Tech stocks had a rough week. Especially the Magnificent Seven, which were a bit less than magnificent when it came to share performance. Even though most reported great results! Investors, however, weren’t as impressed with how tech stocks were using artificial intelligence (AI), and how costs continued to weigh on profits.
But even the Magnificent Seven didn’t perform all that great. There is another tech stock I would consider for some strong cash, even now. And that’s CGI (TSX:GIB.A).
Earnings up
CGI reported earnings this week that beat out earnings estimates for yet another consecutive quarter. The business and technology consulting company reported first-quarter profit and revenue that was up compared to the year before.
The tech stock earned $389.8 million for the quarter, up from $382.4 million the year before. This came to $1.67 per diluted share, up from $1.60 in 2023. CGI also brought in revenue totalling $3.6 billion, another increase from $3.5 billion year over year.
The thing is, CGI stated that its profit excluding specific items actually came to $1.83 per diluted share, which was up from $1.66 the year before. So there was overall a lot of growth by the company in the last year.
More on the way
CGI will likely have even more growth on the way for shareholders. The global IT services firm continues to make strong partnerships, including with more and more governmental agencies. And even while other tech stocks have suffered under these macroeconomic headwinds, CGI stock has seen revenue climb higher and higher.
This really comes down to the company’s long-term contracts that it holds with many clients. These have kept the tech stock quite stable, and will continue to do so in the future. Especially as it holds so many government contracts as well, more than its peers.
Meanwhile, the company continues to use these funds for even larger purposes, usually through acquiring smaller IT firms. This has given it even more access to global markets.
Still a steal
While tech stocks continue to struggle to stay afloat, CGI stock looks to be another story. Shares are up 26% in the last year, as of writing, and we really haven’t seen the dips that we’ve seen with other tech stocks, including the Magnificent Seven.
Meanwhile, shares still offer value. CGI stock trades at 2.5 times sales as of writing, with just 45% of its equity needed to cover all debts. It therefore is in a strong position share wise, while also having plenty of cash on hand for even more acquisitions.
All that said, CGI stock looks to be a great buy on the TSX today. The company continues to trade at or near 52-week highs, but still offers room to grow. Especially when the market and economy fully recovers. So now is the time to buy before this tech stock really takes off. Especially as investors start looking for new opportunities for long-term growth on the TSX today. In that case, CGI stock could be the one you tell friends about buying.
