TSX stocks are making new highs as recently falling tech stocks showcased a significant rebound on Tuesday. The TSX Composite Index continued to post another intraday record high near 18,711 yesterday before settling 18,599. Improving economic growth prospects across North America amid a gradually subsiding pandemic is one of the key reasons boosting investors’ confidence in 2021. Some major tech and electric vehicle (EV) stocks — that saw a big correction in the last few weeks — are seemingly ready for another rally. Let’s take a closer look.
Tesla stocks staged a sharp recovery
The shares of American electric carmaker Tesla (NASDAQ:TSLA) jumped nearly 20% on March 9 after falling for the previous five consecutive sessions. After yesterday’s sharp rally, it was trading with a minor 0.3% loss on a month-to-date basis. About a month ago, the Elon Musk-led electric carmaker announced its big US$1.5 billion investment in Bitcoin. Since then, its stock price has seen extreme volatility. Bitcoin posted its all-time high of US$58,354 on February 21. The cryptocurrency saw a sharp correction for the next seven days, but it’s approaching its record high levels again.
The rising EV demand has helped Tesla report profitability in the last six quarters in a row. That’s why its stock yielded over 740% positive return last year.
Canadian tech stocks also recovered
Canadian tech stocks like Shopify Inc. (TSX:SHOP)(NYSE:SHOP), Lightspeed, and BlackBerry (TSX:BB)(NYSE:BB) also rose sharply yesterday. While Shopify stock rose by about 5% in the last session, Lightspeed and BlackBerry posted more than 7% gains for the session. These three stocks saw a sharp correction in the previous few weeks amid profit booking in high flying technology stocks.
The demand for Shopify’s e-commerce platform grew sharply last year as the pandemic-related restrictions forced businesses to improve their online presence. In 2020, its gross merchandise volume surged by 96% — helping it more than double its net profit for the year. Similarly, Lightspeed’s cloud-based omnichannel commerce-enabling solutions grew at a fast pace amid the pandemic.
In the December quarter, its revenue rose by nearly 80%, and its sales growth is expected to rise further in the March quarter. That’s why Lightspeed stock rose by 149% last year while Shopify stock posted outstanding 178% gains. Some analysts expect their sales growth to normalize in the coming quarters with the pandemic subsiding.
An amazing Canadian EV stock to buy in 2021
While most tech companies’ shares rallied in 2020, the enterprise software firm BlackBerry’s shares didn’t see much appreciation. They ended the year with only a 1% rise. However, the stock started January with a bang as it more than doubled during the month before losing 28% in February. The Reddit trading mania episode increased the volatility in its stock in January. However, it’s not the only reason driving its stock higher this year. BlackBerry’s rising efforts to benefit from far surging EV and autonomous vehicle demand is one of the key factors that could keep its stock rally going in 2021 and beyond.
Autonomous vehicles, EVs, and smart mobility are some of the hottest emerging trends — expected to rule the market in the 2020s. BlackBerry has tied up with tech giants like Baidu and Amazon Web services to expand its automotive segment product offerings — especially to develop better technology for self-driving and electric cars.
Foolish takeaway
Currently, BB stock is trading with about 60% year-to-date gains. The company’s improving EV technology market offerings could help it exponentially increase its sales and expand its profitability in the coming years. A recent correction has given another opportunity to buy seemingly undervalued BB stock even cheaper.
If you missed last year’s big rally in tech and EV stocks like Shopify, Lightspeed, and Tesla, then you may want to add BlackBerry stock to your portfolio in 2021. It has the potential to yield extraordinarily high returns in the long term.
