Shopify Inc (TSX:SHOP)(NYSE:SHOP) has been one of the top Canadian growth stocks for years. However, even after the company grew to become a multi-billion dollar business, that rapid growth has continued. The tech stock was one of the top performers in 2020, and while it’s slightly down to start 2021, it still offers a tonne of long-term growth potential.
One of the biggest reasons it performed so well in 2020 was due to a big tailwind from the pandemic. With shutdowns affecting retail more than almost any other sector, e-commerce stocks like Shopify saw massive growth.
This increase in sales not only meant that the company was growing, but also lifted its valuation metrics quite a bit. As the pandemic begins to wind down, Shopify has lost a bit of its premium. However, in my view, pandemic or not, the tech stock has a tonne of potential to continue growing both its revenue and its profitability.
So the fact that Shopify has lost a bit of its premium makes it a great opportunity to buy the stock for the long term.
Why is Shopify such a great long-term investment?
In a lot of ways, I see Shopify today, where Amazon was a few years ago. Not just because it’s also an e-commerce stock, but because Shopify still has a tonne of potential to grow and optimize its operations while finding attractive synergies.
Not to mention that the e-commerce industry is only just getting started. As the industry continues to gain more popularity, the economics of scale will only continue to improve.
The more people shopping online, the faster and cheaper it becomes for delivery. And the more competitive the industry becomes, the faster it can grow.
So it’s a major snowball effect that Shopify has a lot of control over. Not often do stocks have so much influence over the growth of their own industry.
What are other tech stocks worth a buy today?
Shopify is a great stock because there’s less risk to an investment, although it still has impressive growth potential.
However, if you want a higher risk, higher-reward tech stock to consider, AcuityAds Holdings Inc (TSX:AT) is a top choice today.
AcuityAds is an AdTech stock, a subsector of the tech industry with a tonne of potential to grow, especially as machine learning improves.
Advertisers are always trying to get the best bang for their buck and employ the most efficient marketing techniques possible.
So it makes sense, given the impressive technological capabilities we have these days with artificial intelligence, that there’s a tonne of interest and intrigue about the AdTech sector.
AcuityAds, being a high-risk, high-reward stock, has been highly volatile lately. However, if you invest for the long-term, that’s something you don’t need to worry about.
It’s still early days, but AcuityAds looks like stock with tremendous potential. Of the four analysts who cover the stock, all have it rated a buy. Plus, its average target price of $29.50 values the stock at a more than 100% increase from its price today.
So if you’re looking for a growth stock that has the potential to earn massive returns like Shopify, AcuityAds is one of the top stocks to consider today.
Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.
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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Daniel Da Costa owns shares of AcuityAds Holdings Inc. David Gardner owns shares of Amazon. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends AcuityAds Holdings Inc., Amazon, Shopify, and Shopify and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.