3 Explosive Growth Stocks to Buy Right Now

Growth investors should have these three tech companies at the top of their watch lists in March.

Nicholas Dobroruka ❯

Nik has been writing for The Motley Fool Canada since 2020. After studying marketing at University in his hometown of Montréal, Nik decided to pack up and move west to Vancouver. By day, Nik is a digital media ninja, specializing in Programmatic advertising. By night, you can find him either Mountain biking in Vancouver’s famous North Shore trails or writing for TMF Canada. Tech, digital payments, and renewable energy are three areas that Nik enjoys following and writing about.

Published March 7, 2023 8:30 am EST

After a down year in the stock market in 2022, Canadian investors have the opportunity to scoop discounted shares of many top stocks on the TSX today. While the S&P/TSX Composite Index dropped less than 10% last year, many individual stocks fell far more than that in 2022.

I’ve put together a list of three top tech stocks that any growth investor would be wise to have on their radar. Not all three stocks are trading at massive discounts, but what they all have in common is long-term growth potential.

If you’ve got a time horizon of at least five years, these three growth stocks should be on your watch list.

Descartes Systems

Descartes Systems (TSX:DSG) was one of the few tech stocks on the TSX that managed to remain on par with the broader market’s returns last year. Shares of the tech company are up 15% over the past year and trading just shy of all-time highs today.

Going back five years, the tech stock has returned close to 200% compared to the broader Canadian market’s return of just 30%.

This is one of the most consistent market-beating stocks you’ll find on the TSX. Going back two decades, not many companies on the TSX have outperformed Descartes Systems.

Lightspeed Commerce

Lightspeed Commerce (TSX:LSPD) was one of the many tech stocks that soared following the COVID-19 market crash in 2020 but then spent the majority of 2022 returning all of those gains.

At one point in 2020, shares of Lightspeed were up more than 500%. Today, the tech stock is down 80% from all-time highs and trading below where it was right before the pandemic hit the stock market in early 2020.

There’s no question that the company’s valuation got way ahead of itself in 2020. But despite the tech stock having a rough go in 2022, Lightspeed continues to make strategic moves to set itself up for long-term growth.

The tech company is far from just a point-of-sale hardware provider anymore. Today, it offers both its online and brick-and-mortar customers a range of different services. Management’s continuous focus on innovation is one of the reasons why revenue growth continues to soar at such a torrid rate.

If you can stomach the volatility, this is a company that’s poised for multi-bagger returns in the coming years.

Shopify

Similarly to Lightspeed, Shopify (TSX:SHOP) has been on a roller-coaster ride since the beginning of 2020. Today, shares are trading at just about where they were at the bottom of the COVID-19 market crash. Still, the tech stock is up a market-crushing 200% over the past five years.

At a market cap of over $70 billion, Shopify is one of the largest companies on the TSX. As a result, the high-flying multi-bagger years are likely behind the growth stock. But that certainly doesn’t mean that there isn’t any market-beating growth left in the tank.

As a global leader in the growing e-commerce space, there’s no reason to believe that Shopify will begin lagging behind the market’s returns anytime soon.