In recent years, investing in tech stocks has become increasingly popular as the technology sector has outperformed the overall market. This is because this sector is rapidly growing and shows enormous potential for wealth accumulation to Canadian investors.
Here are three top tech stocks you can add to your investment portfolio for those looking to earn greater returns in 2024.
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OpenText
OpenText (TSX:OTEX) is a Canadian tech giant that allows clients to aggregate, archive, retrieve and search unstructured information through its software. It offers platform and developer extensions, process suites, B2B integration, content and records management to its worldwide customers.
On February 1, the company announced its financial results for the second quarter of 2023, reporting a record-breaking total revenue of $1.535 billion, witnessing a whopping 71% increase year over year. In addition, its services cater to a wide range of clients, like government agencies and large enterprises, emphasizing the significance of scalable and secure solutions in today’s digital world.
For those looking for a long-term growth stock worth considering at a relative discount, this is a name I’ve got on my radar right now. I think it is worth diving into.
Constellation Software
Constellation Software (TSX:CSU) develops and customizes software for public sector and private sector markets in Canada. The company has grown incredibly over time, utilizing a growth-by-acquisition strategy. Specifically, Constellation focuses on acquiring, managing and building vertical-specific software businesses. The company operates in markets like communications, credit unions, beverage distribution, tour operators, and more.
Canadian investors seeking wealth accumulation can invest in this tech company, as Constellation Software has outperformed the market with a 20% rise in 2023. During the last quarter, the company increased its total revenue to $1.85 billion by 34%. It has also shown significant growth in this share price by 284% in the previous five years, making it an ideal investment option for those with a long-term investing time horizon.
Shopify
Shopify (TSX:SHOP) is one of the leading e-commerce platforms in the world. The Canadian-based company offers services to small and medium-scale businesses to enhance their online presence. Shopify operates under two segments: merchant solutions and subscription solutions for its clients.
In 2023’s second quarter, the company reported $1.7 billion in revenue, a significant 31% increase from last year’s revenue. Shopify Inc. controls more than 30% share in the e-commerce industry, outperforming competitors like Amazon. Moreover, Shopify’s share price has been on a roll over the past year, more than doubling. This has made the stock attractive for momentum investors and long-term holders alike.
Bottom line
Overall, each of these three top Canadian tech stocks is certainly worth a look for investors who think this rally can continue. Of course, headwinds could play out, and these companies aren’t without risk. These are, after all, expensive high-growth names in their respective sectors.
That said, over the long term, I think plenty of capital-appreciation upside is likely for investors who buy into these names over time.
