The volatility in the stock market could keep you from investing. However, with the recent pullback in best tech stocks, investors shouldn’t miss the opportunity of investing in them.
Further, investors should leverage their TFSA (Tax-Free Savings Account) to invest in tech stocks. The reason is obvious, as your capital gains aren’t taxed in a TFSA, it significantly boosts the overall returns in the long term. So, instead of holding cash in your TFSA, invest $3,000 in these three under-$50 tech stocks.
Shopify
With its stock down over 80% from the peak, Shopify (TSX: SHOP)(NYSE:SHOP) is one of the best investments at current levels. Shopify is poised to gain significantly from the reacceleration in e-commerce demand. Moreover, its aggressive investments in e-commerce infrastructure position it well to capitalize on the secular tailwinds.
Shopify faces easier year-over-year comparisons in the coming quarters. Moreover, benefits from its investments in growth measures will likely boost its financials.
Shopify’s focus on strengthening the POS and fulfillment, expanding products in international markets, adding more features and merchant solutions, and partnerships with social media companies provide a solid platform for growth. Shopify stock is trading at multi-year-low valuations and is one of my top recovery picks in the tech sector.
Lightspeed
Lightspeed (TSX: LSPD)(NYSE: LSPD) stock is too cheap to ignore at current levels. While Lightspeed stock has lost substantial value, the momentum in its business has sustained. Strong organic sales and benefits from acquisitions are driving Lightspeed’s financials.
Lightspeed’s management is optimistic and expects the company to continue to deliver strong organic growth. The increased investments in technology from merchants and restaurateurs and focus on acquiring customers with solid underlying unit economics bode well for Lightspeed’s growth. Additionally, more customers adopting its multiple modules and land-and-expand strategy supports its average revenue per user.
Further, its geographic expansion, entry into new growth verticals, and new product launches are positive. Lightspeed could benefit from its focus on acquisitions that adds new customers, strengthens its competitive positioning, and accelerates product development.
Docebo
Docebo (TSX: DCBO)(NASDAQ: DCBO) is another top-quality company in the Canadian tech industry one could consider investing in. Like its peers, Docebo stock witnessed a substantial decline, despite its back-to-back strong financial performances.
Docebo continues to deliver strong organic sales growth. It benefits from its growing customer base and increased penetration of high-value customers with multi-year contracts. Also, its strong retention rate and expansion of average contract value are positive.
While Docebo’s fundamentals remain strong, its ability to drive incremental revenues from its customers with a limited cost supports margins.
Overall, Docebo’s strong enterprise customer base, strategic alliances, increasing deal size, and product expansion bode well for organic growth. Moreover, strategic acquisitions and focus on geographic expansion will likely accelerate its growth and drive the addressable market.
Bottom line
These technology stocks are trading cheap and look attractive on the valuation. Further, their solid fundamentals and multiple growth catalysts could lead to a sharp recovery in their stock prices. Thus, investing in these tech stocks through your TFSA could generate stellar tax-free capital gains in the long term.
