2 High-Growth TSX Stars Poised to Dominate the Canadian Market in 2025

Shopify (TSX:SHOP) and another tech stock are worth buying as they pull back from their recent 52-week highs.

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Don’t sleep on the high-growth TSX stocks, as the Canadian stock market looks to pull back a bit going into mid-January. Undoubtedly, with the S&P 500 nearly halfway to a correction following Friday’s job number, questions linger as to whether 2025 will be a breather year after two consecutive years’ worth of impressive double-digit returns for the American market.

Though it’s difficult to tell, I still think young investors should look into buying growth stocks on weakness. In this piece, we’ll have a closer look at two high-growth names that are trading at relatively reasonable multiples. As always, if we are looking at a correction to start the year, be ready to buy on the way down incrementally. Indeed, it’s hard to catch a bottom in the market or in any individual name.

That’s why buying partial positions only makes sense. With 2025 starting things off in a volatile fashion, dollar-cost averaging (DCA), I believe, stands out as something that new investors should look to in order to deal with any potential wild swings thrown their way.

Shopify

First, we have e-commerce titan Shopify (TSX:SHOP), whose shares recently retreated below the $150 per-share level. Now down around 13% from 52-week highs, those who may have missed the autumn post-earnings melt-up may have another shot to get in at a fairly reasonable price of admission while the stock is trading at just north of 74 times forward price to earnings (P/E).

Of course, that’s not a huge bargain by any stretch, but for one of Canada’s growthiest and fast-rising large-cap tech stocks, I’d argue that the stock is very fairly priced given the potential tailwinds that could catapult it over the next five years. Indeed, near-term pain tolerance may be needed to jump into this one, so do be ready to average down should the stock be on a round-trip right back to the $113 level, a level where there seems to be a good level of support.

The $193.5 billion tech innovator has come a long way. And with a recent upgrade from an analyst over at Wedbush Securities over the “dominant” position its platform has, I couldn’t be more bullish on the latest slump.

Created with Highcharts 11.4.3Shopify PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Descartes Group

Descartes Group (TSX:DSG) is one of the more underrated tech stocks on the TSX Index, but a name that longer-term growth investors should place on their radars this year. The stock, which trades at 50.5 times forward P/E, isn’t exactly a cheap name, but compared to the magnitude of growth on the horizon, I think such a premium is worth paying up for. With a $13.8 billion market cap, Descartes is one of the lesser-known tech players in Canada.

Still, the supply chain and logistics solutions provider has a lengthy runway for growth and perhaps the ability to continue outpacing the TSX Index while exhibiting far less volatility (0.74 beta, which entails lower market risk). Despite falling 7% off recent highs, the stock is still up 46% over the past year. As such, the momentum is still intact, making DSG an opportunistic buy on the dip.

Created with Highcharts 11.4.3Descartes Systems Group PriceZoom1M3M6MYTD1Y5Y10YALL6 Apr 20203 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025050100150200www.fool.ca

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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.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Descartes Systems Group. The Motley Fool has a disclosure policy.

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