It’s always a good idea for long-term investors to start investing in stocks at an early age to multiply their savings. In addition, Canadian investors have the advantage of increasing their potential returns by utilizing the power of the Tax-Free Savings Account (TFSA). By doing so, TFSA holders won’t have to worry about paying taxes on the returns they get on their stock investments.
If you keep adding some fundamentally strong, undervalued growth stocks to your TFSA each year, it won’t be very difficult for you to generate outstanding returns on your savings or even become a millionaire from stock investing. In this article,
I’ll highlight one tech stock that I find way too undervalued right now based on its future growth prospects. This Canadian stock could help TFSA investors multiply their savings fast in the long term.
The right time for TFSA investors to buy tech stocks In 2022 so far, the stock market has been highly volatile due to uncertainties related to multiple factors, including worries about the omicron variant, high inflation, and the Russian invasion of Ukraine. These factors could be blamed for TSX Composite Index’s 5.5% year-to-date losses and a big crash in the technology sector.
While these worries have prompted investors to cut their risk exposure by reducing their tech sector holdings, these uncertainties might not significantly affect tech companies’ long-term growth outlook. That’s why the recent tech meltdown has made several tech stocks look way too cheap. For example, BlackBerry (TSX:TSX:BB)(NYSE:BB) stock has seen a big selloff in 2022 amid the recent tech rout. Now, let me explain why I find this tech stock very attractive for TFSA investors.
BlackBerry stock If you don’t know it already, BlackBerry is a Waterloo-based cybersecurity-focused enterprise software company with a market cap of close to $4 billion. Its TSX-listed stock currently trades at $6.68 per share with nearly 39% year-to-date losses, despite consistently beating analysts’ earnings expectations in the last three quarters.
In the fourth quarter of its fiscal year 2022 (ended in February this year), BlackBerry surprised investors and analysts by reporting an adjusted net profit of $6 million. Street analysts were expecting the company to report a net loss of more than $29 million for the quarter. However, its better-than-expected financial performance in recent quarters is not the only reason why I find BB stock worth buying for TFSA investors. Instead, I want to highlight BlackBerry’s outstanding future growth potential.
What makes it to buy for TFSA investors In the last couple of years, BlackBerry has increased its focus on developing machine learning and artificial intelligence-based advanced technological solutions for futuristic cars, including autonomous and electric vehicles. For example, the company has been developing its intelligent vehicle data platform called IVY in collaboration with Amazon (NASDAQ:AMZN) Web Services since December 2020. This data platform will allow automakers to collect and utilize vehicle sensor data to provide better functionalities and features in their vehicles.
While BB’s QNX software is already widely used by most large automakers across the world, its new technological solutions, including the IVY platform, could make it one of the biggest players in the mobility segment. As the demand for autonomous and electric vehicles is expected to skyrocket in the next decade, BlackBerry’s focus on technological solutions for such vehicles could help it post solid financial growth in the coming years and trigger a long-term rally in its stock.
Given these positive factors, TFSA investors may want to add BlackBerry stock to their portfolio right now at a big bargain.
The post TFSA Investors: This 1 Tech Stock Could Help You Become a Millionaire appeared first on The Motley Fool Canada.
The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.