Building a $25,000 Tech Stock Portfolio That Could Thrive for a Decade
Written by Jitendra Parashar at The Motley Fool Canada
If you want to build long-term wealth through tech stocks, the key is to focus on strong fundamentals and stick to the Foolish Investing Philosophy to give your portfolio the time it needs to grow. The tech sector could be volatile in the short term, but over a 10-year horizon, it has the potential to deliver market-beating returns.
In this article, I'll highlight two tech stocks to consider today that have the potential to turn your $25,000 investment into something much larger over the next decade.
Kinaxis (TSX:KXS) could be a great tech stock for investors planning a portfolio that's built to last. The Ottawa-based software firm focuses on artificial intelligence (AI)-powered supply chain solutions for businesses.
The company delivered a solid first-quarter financial performance, with its total sales rising 11% YoY (year over year) to US$132.8 million and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) jumping 46% to US$33.1 million. That drove its profit margin and earnings per share to record levels. More importantly, Kinaxis reaffirmed its full-year outlook and expects up to US$550 million in total revenue and a healthy adjusted EBITDA margin of up to 25%.
Its recurring revenue model also looks strong, with annual recurring revenue climbing 14% to US$372 million in the latest quarter. And with the help of multi-year contracts and high customer retention, the tech company has strong visibility into future cash flow.
Moreover, Kinaxis is doubling down on AI features through its Maestro platform and recently partnered with Databricks to bring even more intelligence and speed to enterprise decision-making. That's on top of its new tariff response solution, which aims to help global companies navigate one of the most complex issues in supply chain planning today.
KXS stock has climbed nearly 34% over the last year to currently trade at $201.30 per share with a market cap of $5.7 billion. In my opinion, its consistent growth and expanding margins could be rewarding for patient investors willing to hold it over the next decade.
Topicus.com (TSXV:TOI) is another tech stock worth considering if you're building a long-term portfolio. The tech firm mainly develops and manages specialized software for niche markets across Europe, supporting sectors like finance, education, and healthcare.
In the first quarter this year, its total revenue rose 16% YoY to €355.6 million with the help of 4% organic growth. Similarly, its net quarterly profit climbed to €38.8 million. While the bulk of this growth came from new acquisitions, the tech company's consistent organic performance also signals a stable underlying business.
To boost its financial growth prospects, Topicus is actively deploying capital. For example, it recently invested €168 million in Asseco Poland, which could open up new growth opportunities for Topicus.
After rallying 48% over the last year, TOI stock is currently trading at $165.03 per share with a market cap of $13.7 billion. With consistent cash flow and a strong acquisition model, Topicus stock could keep compounding value over time, especially for investors focused on the long game.
The post Building a $25,000 Tech Stock Portfolio That Could Thrive for a Decade appeared first on The Motley Fool Canada.
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Fool contributor Jitendra Parashar has positions in Kinaxis. The Motley Fool has positions in and recommends Topicus.com. The Motley Fool recommends Kinaxis. The Motley Fool has a disclosure policy.
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