There are a lot of areas that tend to be avoided during an economic downturn. The housing industry and the financial sector are just two areas where analysts are predicting a huge downturn with an incoming recession. While investors might want to buy up these shares on the cheap, there are still other areas that could in fact continue to see gains, even while the markets are down.
The one industry I think will continue to be more on the upward trend is the tech industry. This area has proven to be a diamond in the rough for a number of stocks over the past six months. While there have been dips in the markets, there are a few stocks in particular that have continued relatively unscathed on an upward trajectory.
Not to say a recession wouldn’t necessarily beat these stocks down. However, over time I believe all three of these stocks remain great investments for those looking to make strong gains over the long term. After all, a recession doesn’t just erase the future potential of any of these stocks.
Even on the cusp of a recession Lightspeed POS (TSX:LSPD) has proven it can hold its own. The company broke the record for the highest Canadian initial public offering (IPO) this year and the highest in the tech industry in the last nine years at $240 million. Since that IPO, the company has grown a whopping 94% in just a few short months.
That’s because many analysts are touting Lightspeed as the next big thing to hit the e-commerce industry. Lightspeed is part of the point-of-sale service, offering analytics and help to its small- and medium-sized business clientele mainly in the restaurant and retail industry.
It’s already set up in more than 100 countries, but there is still so much growth to be had. If Lightspeed can manage to bring on bigger clients, it shouldn’t have any trouble sky rocketing in share price over the next few years.
Then, of course, there’s Shopify (TSX:SHOP)(NYSE:SHOP), the darling of the tech industry. I probably don’t have to tell you about the crazy growth this company has had, and even after a dip more recently, the company has still climbed 151% in share price since the beginning of the year.
While investors are getting skittish about this stock ahead of a recession, if you’re like me and picking this up for the long run, then any dip shouldn’t worry you. Shopify is setting itself up to be as big as any FAANG company, growing its fulfillment centres, signing on huge clients, and bringing in more and more recurring revenue.
While a downturn could happen in the short term for Shopify, this stock remains a buy with even today’s conditions.
Finally, investors have the bargain of a lifetime with a stock like BlackBerry (TSX:BB)(NYSE:BB). BlackBerry is in the midst of a huge comeback within the cybersecurity sector. Rather than make hardware as it used to, the company now creates the software that can protect every company that uses wireless; which, really, is almost every single company out there.
It’s already signed on some huge clients and will likely continue to do so, as the company proves its worth in a number of industries.
Of course, the most exciting at the moment is providing security to autonomous vehicles. If BlackBerry can prove it can handle this area, it will prove it can handle anything, setting itself up for even more partnerships in the future. That means huge share growth from its current price under $10 per share.
With earnings around the corner, investors should be watching very closely.
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Fool contributor Amy Legate-Wolfe owns shares of Lightspeed POS Inc and Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of BlackBerry, BlackBerry, Lightspeed POS Inc, Shopify, and Shopify. BlackBerry and Shopify are recommendations of Stock Advisor Canada.
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