2 Tech Stocks With Growth Potential You Simply Don’t Want to Miss

The market is full of tech stocks with growth potential. Here are two options to consider buying now for your long-term portfolio.

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Tech stocks are intriguing investment options. They typically don’t offer a dividend, but rather rely on growth as a primary driver. But which tech stocks with growth potential should you consider?    

Here are two great tech stocks with growth potential right now that you will not want to miss out on.

Growth stock #1 – Shopify

Shopify (TSX:SHOP) is one of the most well-known stocks on the market. Up until last year, SHOP was one of the best-performing, if not the­ best-performing stock on the market.

To understand what happened, and why Shopify is still one of the tech stocks with growth potential, let’s talk about the company’s business model.

In short, Shopify is an e-commerce platform. Shopify’s platform allows merchants to quickly spin up an online storefront in a fraction of the time that more traditional platforms require. Shopify also has a growing assortment of add-ons to its platform that can bolt on additional functionality.

Examples of this include everything from fulfillment and inventory management to customer support and social media plug-ins.

When the pandemic started, Shopify was already riding a massive growth wave. The pandemic successfully pushed that needle even further out of necessity. Unfortunately, once stores started reopening, that wave subsided. Now, throw in the recent bout of rising interest rates and market volatility and that long-term growth potential declines further.

In fact, as of the time of writing, Shopify is still down over 35% over the trailing 12-month period.

Does this mean there’s an opportunity for investors? Absolutely.

In the most recent quarter, after posting better-than-expected results, Shopify referenced the market difficulties and looking forward to the rest of 2023.

Perhaps more importantly, Shopify announced it was hiking its subscription rates. In some cases, that increase (which is the first increase in a decade) is as much as 30%. Over the short term, that hike may be a drag on new business, but over the longer term that increase will address investor concerns on profitability.

Shopify isn’t going anywhere. The pandemic bump may have ended, but the longer-term potential of Shopify is still there.

Shopify is one of the tech stocks with growth potential to consider right now.

Growth Stock #2 – Constellation Software

Constellation Software (TSX:CSU) represents another one of the tech stocks with growth potential for investors. For those who are unaware of the stock, Constellation acquires and markets a variety of software solutions to businesses around the world. The company operates six different groups that blanket over 100 markets around the world.

The software that Constellation acquires and manages can range from agricultural and hospitality and utilities to healthcare, mining, and construction.

In short, Constellation offers an impressive, well-diversified portfolio. And like Shopify, Constellation has a colourful history as one of the market darlings.

In fact, Constellation’s stock has surged nearly 170% over the past five-year period. More recently, the stock is up a respectable 9.7% over the trailing 12-month period.

So then, what makes Constellation one of the great tech stocks with growth potential?

Apart from its diversified business, Constellation offers some defensive appeal. Many of the businesses that utilize Constellation’s software are mature, established businesses in stable sectors of the market. Additionally, the stock does offer investors a dividend, which is rare for this segment.

The yield is a paltry 0.23%, but it is something, and the dividend can be reinvested to further fuel long-term growth.

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.

Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

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