Psst ... 2 Tech Stocks I'd Buy Before Shopify

Psst … 2 Tech Stocks I’d Buy Before Shopify

Shopify (TSX:SHOP) stock is great — don’t get me wrong. But these two tech stocks are great too, with more historical growth behind them.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published June 2, 2023 12:15 pm EDT

Shopify (TSX: SHOP) continues to be one of the top-performing stocks on the TSX today. Shares are up 55% in the last year and about 60% year to date as of writing. So, Shopify stock shouldn’t necessarily be off your radar.

However, it’s not the huge buying opportunity it was before earnings. After the company announced layoffs coupled with the selling of its logistics business, shares jumped 30% in a day. Since then, shares of Shopify stock have come back down to earth, down 8% since that time.

That’s why today I’d like to go into two other tech stocks besides Shopify stock to consider. Both have long-term growth behind them and solid future outlooks as well.

A data center engineer works on a laptop at a server farm. — Source: Getty Images

CGI stock

CGI (TSX: GIB.A) is a solid choice for those looking for stable tech stocks. Yes, stable tech stocks do exist! And this is a perfect example. CGI stock has been a software acquisition company for decades now, upgrading software and then selling the platforms to the highest bidders.

CGI stock hasn’t let the recent downturn slow it down either. There is plenty of room to grow in this market, and the company has proven to have a strong management team that can identify undervalued software companies.

And the partnerships are massive, including names as large as Microsoft. Yet the stock is certainly not that expensive, trading at just 22 times earnings. Is it valuable? Not necessarily, but it’s still a good price — especially considering share growth.

Shares of CGI stock are up 30% in the last year and 19% year to date. Yet over the last decade, shares are up 341%! That’s a compound annual growth rate (CAGR) of 16% as of writing. So, with a solid outlook and plenty of historical growth, I would certainly consider this to be one of the best tech stocks to put on your roster.

Open Text

Another of the great tech stocks to consider on the TSX today is Open Text (TSX: OTEX). It’s a solid company that’s been around for decades. It focuses on cloud data storage and cybersecurity.

The company has grown with such success that it now creates major partnerships as well. This includes Microsoft as well as other companies, like Alphabet. It’s also similar in how Open Text stock has decades of growth behind it and even more ahead.

This can be seen from its earnings reports, showing just how strong it can be even during downturns. Total revenue was up 41% year over year to $1.24 billion, with annual recurring revenue up 37.7% to $1.01 billion.

Shares are up 8% in the last year after a drop last summer, but up 36% year to date as of writing during this recovery period. Shares are again not exactly cheap trading at 36.97 times earnings, but it also offers a 2.37% dividend yield as of writing to consider. That’s along with share growth of 207% in the last decade — a CAGR of 12%.

Bottom line

So, yes, Shopify stock is growing, and it’s great. It could very well be a stock similar to CGI stock and Open Text stock, with shares climbing steadily over the next decade. But these two tech stocks are already strong, stable, and growing, with plenty of historical and future growth to look at.