There are more than a handful of exciting stocks that Canadian investors should keep watch of as we enter a new year and the start of the second half of the decade. Indeed, it’s hard not to be upbeat despite the recent slump in the TSX Index just ahead of Santa rally season. Whether or not Santa propels the TSX Index out of its current dip, investors should be ready to pick up some beaten-down names before they have another chance to heat up.
Undoubtedly, many of the themes that gave lift to markets are still in play in 2025. Whether we’re talking about the rise of generative artificial intelligence (gen AI) or the push towards greater operational efficiency, investors should prepare to embrace market corrections and dips that are bound to happen at some point.
Whether or not 25% Trump tariffs on Canadian goods entering the U.S. end up happening, I think it’s a good time to be a net buyer of Canadian stocks, especially with the loonie in a bit of a rut, one that it may struggle to climb out of in the coming weeks and months. Either way, here are two top names I’d be excited to pick up as the great bull market moves into yet another year.
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Shopify
Shopify (TSX: SHOP) stock is closing off the year with a bit of a pullback sparked by recent commentary from the U.S. Federal Reserve that sent jitters down the spines of investors. Despite the year-end tech slip (it’s more of a healthy breather, in my opinion), I view SHOP stock as a fantastic pickup at below the $155 level.
Sure, shares of Shopify have been one of the bigger winners on the TSX Index this year, even after the latest pullback, up around 56% year to date. I feel the AI-leveraging e-commerce titan could be on the cusp of another fantastic year as it looks to monetize some of its new AI-driven tools and features.
In any case, it’s hard not to feel just a bit better about the consumer after a rough couple of years. Whether we’re talking about the wealth effect (consumers feeling better after a second year of big stock market gains) or the gradual lowering of interest rates, the road ahead certainly seems somewhat smoother for the e-commerce icon.
Of course, the valuation seems quite stretched after the latest bounce in post-earnings. Numerous analysts seem to think the name would be better bought on a pullback.
Should the recent 10% correction off 52-week highs be the start of an even larger move, investors may get the opportunity to snag the iconic Canadian tech firm at an even more significant discount. For now, I’m not against buying a quarter of a position as long as you’re ready to keep buying on continued weakness going into the first half of 2025.
National Bank of Canada
National Bank of Canada (TSX: NA) is another Canadian name I’d be excited to pick up on recent weakness. The stock recently slipped more than 6% from its all-time high on factors that I believe do not take away from the long-term narrative. The nearly $45 billion bank has done a fantastic job of gaining ground at a time when most other banks are treading water.
Though still a relative underdog because of its smaller market cap, I think its odds of leading the pack are good as we move into 2025. The stock is poised to close off 2024 with an impressive 30% in gains. Despite this, shares still look cheap at 12.28 times trailing price to earnings (P/E). Though it’s hard to tell how its latest mini-correction will end, I’m certainly not against initiating a position right here if you’re looking for an underrated gem in the banking scene.
