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.
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.