Missed Out on NVIDIA? My Best Growth Stock Pick to Buy and Hold

Despite its consistently improving fundamental outlook, this Canadian growth stock has seemingly been ignored by most investors for a long time.

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NVIDIA (NASDAQ:NVDA) has been on a tear over the last year. After a tech sector-wide selloff in 2022 drove the NVDA stock down by over 50%, it cheered investors by yielding an eye-popping 239% positive return in 2023. Besides the recent tech sector-wide recovery, the company’s solid financial growth trends and spectacular growth prospects amid the growing popularity of artificial intelligence (AI) technology have supported NVIDIA’s strong gains. The ongoing AI boom is also the reason why NVDA stock has extended its rally by another 76.5% so far in 2024, beating the NASDAQ Composite benchmark by a wide margin, which has gone up by only 5.7% year to date.

However, the U.S. chipmaker’s stock seems pricey at its current value as it has a hard task to keep up the pace of its sales growth in the years to come, making NVDA stock a little risky for investors with low to moderate risk tolerance. Therefore, investors who missed NVIDIA’s rally may want to look for cheaper and less crowded growth stocks in the tech sector. One such stock is BlackBerry (TSX:BB), which is not only involved in the ongoing AI and machine learning revolution but also has a strong presence in the fast-growing cybersecurity and futuristic mobility technology segments.

Let me quickly give you some key reasons why BB stock is my best growth pick in Canada to buy and hold right now.

What makes this Canadian growth stock so attractive?

BlackBerry currently operates two main business segments: cybersecurity and IoT (Internet of Things). Last year, this growth stock revealed its plans to split these two businesses to enhance its operational flexibility and focus on their respective fields, but nothing has been finalized so far.

Under its cybersecurity segment, the company focuses on providing reliable enterprise cybersecurity solutions to public and private organizations worldwide, including its innovative AI tech and machine learning-powered predictive AI defence solutions. While BlackBerry currently generates most of its revenue from its cybersecurity segment, its increasing focus on developing advanced technological solutions for businesses makes the long-term growth outlook for its IoT segment even brighter.

After several years of hard work, BlackBerry has developed an advanced intelligent vehicle data platform called IVY in partnership with Amazon Web Services. The company claims that its IVY platform would allow automakers to receive in-vehicle sensor data in real time and utilize it to provide better functionalities and features to their customers. The demand for such advanced vehicle data platforms is likely to surge in the years to come with higher deployment of electric and self-driving vehicles, which could help BlackBerry’s financial growth trends to improve significantly.

Besides improving long-term fundamentals, BlackBerry has pleasantly surprised Street analysts and investors by reporting adjusted net profits for the last two consecutive quarters. But despite all these positive factors, BB stock has seemingly been ignored by most investors as it has lost nearly 65% of its value in the last three years. As a result, this Canadian growth stock currently trades at $3.78 per share with a market cap of $2.2 billion, making it look way too undervalued at these levels based on its long-term growth outlook.

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.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool recommends Amazon and Nvidia. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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