3 Software Stocks That Could Finish 2024 With a Bang!

Docebo (TSX:DCBO) and two other software stocks could skyrocket in 2024 and beyond.

| More on:

There are some pretty great software stocks trading right here on the TSX Index. As the broader market rally looks to extend into the new year, I’d look for Canada’s software plays to get in on the action. Many of them may be fairly valued after a solid past few quarters of trading. Still, I think they represent a terrific value for investors seeking growth at a reasonable price.

Without further ado, let’s look at three domestic software stocks that I’d bet will finish next year higher, perhaps much higher, as the bull market looks to kick into high gear after more than a year of rocky trading.

Constellation Software

First, we have Constellation Software (TSX:CSU), a software giant that’s created value via prudent mergers and acquisitions over the years.

The stock is the epitome of a smart beta play, with less-choppy moves than the broader TSX Index (0.83 beta, which entails somewhat less market correlation), strong long-term momentum (shares have soared more than 250% in the last five years!), stellar management, and rock-solid fundamentals. As others go on about the so-called Magnificent Seven stocks, which have gotten a whole lot pricier in recent months, I’d look to Canadian software gems in Canada, just like Constellation.

Though the stock’s near a new all-time high at above $3,200 per share, I still find the company doesn’t get as much coverage as it deserves. Is it the number-one artificial intelligence (AI) frontrunner?

Perhaps not, but the company has a unique (and proven) formula to grow, and it’s not about to pull the brakes, even as macro headwinds and high rates weigh down most other growth-centric firms.

Docebo

Docebo (TSX:DCBO) is a lockdown-era darling that rocketed higher, as people began to work from home (WFH). Now that the calls to return to offices are growing louder, the WFH beneficiaries seem to be in a bit of a slump. Though Docebo AI-leveraging learning management software (LMS) makes it easier to train remote employees, I still think it has a place in hybrid workforces.

Indeed, people want more folks to return to offices, but many employees still want a few days to work from home. The hybrid model works favourably for a firm like Docebo, which still has massive room for growth from here. Sure, the pandemic tailwind is gone, but the firm still has a promising software product that can win over new clients over time as the firm introduces new advancements impossible to ignore. Of course, I speak of AI and its ability to make Docebo’s platform even better.

Docebo’s a stealth AI play and one that could have more upside in 2024 than the Magnificent Seven heavyweights.

Shopify

No top Canadian software stock list would be complete without e-commerce titan Shopify (TSX:SHOP), which is hovering right below $100 per share after its incredible Black Friday and Cyber Monday.

Though Shopify stock was blasted for its “untenable valuation” by an analyst named Clarke Jeffries, I still think the high price of admission isn’t as lofty as it seems when you consider the potential for central banks to have more flexibility with rates. Sure, there’s more hype baked into Shopify after a hot year. However, I believe Shopify’s growth story is more than just about the macro.

The company has impressive tech that can win market share away from rivals. The total addressable market is still quite sizeable, and if Shopify can keep delighting, I see more room for the stock to gain over the next five years. Could a correction be thrown in between now and 2024’s end? Sure, but any such dips ought to be viewed as chances to buy more. In the meantime, I wouldn’t bet against the company as it roars higher, even if shares are the “priciest” they’ve been this year.

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Constellation Software and Docebo. The Motley Fool has a disclosure policy.

More on Tech Stocks

Canada national flag waving in wind on clear day
Tech Stocks

Trump Trade: Canadian Stocks to Watch

With Trump returning to the presidency, there are some sectors that could boom in Canada, and others to watch. But…

Read more »

ways to boost income
Tech Stocks

2 Stocks to Help Turn $100,000 Into $1 Million

Do you want to turn $100,000 into $1 million quickly? Look for small- or mid-cap stocks that are scaling as…

Read more »

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

telehealth stocks
Tech Stocks

Well Health Stock: Buy, Sell, or Hold?

Another record-breaking quarter and strong demand sets the stage for continued momentum for Well Health stock.

Read more »

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Stocks Soaring Higher With No Signs of Slowing

Three TSX stocks continue to beat the market and could soar higher in an improving investment landscape.

Read more »

profit rises over time
Tech Stocks

2 Non-AI Tech Stocks to Buy in November for Better Returns

Not all AI stocks are riding the hype train, and for many investors, well-understood and predictable growth stocks might be…

Read more »

worry concern
Tech Stocks

In a Few Years, You’ll Probably Regret Not Owning BlackBerry Stock

Here’s why I believe BlackBerry could be one of the most overlooked Canadian tech stocks right now.

Read more »