After posting outstanding 21.7% positive returns in 2021, the TSX Composite Index has advanced by 1.5% in 2022. Despite the broader market optimism, most tech stocks have seen a sharp correction this year so far. Apart from some company-specific factors, concerns about a tighter monetary policy amid surging inflation have hurt tech investors’ sentiments.
Nonetheless, the recent tech meltdown has made many fundamentally strong stocks look very cheap. That’s why it could be the right time for long-term investors to add these seemingly cheap stocks to their portfolios right now before they start rallying again. Let’s take a closer look at two such cheap tech stocks to buy on the TSX today and hold for the long term.
Hut 8 Mining stock
Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) stock could be one of the most attractive cheap stocks to buy in Canada now — especially if you are looking for an opportunity in the cryptocurrency market. The shares of this Canadian cryptocurrency mining company have dived by 24.3% in January due to a sharp selloff in the value of cryptocurrencies like Bitcoin and Ethereum.
However, the recent drop in its stock doesn’t reflect weak fundamentals, as Hut 8 remains on the path of consistent business growth. In January, the company mined 308 Bitcoins with an average production rate of 9.93 Bitcoins per day. It added all these digital assets in its reserve, taking its total Bitcoin balance to 5,826 at the end of the month.
In addition, Hut 8 Mining is striving to increase its hashrate and overall efficiency by deploying additional miners. This move could help it post stronger operational growth in the coming quarters with better margins. As the outlook for major cryptocurrencies like Bitcoin and Ethereum is also getting brighter, this cheap stock in Canada could help you get outstanding returns in the long run.
Shopify (TSX:SHOP)(NYSE:SHOP) has been one of the worst affected stocks on the TSX this year. Despite falling by more than 10% in December 2021, SHOP stock managed to end the fourth quarter with a minor 1.3% gain. However, the stock has tanked by 37.5% in 2022 amid the ongoing selloff in tech stocks.
The recent growth trend in Shopify’s financials looks impressive as the company reported 85.6% revenue growth in 2020. The global pandemic accelerated the shift towards e-commerce, resulting in a sudden jump in Shopify’s sales growth rate. The Canadian e-commerce company will release its Q4 2021 results later this week. Street analysts expect its fourth-quarter revenue-growth rate to be around 36%. At first, this sales growth rate estimate looks very low if we look at Shopify’s recent massive sales growth. But it shouldn’t come as a surprise to investors as the company was expecting this decline in the post-pandemic era.
Moreover, I expect the company to beat analysts’ financial growth expectations in the coming quarters, as it might continue to benefit from consistently strong demand for e-commerce services amid prolonged pandemic-related woes. These factors make SHOP stock look really cheap for the long-term investors at the moment, as its long-term growth outlook remains solid.