The technology industry remains one of the most exciting, high growth industries today. When looking for exposure to this, there are many tech stocks to choose from. But only a few are cutting edge. Only a few are leading tech stocks. Here are two.
Blackberry is setting up for explosive growth
The first thing I would like to point out about Blackberry Ltd. (TSX:BB) is that its technology is widely recognized as cutting edge. In fact, the company has won numerous industry awards. Itâs also secured many partnerships with equally top-notch players.
For example, Blackberry IVY was recently awarded the 2022 Enabling Technology Leadership Award for the connected vehicles industry. This is one of many awards that Blackberry has received over the years for both its machine-to-machine connectivity software as well as its cybersecurity software.
This is the backdrop that is allowing Blackberry to move to the next level. Letâs focus on the connected car as an example. I think itâs fair to say that thereâs an evolution going on as the amount of software in cars is increasing rapidly. The structural growth is huge, and Blackberry is here for it. Design wins for Blackberryâs software have been record-breaking. In fact, in the first half of this year, Blackberry has had more design wins than it has ever had in any full year.Â Â Â Â Â Â Â Â Â Â Â Â Â
Yet, this tech stock has had a rough time in the last few years. Down more than 50% in the last year, Blackberry stock is currently trading at just over $5. This is the level that it was stuck at in 2020. But while this is disappointing for me, as I bought the stock higher up, it doesnât change Blackberryâs massive growth potential. With over $600 million in cash and improving financials, this is a tech stock to buy for 2022 and beyond.
CGI is a tech stock with the most impeccable track record
CGI Inc. (TSX:GIB.A) is another tech stock thatâs highly recognized for its leading technology solutions. CGI is a $24 billion IT and business consulting services firm. CGI has been a solid performer over the last decade. This has been driven by its aggressive acquisition strategy. Simply put, CGI is a consolidator in the highly fragmented IT services industry. This strategy has yielded rewards including many years of steady revenue, cash flow, and profit growth.
In the last five years, CGIâs revenue has grown 12%. Also, its cash flow from operations has grown 25%. The revenue growth was driven by steady organic growth as well as growth through acquisitions. The growth in cash flow from operations was driven by increased efficiencies, which shows up as margin improvements. In fact, in its latest quarter, CGI achieved an EBIT margin of just over 16%. This compares to a margin of below 10% some years ago.
So, we can see how much progress CGI has made operationally. We can also see evidence that the digitization race is alive and well. According to the company, itâs still in the early stages. CGIâs record backlog of $24 billion provides a glimpse into the future demand and revenue growth we can expect from CGI and its stock â and itâs extremely strong.
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* Returns as of 11/4/22
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