2 Hot Stocks to Buy in August

Lightspeed POS stock and Shopify Inc. stock could be ideal stocks to buy in August to enjoy stellar returns in your investment portfolio.

| More on:

After much speculation and volatility, it seems that the Canadian stock market is back on track to deliver stellar returns to stock market investors. The year 2020 was a rollercoaster of a year for investors, with many high-quality stocks declining to unanticipated lows. One of the most interesting outcomes in the pandemic was a prolific growth for Canadian tech stocks.

The changing global landscape affected every aspect of our lives. However, advancements in technology and innovative tech-based solutions provided much-needed relief to the professional landscape. The tech sector became the primary growth driver for the Canadian stock market as many tech companies became massive.

The tech sector went through a drastic pullback in recent weeks after delivering stellar returns for most of 2020. As conditions become favourable for the tech sector again, I would like to discuss two industry giants that you should consider adding to your portfolio this month to enjoy substantial returns from these assets before they start growing further.

Lightspeed POS

Lightspeed POS (TSX:LSPD)(NYSE:LSPD) has been a powerful presence on the TSX since it became a publicly traded company in 2019. The stock is up by more than 480% in the last two years and is up by 184% in the last 12 months. Trading for $110.05 per share at writing, the Canadian tech stock has been an inspiring success story that has made many investors much wealthier in a short time.

Unlike many other assets that offer high growth with a higher degree of risk, Lightspeed’s stellar performance is backed by favourable industry conditions and intelligent decisions by the company’s management. The company caters to a wide variety of e-commerce and POS needs for SMBs. The company’s excellent mergers and acquisitions strategy has also allowed it to expand its geographical presence, allowing it to generate rapidly growing revenues.

Despite the volatility that it might add to your portfolio, Lightspeed stock could be worth adding to your portfolio if you seek significant returns on your investment.

Shopify

Shopify (TSX:SHOP)(NYSE:SHOP) is a tech success that has eclipsed every other stock on the TSX. The e-commerce behemoth has enjoyed an epic run on the stock market. Since its inception on the stock market in May 2015, Shopify stock’s valuation has increased by an unbelievable 5,336%.

At writing, the tech stock is trading for $1,899.38 per share, but it managed to cross the $2,000 mark earlier before dipping down to this valuation.

Despite analyst expectations of a significant correction many times in recent years, Shopify stock has continued to provide stellar returns to its shareholders. The macro trends in the industry favour continued growth for the stock, even at such high valuations.

Its recent pullback from the $2,000 mark could provide investors with an ideal opportunity to pick up its shares before it reaches stratospheric heights.

Foolish takeaway

The global landscape was already going through a shift that favored increasingly digitized business processes. However, the onset of the pandemic forced a rapid acceleration of the process, and companies like Lightspeed POS and Shopify were well-positioned to capitalize on the shift.

Despite a recovery on the horizon, there have been some permanent changes to the world and how we conduct businesses. Tech companies like Shopify and Lightspeed might have only just started to realize their long-term growth potential and the favorable industry trends will likely continue.

It might be a good decision to add shares of the two companies to your portfolio today to capitalize on the substantial upside potential that the tech sector giants can offer.

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 owns shares of and recommends Lightspeed POS Inc and Shopify. 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 Investing

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

stock research, analyze data
Bank Stocks

Canadian Bank Stocks: Buy, Sell, or Hold?

There are opportunities and risks on the horizon for the Canadian banks.

Read more »

Young Boy with Jet Pack Dreams of Flying
Stock Market

Is Air Canada Stock a Good Buy After Its Q3 Results

Down almost 60% from all-time highs, Air Canada is an undervalued TSX stock that remains an enticing investment in November…

Read more »

cloud computing
Investing

Where to Invest $10,000 in November

Given their solid underlying businesses and healthy growth prospects, I expect these two defensive stocks to outperform uncertain outlook.

Read more »

coins jump into piggy bank
Retirement

Here’s the Average RRSP Balance at Age 44 for Canadians

Holding stocks like Alimentation Couche-Tard (TSX:ATD) in an RRSP is a good way to build your wealth.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »