Missed Out on Nvidia? My Best Tech Stock to Buy and Hold

Are you looking for tech stocks to buy and hold in your portfolio? Here’s my top pick!

| More on:
stock analysis

Image source: Getty Images

Nvidia (NASDAQ:NVDA) stock has been on fire lately. In 2024 alone, this stock has gained about 86%. Looking back at the past year, we can see that Nvidia stock has soared 220%. While I think Nvidia stock could continue to rise due to the potential growth of the artificial intelligence industry, many investors would rather look elsewhere for growth. That’s because they think Nvidia stock has grown far too fast, leaving very little future growth on the table.

If you find yourself thinking that too, fear not. There are many great stocks that could be worth holding in your portfolio. In this article, I’ll discuss my top Canadian tech stock that investors should consider buying and holding for years.

Which stock should you buy today?

My top tech stock to buy today would be Constellation Software (TSX:CSU). This is one of the best stocks you’ve likely never heard of. Constellation Software acquires vertical market software (VMS) businesses. Upon acquisition, it provides those businesses with the resources necessary to turn them into exceptional business units. Since its founding, Constellation Software has managed to perfect its acquisition strategy. This success has been reflected in its stock price.

Since its initial public offering, Constellation Software stock has gained nearly 19,700%. That means a $10,000 investment would be worth more than $1 million today. There are very few stocks in Canada that can boast that kind of success.

What makes Constellation Software so attractive?

As mentioned previously, the secret to Constellation Software’s success is its acquisition strategy. Competitors realized that as well and have previously tried to copy Constellation Software’s approach to acquiring businesses. That’s why, due to competitive reasons, Constellation Software began limiting the details they release regarding each acquisition.

To put it simply though, Constellation Software has a strict criteria that they follow when considering businesses to acquire. Generally, they require that a business have an outstanding management team, consistent profitability, and above-average growth. For much of its history, Constellation Software has focused on small- and medium-sized VMS businesses.

However, in 2021, the company announced that they were having trouble finding great deals in small- and medium-sized VMS businesses. As a result, they decided to flesh out a new division that will specialize in large VMS business acquisition. That has cumulated in the spin-off of a couple of Constellation Software’s divisions in order to fund those new large VMS acquisitions.

Over the past year, this stock has gained nearly 44%, suggesting that the company’s new direction is paying off.

In addition to its excellent business performance, Constellation Software continues to be led by its founder, Mark Leonard. It’s previously been shown that founder-led companies tend to outperform peers led by non-founders. Because of that, as long as Leonard continues to lead Constellation Software, I believe this stock is one you could buy and hold without having to worry about it on a month-to-month basis.

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 Jed Lloren has positions in Constellation Software. The Motley Fool recommends Constellation Software and Nvidia. The Motley Fool has a disclosure policy.

More on Tech Stocks

Dice engraved with the words buy and sell
Tech Stocks

Is Tesla Stock a Buy, Hold, or Sell?

There have been a lot of headlines about Tesla (NASDAQ:TSLA) stock, not all of them good. Here is what to…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

1 Stock That’s Just as Hot as NVIDIA (Without All the Hype)

NVIDIA (NASDAQ:NVDA) stock is still one to watch, but I would consider instead this other top stock that's been just…

Read more »

Shopping and e-commerce
Tech Stocks

Forget NVIDIA: This Canadian AI Stock Has Even More Upside

AI is more than just a new hype/trend in the tech sector. It’s a fundamentally transformative force and may help…

Read more »

Gold bullion on a chart
Tech Stocks

2 Canadian Mineral Stocks That Are Glittering (but Aren’t All Gold)

Gold stocks are climbing as the price rises higher and higher, and these are already reaping the rewards.

Read more »

Overhead shot of young adults using technology at a table
Tech Stocks

Tech Treasures: 2 Undervalued Software Stocks to Watch in 2024

Two undervalued software stocks and tech treasures are good buys in 2024 for their business innovations and long growth runways.

Read more »

Businessman looking at a red arrow crashing through the floor
Tech Stocks

I Wouldn’t Touch This TSX Stock With a 10-Foot Pole

I wouldn't touch Lightspeed Commerce (TSX:LSPD) stock with a 10-foot pole.

Read more »

A depiction of the cryptocurrency Bitcoin
Tech Stocks

Why Everyone Is Talking About Bitcoin Again

Bitcoin (CRYPTO:BTC) continues to surge in price but has been a bit shaky in the last month. So, what should…

Read more »

edit Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Tech Stocks

2 Canadian Bank Stocks Betting Big on AI Technology

Royal Bank of Canada (TSX:RY) and TD Bank (TSX:TD) are betting big on AI technology for the new age.

Read more »