Top Canadian Tech Stock Hitting All-Time Highs Now!

2021 is turning into a strong year for Canadian technology stocks. Here are some top tech stocks hitting all-time highs right now!

| More on:

July has been a great month for Canadian technology stocks. The S&P/TSX Capped Information Technology Index is up over 19% year to date. That is actually beating the overall TSX Index by nearly three percentage points. While many have talked about the return to value stocks in 2021, TSX technology stocks continue to be a great place to invest your money.

Canadian technology stocks have proved their resilience

As we enter the dog days of summer, it appears the stock market is recognizing the resilience of Canadian tech stocks. Both in and out of the pandemic, Canadian technology businesses are finding ways to succeed. Frankly, many of these stocks will be supported by the general shift to a more digitized and technologically streamlined world.

A number of Canada’s top technology stocks are hitting all-time highs. Certainly, they are not cheap, and I would perhaps wait for some sort of pullback to start a new position. Yet, given their strong market position and positive long-term thesis, I would definitely keep them on my radar. Here are two top Canadian tech stocks that are hitting all-time highs this week.

A digital commerce leader

Lightspeed POS (TSX:LSPD)(NYSE:LSPD) has quickly become one of the most exciting Canadian tech stocks. It started out as a point-of-sales provider for small- to medium-sized retail and hospitality merchants. Yet it has quickly been rising as an advanced omni-channel commerce platform. In fact, the company plans to change its name to Lightspeed Commerce to represent this shift.

Since May, it has announced a number of exciting acquisitions that will vastly expand its platform’s capabilities. Its stock has risen almost 50%, and today it is trading just below all-time highs. Yet this business still has lots of upside.

There are hundreds of thousands of merchants that still use legacy point-of-sales systems. Given its global scale, Lightspeed has a large addressable market to penetrate. Likewise, its expanded solution offerings help it compete with the likes of Twilio, Shopify, and Square.

This Canadian stock is very expensive. However, given its great execution and large addressable market, it is a great business to buy and own for the long term.

A Canadian tech stock for the decades

I would be careless to talk about top Canadian tech stocks and not mention Constellation Software (TSX:CSU). At least in terms of a long-term return perspective, this stock is legendary. Over the past 10 years, Constellation investors have enjoyed a gain of 2,520%. That isn’t including dividends or its recently spun-out Topicus.com shares either. The stock just hit a new all-time high.

This Canadian stock is a master at compounding investor returns. It acquires vertical market software businesses across the world. It then applies best practices, managerial expertise, and capital. Eventually, it turns them into leaders in their niche software market. As these software businesses mature, they yield tons of free cash flow. Constellation harvests that cash and reinvests it into new niche businesses.

This recipe has worked for years. Now that Constellation’s business has fairly substantial scale, growth could slow when compared to the past 10 years. Yet it is being creative about how it allocates capital.

It has started to target larger SaaS businesses, and it could potentially spin-out other niche parts of its business. Even if its growth rate were to be half of its 10-year average, investors could still earn 15-20% average annual returns. For a long-term hold, this is one Canadian tech stock that still has a great future ahead.

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 Robin Brown owns shares of Constellation Software, Lightspeed POS Inc, and Topicus.Com Inc. The Motley Fool owns shares of and recommends Constellation Software, Lightspeed POS Inc, Shopify, Square, Topicus.Com Inc., and Twilio. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

More on Tech Stocks

cloud computing
Tech Stocks

3 No-Brainer Tech Stocks to Buy With $1,000 Right Now

These three Canadian tech stocks could be among the best growth opportunities in the market right now.

Read more »

happy woman throws cash
Tech Stocks

3 Growth Stocks That Could Be Long-Term Wealth Creators

These three growth stocks aim to grow their financials at a higher rate than the industry average, thus delivering superior…

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Is POET Technologies a Top AI Stock for Canadian Investors?

Canada has relatively few AI stocks, and the ones it has are different from American AI stocks in terms of…

Read more »

Rocket lift off through the clouds
Tech Stocks

2 Growth Stocks That Could Skyrocket in 2025 and Beyond

Wondering what types of stocks could rapidly rise in 2025? Check out these two stocks with substantial upside if they…

Read more »

up arrow on wooden blocks
Tech Stocks

The 3 Smartest Tech Stocks to Buy With $500 Right Now

Tech stocks can be seen as a bit risky, but these three have far less risk and more stability for…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Tech Stocks

Shopify: A Must-Have Growth Stock for Your TFSA Now (and the Next 10 Years)

Shopify (TSX:SHOP) stock isn't just a top growth company, it's a titan worth owning in your decades-long TFSA fund.

Read more »

cloud computing
Tech Stocks

Best Stock to Buy Right Now: Manulife vs CIBC

Want the best stocks? These two are certainly the best options. But which is the better buy?

Read more »

profit rises over time
Tech Stocks

4 Reasons to Buy Constellation Software Stock Like There’s No Tomorrow

Constellation Software stock continued its climb upwards after recent earnings, and this only adds to its appeal.

Read more »