2 tech stocks I’d buy and hold for the next 10+ years

Tech stocks are back on the rise. Zaven Boyrazian shares two companies from his portfolio that he believes will explode over the long term.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Tech stocks have been regaining popularity after inflation fears dented many share prices in March this year. Whether they can see a repeat performance of their stellar growth during the pandemic remains to be seen. But it seems possible. After all, lockdown restrictions meant many businesses discovered new technological solutions.

There are two tech stocks already in my portfolio that look primed for long-term growth. And while they’re certainly not risk-free, I’m definitely considering buying more shares. Let’s take a look.

The rise of remote learning solutions

It’s no secret that having a talented workforce is essential for any business to succeed. But due to the pandemic, in-person training has been somewhat interrupted for the past year. Fortunately, Learning Technologies Group (LSE:LTG) was able to provide a solution.

The tech stock offers a comprehensive collection of learning software and services designed to be integrated with existing training pipelines. This makes it easier for businesses to transition their training methods. It also enables employees to improve their knowledge from the comfort of their living rooms.

LTG has managed to achieve some impressive growth in recent years. The continual expansion of its offerings has enabled the management team to grow its revenue by an average of 36% per year for the last five years. At the same time, the bottom line moved out of the red, with a loss of £1.3m in December 2016 but a profit of £17.4m in December 2020.

As promising as this growth is, it’s not without its risks. Digital learning solutions is a highly competitive and fragmented market. Consequently, the tech stock has been pursuing an acquisitive growth strategy as the sector begins to consolidate. However, acquisitions can lead to a rapid increase in unexpected costs and potentially destroy value rather than create it. Suppose the management team make a series of bad purchases? In that case, not only will the balance sheet begin to suffer, but the share price will as well.

These Tech stocks have their risks

The tech stock behind e-commerce sales

I think it’s fair to say that the world’s dependence on e-commerce has exploded recently. With UK lockdown restrictions preventing roughly 750,000 stores from opening their doors, many consumers went online to shop. In fact, this behaviour change is a primary contributing reason to why 85,000 businesses across the UK launched an online store in 2020.

But this sudden surge in online marketplaces creates a new problem. How do these firms drive customers to their online storefronts as opposed to those of competitors? Enter dotDigital (LSE:DOTD). The tech stock provides a software solution that automates the marketing process of online businesses. In other words, it tracks customer behaviour and interaction on a website. This data is then used to generate personalised marketing material distributed through multiple channels, including email, text messages, and social media. The end result is a higher visitor-to-customer conversion rate and increased retention for repeat purchases in the future.

As exciting as this technology may be, there is a looming regulatory threat on the horizon. The rising issue of online privacy led to the formation of the General Data Protection Regulation Act (GDPR) in Europe. This legislation significantly improved individual privacy protection for consumers. But it also created new barriers for dotDigital to overcome. While the business did manage to adapt, any further restrictions may begin to impede its impressive growth.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Zaven Boyrazian owns shares of Learning Technologies and dotDigital Group. The Motley Fool UK has recommended Learning Technologies and dotDigital Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

2 of the best stocks to buy now with £500

I think that Berkshire Hathaway and Activision Blizzard are two of the best shares to buy today. I think they…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

I bought 10 cheap shares. Here’s what happened next

After recent price falls, we bought 10 cheap shares for extra passive income in future. This mini-portfolio offers a tasty…

Read more »

Close up view of Electric Car charging and field background
Investing Articles

Is now a good time to buy Chinese EV stocks as economic growth slows?

Chinese EV stocks tend to trade at a considerable discount to their US counterparts. And that's one reason I like…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

I’d happily start investing in today’s stock market – here’s why

The stock market has been moving up even as the economy has been looking shakier. Would our writer start investing…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

Up 22% in a month! This FTSE 100 takeover target could rise further

A takeover bid for an FTSE 100 firm is big news. Here's what I'm doing about RS Group shares after…

Read more »

Young female analyst working at her desk in the office
Investing Articles

Income shares could help me turn £300 into £500. Here’s how

Our writer believes investing in the right income shares over the long term could be lucrative. Here is his approach.

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

I bought these FTSE 250 shares for fat dividends!

These two FTSE 250 shares have gained in value since I bought them recently. But I still see these stocks…

Read more »

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

Should I buy this REIT to add to the others that pay me juicy dividends?

Jabran Khan looks closer at this real estate investment trust (REIT) and decides if he would add the shares to…

Read more »