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The stock market continues to decline this week. Tech stocks in particular have seen a real market correction. When the market was in rally mode, there was talk of extending multiples of certain tech stocks and trading them at stratospheric valuations. A market downturn leading them to earth valuations is healthy for long-term stock price action.
Here are two tech stocks you should have on your radar and maybe start buying after the significant fixes.
Trade at the speed of light
Trade at the speed of light (TSX: LSPD) (NYSE: LSPD) is sometimes considered a smaller counterparty of Shopify (TSX: SHOP) (NYSE: SHOP). Tech stock plunged 8% on Monday and fell more than 30% from its 52-week high set last month.
There is nothing wrong with the Lightspeed stock giving back gains, as some investors are making a profit. LSPD stock had a super run – it was an 11-bag sack – from the trough of the pandemic market crash in 2020 to its all-time high this year!
Today, the commerce platform, which provides multi-channel sales capabilities, global payments, financing and supplier connection, remains as relevant as it was during the pandemic.
While volatility can be difficult to handle, corrections of 20-50% in these type of tech stocks are normal. As a growing company and clearly focused on growing its sales, this type of significant market correction is often a good time for investors to buy stocks if you have the risk tolerance and a time horizon. investment of at least three years. Notably, it could take a few years for Lightspeed to generate profits.
Shopify stock fell 3% on Monday. Tech action is down about 20% from its 52-week high set in July. It might go down on a smaller scale than Lightspeed just because it’s bigger and actually profitable.
Shopify helps power over 1.7 million businesses in over 175 countries. And the trading platform has been reporting profits since 2017.
In 2020, when the novel coronavirus pandemic first hit global economies, Shopify helped its merchants around the world process nearly $ 120 billion in gross merchandise volumes. Its earnings per share jumped more than 700% in 2020 compared to 2019.
Shopify expects revenue growth to follow this year, but at a slower pace than during the pandemic, which is understandable due to standardization as we get used to having COVID-19 around.
Shopify invited developers and technical entrepreneurs to join them in reinventing the Internet’s business infrastructure. This has brought innovations and improved efficiency to its display cases and checkouts. The company is also encouraging developers by introducing the 0% revenue sharing model for Shopify app developers and theme store developers, which could spark more creativity.
Similar to Lightspeed, the significant correction in Shopify stock is also a good time to consider buying stocks for long-term investors.
The crazy investor to go
When we’re dealing with growth stocks like Lightspeed and Shopify, which don’t pay dividends, it’s all the more essential to buy low and (potentially) sell high. Knowing that 20-50% market corrections are normal with these high growth stocks, it should be a little easier to buy in this market downturn. However, you need to have a strong belief in stocks. Otherwise, the market can trick you into selling your precious stocks for a low price. Buy partial positions at strategic prices to better manage your emotions.
Stay hungry. Stay stupid.