Got $5,000? 3 Tech Stocks to Buy and Hold for the Long Term

Given their long-term growth potential, these three tech stocks could deliver superior returns in the long run.

| More on:
clock time

Image source: Getty Images

The global equity markets have turned volatile this month, with the S&P/TSX Composite Index falling over 4%. Weak Chinese economic numbers and growing concerns over the United States banking sector appear to have increased volatility in the equity markets. Meanwhile, the correction has provided an excellent buying opportunity in the following three tech stocks. All three could deliver superior returns over the longer horizon.

WELL Health Technologies

WELL Health Technologies (TSX:WELL) is a digital healthcare company that develops products and services to allow healthcare practitioners to offer omnichannel services. Earlier this month, the company reported impressive second-quarter performance. Its revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to shareholders grew by 21.8% and 16.2%, respectively. The company had over 1 million patient visits and 1.5 million patient interactions during the quarter.

Meanwhile, I expect the uptrend in the company’s financials to continue amid the growing adoption of telehealthcare services. With the development of innovative products and growing internet penetration, telehealthcare services are increasingly becoming popular. Notably, Meticulous Research projects the North American telehealthcare market to grow at a 22.8% CAGR (compound annual growth rate) for the rest of this decade.

Facing a growing addressable market, WELL Health is continuing with acquisitions to expand its footprint across North America. Besides, it has invested in developing artificial intelligence-powered tools that can improve productivity and enhance patient experience. Despite its healthy growth prospects, the digital healthcare company trades at an attractive NTM (next 12 months) price-to-sales multiple of 1.2, making it an attractive buy.

Nuvei

Second on my list would be Nuvei (TSX:NVEI), which accelerates the growth of its clients by facilitating next-gen transactions. The growth in e-commerce has led to increased adoption of digital payments, thus expanding the addressable market for the company. Meanwhile, the payment processing company is introducing new innovative products, expanding its product reach, and adding new alternative payment methods, which could boost its financials in the coming years.

Nuvei’s management projects its topline to grow at an annualized rate of 15%–20% in the medium term. It expects to invest around 4–6% of its revenue on capital expenditures. Besides, the management is confident of achieving an adjusted EBITDA margin of about 50% in the long run. Meanwhile, the company is under pressure this year amid weak second-quarter earnings and the lowering of 2023 guidance.

Amid the sell-off, Nuvei trades at 8.6 times projected earnings for the next four quarters, which looks cheap compared to its high-growth prospects.

BlackBerry

My final pick would be BlackBerry (TSX:BB), which offers cybersecurity and IoT (Internet of Things) solutions. The demand for IoT products and services is growing amid digitization. Meanwhile, Markets and Markets projects the global automotive IoT market to grow at a 19.7% CAGR (compound annual growth rate) for the next five years. Given the growth potential, the company is focusing on developing innovative products to strengthen its position in the market.

The company has also witnessed sequential revenue growth in the cybersecurity segment in the May-ending quarter amid solid performance from its core verticals. Meanwhile, the software firm is also strengthening its product offerings by introducing artificial intelligence-powered products. AI could support its growth in the coming quarters. Given its multiple growth drivers, I believe BlackBerry is well-positioned to deliver superior returns in the long run.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei. The Motley Fool has a disclosure policy.

More on Tech Stocks

A person uses and AI chat bot
Tech Stocks

AI Where No One’s Looking: Seize Growth in These Canadian Stocks Before the Market Catches Up

Beyond flashy headlines about generative AI, these two Canadian AI stocks could deliver strong returns for investors who are willing…

Read more »

Data center servers IT workers
Tech Stocks

Better Buy: Shopify Stock or Constellation Software?

Let's dive into whether Shopify (TSX:SHOP) or Constellation Software (TSX:CSU) are the better options for growth investors in this current…

Read more »

nvidia headquarters with nvidia sign in front
Tech Stocks

Nvidia Just Delivered a Beat-and-Raise Quarter. There’s 1 Red Flag Investors Shouldn’t Ignore.

The chipmaker continued to benefit from robust demand for artificial intelligence (AI). But can it last?

Read more »

GettyImages-1473086836
Tech Stocks

Why Super Micro Computer Stock Is Soaring Today

The volatile stock is getting a boost from Nvidia.

Read more »

Snowflake logo in snowflake office on wall_snowflake-1
Tech Stocks

Here’s Why Snowflake Stock Skyrocketed Today

Shares of the data company are up 32% for the day.

Read more »

man touching magnifying glass button on floating search bar internet google search engine
Tech Stocks

Why Alphabet Stock Was Sliding Today

The parent company of Google is facing heat from U.S. regulators.

Read more »

chart reflected in eyeglass lenses
Tech Stocks

Top Canadian AI Stocks to Watch in 2025

Celestica (TSX:CLS) stock and another Canadian AI stock are worth watching closely this holiday season.

Read more »

Nvidia Voyager Headquarters
Tech Stocks

Why Nvidia Stock Rallied (Again) on Tuesday

The chipmaker is expected to report earnings this evening.

Read more »