3 TSX Tech Stocks That Could Challenge Silicon Valley

Silicon Valley isn’t the only place with high-growth companies. The TSX boasts of tech firms that could deliver superior returns. You can choose from among Docebo stock, Absolute Software stock, and Nuvei stock.

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Silicon Valley in the U.S. is the birthplace of tech giants such as Alphabet, Apple, and Facebook. Property values in the San Francisco Bay area have risen sky high because the region is the hub of technological innovations. TSX’s technology sector is small compared to the tech-heavy NASDAQ Composite Index.

Canada-based tech firms also cross-list on the NASDAQ to increase visibility, gain prestige, and attract American investors. Meanwhile, three growth-oriented companies are well positioned to challenge tech firms in Silicon Valley. They are the emerging tech superstars on this side of North America.

LMS industry

Docebo (TSX:DCBO)(NASDAQ:DCBO) operates in one of the most promising industries in the post-pandemic. The $3.62 billion company from Toronto desires to be the leader in innovative learning technologies. It went public in 2019 in Canada then listed on the NASDAQ in 2020.

In 1.95 years, Docebo has rewarded investors with a 591.88% total return (170.30% CAGR). The current share price is $110.70, while the trailing one-year price return is 149.89%. There’s no doubt this tech stock will grow in prominence as the world transitions to a technology-driven world.

The global learning management system (LMS) market is forecasted to grow at a CAGR of 24.11% from 2020 to 2029. Docebo, along with IBM and Oracle, are the top names in North America. The company provides a cloud-based LMS to train workforces of clients in North America, Europe, and the Asia-Pacific region.

Critical cybersecurity

Absolute Software (TSX:ABST)(NASDAQ:ABST) is getting a lot of investor attention, because the cybersecurity market can potentially grow to US$345.4 billion by 2026. The $741.7 million company from Vancouver helps governments and organizations contain security breaches.

From solving laptop theft and loss, Absolute has grown to be the trusted name in cybersecurity. About 28 global manufacturers install or embed Absolute Persistence in their devices. According to its president and CEO Christy Wyatt, the demand for modern, zero-trust security approaches is ever increasing.

Wyatt added that multi-device, hybrid environments are now the rule rather than the exception. Absolute Software is confident it could deliver a differentiated solution in a high-growth market. The tech stock trades at $14.98 and pays a 2.14% dividend, which is rare for a growth-oriented company.

Payment technology

Nuvei’s (TSX:NVEI) shares have risen 272.2% since going public on September 18, 2020. The current share price is $171.78. Had you invested $25,000 a year ago, you’d be richer by $68,055.25 today.

As a global payment technology company, this $23.89 billion Montreal-based company helps businesses remove payment barriers. Currently, its proprietary platform provides seamless pay-in and pay-out capabilities and is available in 204 markets globally.

The financial results in the first half of 2021 were mighty impressive. Total revenue increased 97% to $328.7 million compared to the same period in 2020. Furthermore, net income was $66.7 million versus the $48.4 million net loss a year ago. For Q2 2021, total volume, revenue, and adjusted EBITDA grew 146%, 114%, and 112% over Q2 2020, respectively.

According to Philip Fayer, Nuvei’s chairman and CEO, the company will continue to advance its strategic initiatives, expand global connectivity, and pursue market opportunities. Management forecasts +30% CAGR growth in revenue and total volume in the medium term. Likewise, the adjusted EBITDA margin should grow by 50% in the long term.

Invest in your home turf

Canadians should look at the home turf instead of Silicon Valley. Either one of three TSX tech stocks has massive growth potential.

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.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Docebo Inc., and Facebook. The Motley Fool recommends Absolute Software Corporation and Nuvei Corporation and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.

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