TSX Information Technology in March 2024: The Best Stocks to Buy Right Now

Two TSX stocks with massive growth potential are the best stocks to buy in the information technology industry right now.

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Canadian tech stocks are a massive mix of companies whose products and services are based on information technology. The tech industry is a rapidly growing market sector that branches into several subsectors. Companies are constantly looking for new ways to integrate tech-based innovations to provide solutions to longstanding consumer problems.

Oriented toward the future, tech stocks are constantly improving. Naturally, tech stocks provide opportunities for significant growth. Tech stocks became massively popular, becoming the major driver of growth for the broader Canadian equity security market until a harsh macro environment caused a massive pullback a few years ago.

As of this writing, the S&P/TSX Composite Index is up by 85.37% from its pandemic-induced March 2020 low. Year to date, the Canadian benchmark index is up by 5.28%, attaining a new all-time high. With the broader stock market doing well, it can be a good time to consider investing in growth stocks, particularly those from the tech sector.

Today, we will look at two TSX information technology stocks that are still lagging behind the broader market and can be excellent holdings to capture growth.

OpenText

OpenText (TSX:OTEX) is a $14.35 billion market capitalization Canadian company developing and selling enterprise information management software. Headquartered in Waterloo, it enables clients to archive, aggregate, retrieve, and search unstructured information through its software. Its software services and solutions serve government entities, businesses of all sizes, and consumers.

OpenText stock is also a rarity in the tech sector as a dividend-paying stock. As of this writing, the stock trades for $52.75 per share, paying its investors at a 2.57% dividend yield. While the tech sector is typically risky, the core business model of OpenText makes it a relatively safer tech stock.

After delivering a 70% year-over-year revenue growth in its latest quarter, it appears financially sound. Businesses constantly need software to operate, ensuring that this company’s products and services will remain in high demand. It can be a good holding to consider at current levels.

BlackBerry

BlackBerry (TSX:BB) is a $2.47 billion market capitalization company headquartered in Waterloo that is best known for the phones it used to make back in the day.

Since it no longer competes in that market, BlackBerry has gone from being a household name to a long-forgotten phone manufacturer for many. However, the company has only stepped out of the limelight while remaining a major player in the tech space.

The firm is a software company that specializes in cybersecurity, providing software and services while holding several critical software application patents.

The tech stock boasts significant long-term growth potential in fast-growing areas like cybersecurity and the Internet of Things (IoT). It already has a solid presence in the enterprise cybersecurity space. Now, it is developing advanced Machine Learning and artificial intelligence-based solutions for the automotive industry.

As of this writing, BlackBerry stock trades for $4.19 per share. As demand for the technological solutions it provides continues to soar in the coming years, you can expect this stock to deliver substantial long-term wealth growth.

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

Foolish takeaway

With growing expectations of rate cuts, the TSX might continue trading higher in the near term. That said, it is difficult to predict how long the bullish sentiment will last. The global economy is still facing several challenges, from geopolitical issues to inflationary pressures. It means that investing in growth stocks still entails a degree of capital risk.

Suppose you have a well-balanced portfolio and a higher risk tolerance. In that case, you can afford to take a bit of risk by investing in growth stocks to inject some growth into your self-directed portfolio. OpenText stock and BlackBerry stock can be good holdings for this purpose, especially considering that the stocks are trailing the broader market right now.

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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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