Load Up on These Growth Stocks Today Before They Lead the Charge in 2025

Here are three top TSX growth stocks that could be well-positioned for a big upcoming surge in 2025.

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There’s been some significant volatility in the market in recent years. But for most growth investors, putting capital to work in top growth stocks has certainly paid off. This has been the case, to a large degree, in the Canadian stock market as well.

As we kick off a new year, expectations for how specific growth stocks will perform in 2025 vary widely. However, I think the following three growth stocks could be best positioned for a big 2025, at least as far as Canadian tech companies are concerned.

Here’s why.

Shopify 

As one of the largest publicly traded companies in Canada, Shopify (TSX:SHOP) remains a favourite as we approach the next year. A leading e-commerce infrastructure provider, Shopify is partnered with millions of small businesses as well as leading mega-cap companies and global brands. As of 2024, the company has a 30% market share among e-commerce companies and a 10% share in the United States. 

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Shopify’s value proposition comes from its status as an attractive solution to merchants and sellers frustrated with the largest platforms like Amazon and eBay. As more merchants subscribe to Shopify’s services, Shopify is set to grow its user base and revenue. The company’s third-quarter financial results showcase its growth potential as it has achieved 26% revenue growth and 19% growth in free cash flow. 

Constellation Software

Constellation Software (TSX:CSU) is a diversified software company and a leading international provider of various software and services. The company acquires, develops and manages software businesses with a record of over 500 acquisitions since its founding. 

Created with Highcharts 11.4.3Constellation Software PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The company’s primary business strategy involves acquiring businesses engaged in niche software applications. Constellation Software focuses on acquiring exceptional businesses based on growth, profitability and quality of management at relatively low prices. 

In 2024, Constellation Software continued making valuable acquisitions, with deals amounting to $197 million in cash and $70 million in deferred payments. With strong earnings growth this year, the company has built a strong position to make further acquisitions.

As of the third quarter of FY2024, Constellation reported $2.5 billion in revenues, up 20% from the previous year. Currently, the company has $2.1 billion in cash on its balance sheet, providing a long runway for additional acquisitions (especially when factoring in the company’s operating cash flows).

OpenText

Waterloo-based OpenText (TSX:OTEX) is a Canadian information company that creates and sells enterprise information management (EIM) software and solutions. The company offers a diverse portfolio of solutions across business networks, security, developer APIs, content, digital experience, and operations management. Its customers include top global firms, government agencies, and professional service providers. 

Created with Highcharts 11.4.3Open Text PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

OpenText has managed to catch investors’ attention by building its cloud services, EIM and artificial intelligence (AI)-driven solutions. OpenText’s AI-based tools have become a central part of the company’s offerings, helping its clients manage data more effectively. As more companies adopt AI tools to improve their processes, OpenText stands to increase its revenues over time.   

The company’s recent earnings report showed an 8.6% decline in revenue growth year on year, leading to a selloff in the company’s share price. However, OpenText’s profitability has grown, with an operating margin of 16.74% and a net income of $465 million. Moreover, the company has continued to provide investors with strong cash flows ($1 billion this past year), which it can invest in acquisitions and new technologies. 

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Amazon, Constellation Software, and eBay. The Motley Fool has a disclosure policy.

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