The Canadian stock market continues to deliver to investors. The S&P/TSX Composite Index is nearing a 20% return on the year.
As a long-term investor myself, I will admit that the stock market’s recent performance has me more focused on building my cash reserve than buying individual stocks today. The market has been on fire since August, with stocks across the TSX skyrocketing to new all-time highs. Valuations are getting pricey for many Canadian stocks.
With the market as hot as it is right now, it’s a great time to update your watch list. In addition, even though the market as a whole is trading at all-time highs, there are plenty of growth stocks, particularly in the tech sector, that continue to trade below all-time highs from 2021.
I’ve put together a basket of three top-quality tech stocks. Investors who are looking to add some serious long-term growth potential to their portfolios should have these three companies on their radar.
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Growth stock #1: Shopify
Most Canadian investors are likely familiar with the tech giant Shopify (TSX: SHOP). It wasn’t long ago that the company was the largest on the TSX. However, with shares down close to 25% from all-time highs that were set back in 2021, Shopify has since given up the top spot on the TSX.
The company reported its third-quarter 2024 earnings earlier this week, which were extremely well received by the market. The stock soared more than 20% on the day of the release.
If you’re hoping to pick up shares of Shopify at a discount, I’d suggest acting quickly.
Growth stock #2: Lightspeed Commerce
The beaten-down tech stock could be of interest to both short- and long-term investors.
Lightspeed Commerce (TSX: LSPD) is fresh off a quarterly report which impressed investors. The stock surged after management reported a 20% growth in quarterly revenue and a surprise 30% growth in earnings.
In the long term, Lightspeed remains well-positioned to see revenue growth continue in the double-digit range. That’s why I believe, as a current shareholder myself, that it’s only a matter of time before the tech stock returns to its market-beating ways.
A potential sale is what could be of interest to short-term investors. The company stated not long ago that it is currently exploring options for a potential sale, which likely would lead to a pop in stock price.
Growth stock #3: Descartes Systems
The last pick in this basket is the only one that is currently trading at all-time highs. Shares of Descartes Systems (TSX: DSG) are up about 50% on the year and 200% over the past five years, easily outpacing the returns of the Canadian stock market.
Investors who are interested in buying shares of Descartes Systems today will need to pay up. It’s no surprise that the tech stock is priced at a premium today. If you’re looking for a dependable market-beater, though, you should be prepared to pay up for it.
Not many stocks on the TSX can match Descartes Systems’s market-beating track record over the past decade.
