The inventory market undergoes numerous cycles of dips and rallies. In a given macroeconomic state of affairs, some sectors carry out and a few don’t. In 2023 and 2024, the expertise sector noticed a pointy restoration after crashing in 2022. The 2022 crash was pushed by accelerated rate of interest hikes, which burst the bubble on all overvalued tech shares. The 2023 restoration was pushed by the factitious intelligence (AI) frenzy triggered by ChatGPT. These have been the broad sector tendencies, however not all tech shares carried out in response to the pattern.
Not all tech shares are price shopping for
Some adopted the 2021 development pattern of work-from-home, however not the 2023 AI pattern. Thus, it’s crucial to take a look at the person firm’s efficiency fairly than simply the sectoral pattern earlier than investing.
Let’s take the case of Shopify (TSX:SHOP) and Lightspeed Commerce (TSX:LSPD). They each soared through the pandemic when buyers made cash from the e-commerce wave. Between September 17, 2020 and their 2021 peak, Shopify and Lightspeed’s share worth surged 80% and 308%, respectively. They even fell 80% within the 2022 tech meltdown. Whereas Shopify recovered partially, Lightspeed didn’t. What occurred?
Shopify vs. Lightspeed
Shopify recovered partially by promoting its logistics enterprise and preserving the expansion cycle going. The corporate has sustained its income development fee at a mid-20% fee. It has efficiently reported optimistic working earnings in all 4 quarters in 2024. This restoration turned across the 2022 dip right into a 291% rally from October 2022 to June 2025.
Nonetheless, Lightspeed failed to show worthwhile because it made too many share-based acquisitions through the 2021 tech bubble, which considerably diluted its fairness. Brief-seller Spruce Level focused the inventory, accusing the corporate of a scarcity of transparency concerning margin decline. At a time when the corporate was in hassle, it underwent a administration change as founder and CEO Dax Dasilva stepped down, and JP Chauvet took management in February 2022.
Chauvet was tasked to show these acquisitions worthwhile in an atmosphere the place client spending was falling. Dasilva returned in February 2024 as interim CEO, and the cleanup started. The corporate impaired its goodwill twice in 5 years, US$748.7 million in fiscal 2023 and US$556.4 million in fiscal 2025. The impairment was triggered, as its share worth had misplaced greater than 80% in worth, due to which its web property exceeded its market capitalization. Though Lightspeed has lowered its losses, it has not but turned worthwhile.
One tech inventory to purchase and one to keep away from
Tariff uncertainty has as soon as once more dampened client discretionary spending. At such occasions, it’s higher to keep away from Lightspeed Commerce, which couldn’t carry out even in a robust economic system. Whereas it may possibly nonetheless be inventory for lively merchants who want to profit from the vacation season rally between September and November, it will not be inventory to purchase and maintain.
Lightspeed inventory has been making new lows each time. Its share worth fell 19% from its earlier low in October 2023. Additionally, its 52-week highs are falling, with its 2024 excessive of $26.60 decrease than the 2023 excessive of $27.82.
Shopify, then again, is a inventory to purchase, as the corporate leverages economies of scale to make earnings. The inventory is in an uptrend as its 52-week highs and lows are higher than the earlier ones.
