2 Embattled Canadian Tech Stocks With Parabolic Upside Potential

Investors seeking growth over the long term may want to consider these two embattled tech stocks that may still have upside left.

Investors looking for growth have gravitated toward tech stocks for good reason. Canadian technology companies have absolutely taken off during this recent bull market. Indeed, the number of high-quality Canadian technology companies continues to grow. In this light, it can be hard to pick one or two winners.

Here are two top tech stocks with the potential to continue their rapid growth.

Top tech stocks: Lightspeed

Lightspeed (TSX:LSPD)(NYSE:LSPD) is a tricky pick, as far as growth stocks go. That’s because this company’s growth trajectory has recently been called into question by short-sellers.

Spruce Point Capital Management recently called out Lightspeed’s business model and the company’s accounting of its revenue growth. A U.S. short-seller, this firm sees discrepancies with how Lightspeed has been recording its lightning-fast growth rate.

Indeed, given how quickly Lightspeed stock has surged, some skepticism is a good thing. This is a company that has done well to revolutionize the omnichannel software and hardware space for SMBs. Additionally, this is a company that has grown quickly, in part, due to a number of aggressive acquisitions.

How the company reports its revenue may indeed be questioned by investors. However, it’s clear this company is operating in a high-growth sector with plenty of upside.

Similar to when Shopify was hit with short-seller allegations, Lightspeed’s future depends on how the company responds. More growth is likely to breed more investor interest.

This recent dip therefore may be viewed as an intriguing entry point for those who feel they missed the boat. Others concerned with Lightspeed’s business model may feel more comfortable on the sidelines. In my view, either viewpoint is valid, and investors ought to look at Lightspeed stock through the lens of their risk tolerance level right now.

BlackBerry 

Another company that has been on the short end of short-sellers of late is BlackBerry (TSX:BB)(NYSE:BB).

The former smartphone maker turned software company has been on a downward trajectory for more than a decade. Despite making the transition to a pure-play software company, BlackBerry has struggled to make a profit in recent years.

As a mature tech stock, investors seem to be demanding bottom-line results. And BlackBerry hasn’t been delivering. Accordingly, various short-sellers have jumped on this stock as an execution-based short.

That said, because of BlackBerry’s short interest, this stock went on an incredible run this year. While BlackBerry stock has fallen back to Earth, this increase is notable for two reasons.

First, the BlackBerry brand isn’t lost with retail investors. This is a company that still holds cachet among many young investors who like the brand.

Second, BlackBerry’s new business model and future growth prospects may not be as dim as short-sellers would like us to believe. This is a company that’s seeing impressive growth in the autonomous and EV software market. Those bullish on the growth of this space may like BlackBerry stock as a picks-and-shovels play on this sector.

Fool contributor Chris MacDonald has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Lightspeed POS Inc. and Shopify. The Motley Fool recommends BlackBerry and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

More on Tech Stocks

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Stocks for Beginners

This Stellar Canadian Stock Is Up 497% This Past Year and There’s More Growth Ahead

This under-the-radar Canadian stock has surged nearly 500% in 12 months – and its growth story may just be getting…

Read more »

Illustration of data, cloud computing and microchips
Tech Stocks

Opinion: This Is the Only TSX Growth Stock to Own for the Next 3 Years

Alithya Group is quietly building one of Canada's most compelling IT growth stories. Here's why this TSX tech stock deserves…

Read more »

semiconductor manufacturing
Tech Stocks

Want Global Growth Without U.S. Stocks? Start With These 2 Names

If you want global growth without adding more U.S. exposure, ASML and SAP offer two very different but powerful ways…

Read more »

crisis concept, falling stairs
Tech Stocks

Market Crash: 2 Stocks I’d Buy Without Hesitation

Markets in North America are declining. Here's are two high-end stocks that you can use to turn declines in profits…

Read more »

The RRSP (Canadian Registered Retirement Savings Plan) is a smart way to save and invest for the future
Tech Stocks

Your RRSP Balance Doesn’t Matter as Much as These 3 Things in Retirement

Discover the truth about RRSP balances and their impact on retirement income. Learn when RRSP savings truly matter.

Read more »

AI concept person in profile
Dividend Stocks

1 Magnificent Canadian Tech Stock Down 35% to Buy and Hold for Decades

Enghouse is a profitable Canadian software company that looks cheaper now, even as it keeps generating cash.

Read more »

some REITs give investors exposure to commercial real estate
Tech Stocks

1 Perfect Canadian Stock Down 17% to Buy and Hold Right Away

This TSX compounder is down from its highs, but the business is still growing and buying more growth.

Read more »

workers walk through an office building
Dividend Stocks

Here’s the Average TFSA and RRSP at Age 45

Learn why a TFSA is crucial for Canadians planning for retirement. Find out how it compares to an RRSP for…

Read more »