Investing in the stock right now makes the stock far more accessible than Shopify. Additionally, there is more good news in the fact that the e-commerce sector has a lot more room to grow. Lightspeed has become a necessity in the time of social-distancing measures. It can increase revenue and earnings at a higher rate compared to the average stock trading on the TSX.
If another market crash happens, investors can bank on Lightspeed to be an excellent recovery stock that they can add to their portfolios. Even if the stock does not decline with the rest of the market, it has the potential for significant capital gains in the coming years.
Foolish takeaway
While I do not mean to disregard Shopify, I feel that Lightspeed could be a better bet for investors seeking high-growth tech stocks. Shopify may be very bullish in the long run, but there is still a matter of short-term uncertainty due to its high valuation. However, Lightspeed POS looks poised to provide its investors with both short- and long-term bullish results.
