2 Cheap Tech Stocks to Buy Right Now

These two tech stocks might have a big year ahead of them in 2024 and are too attractively priced to ignore right now.

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Canadian tech stocks fell out of favour with investors in the last couple of years, but the situation looks like it is changing now. With inflation cooling down, central banks in the U.S. and Canada have stopped the series of aggressive interest rate hikes.

With rate cuts expected to be introduced later in the year, economic activity will likely pick up again. With that in mind, investors might feel more comfortable investing in growth stocks. To that end, tech stocks will certainly be in the limelight for Canadian investors.

With many tech stocks still trading at significant discounts, let’s take a look at two tech stocks that can deliver outsized gains in 2024 and beyond, especially if you are looking for long-term holdings.

OpenText

OpenText (TSX:OTEX) is a more under-the-radar tech stock that has been around for a while. It is a Waterloo-based $15.13 billion market capitalization tech company that develops and sells enterprise information management software. It became the fourth-largest Canadian tech company in 2022. The company’s clients include public and private entities of all sizes, diversified worldwide.

OpenText stands to benefit greatly from the growing trend of artificial intelligence (AI) integration. Between its fiscal  2018 and 2023, the company saw sales increase by 59.3%.

Despite facing headwinds due to the pandemic, it has managed to improve its adjusted earnings by 28.5% in the last five years. With AI-integrated solutions improving its offerings, the tech company might be looking at a much brighter future. As of this writing, it trades for $55.72 per share.

Lightspeed Commerce

Lightspeed Commerce (TSX:LSPD) is one of the more well-known tech stocks that debuted on the TSX in 2019. The $3.89 billion market capitalization tech company offers a cloud-based e-commerce platform to merchants of all sizes.

It has a presence in over 100 countries worldwide, benefitting greatly from the rise of the e-commerce space. Lightspeed Commerce stock saw its share prices decline due to a selloff triggered by a short-seller report. A broader selloff in the tech sector shortly after made matters worse.

As a business, Lightspeed has been solid. Despite challenging macro conditions, Lightspeed is dead-set on improving its bottom line. In the fiscal second quarter of 2024, Lightspeed stock increased its revenue by 25% year over year. Its transaction-based revenue grew by 36% from the same period last year.

Since fiscal 2024 began, it has been selling its point-of-sale (POS) and payment solutions as a unified offering. The move can drive higher customer spending and retention, spelling good news for the stock and investors. As of this writing, Lightspeed stock trades for $25.46 per share and is too attractively priced to ignore.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Lightspeed Commerce Inc. made the list!

Foolish takeaway

Investing in technology stocks can be an excellent strategy. That said, you must remember that investing in growth stocks entails risk. If you decide to invest, carefully consider your risk tolerance and allocate your capital to these tech stocks accordingly.

Considering the fundamentals and growth prospects for OpenText stock and Lightspeed Commerce stock, these two can be good long-term holdings in your self-directed investment portfolio.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

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