Why Big Tech In Canada Could Continue To Outperform

The Canadian technology sector is tiny compared to most other developed nations, however, investors in Canada’s biggest tech stocks have continued to do very well prior to this global pandemic and throughout the pandemic as investors continued to stay focused on the long-term growth these companies provide. In this article, I’m going to discuss why I see this trend continuing, and why I think Canadian large cap tech companies may actually see more impressive growth than those domiciled in other developed markets over the medium- to long-term.

Being inherently smaller than other technology sectors in other global markets makers, Canada’s tech sector is more like a junior or venture index relative to a larger index/portfolio of companies. The companies that make up Canada’s tech sector could be viewed (and rightly so) as higher growth opportunities with longer potential long-term runways for growth and international opportunity.

Capital inflows into TSX-listed companies in general tends to be for less than corresponding inflows into American tech companies, making Canadian player great for "home run" investors looking to find a diamond in the rough, or where few investors look.

Canadian markets have provided investors with a number of great high-flying technology winners of late, and I do believe we will see more of the same on the horizon as international investors discover gems such as Shopify Inc. (TSX:SHOP)(NYSE:SHOP), Constellation Software (TSX:CSU), Open Text Corp. (TSX:OTEX), and others. Invest accordingly.

Invest wisely, my friends.