Investing in Canadian growth stocks has certainly been a rewarding endeavour for long-term investors. Whether it’s top tech stocks or companies in the software and services sector, the Canadian stock market has plenty of options to choose from. Among the winners I’ve long focused on are the likes of Shopify (TSX: SHOP) and Constellation Software (TSX: CSU), which I think are two of the most important (and largest) Canadian growth stocks for investors to continue to watch.
In that vein, let’s dive into a few things investors may want to watch this coming year.
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Landscape shifts could be ahead
For Canadian growth stocks like Shopify and Constellation Software, investors will want to keep a close eye on the macro environment as we move further into 2025. Indeed, interest rates have continued to decline as the Bank of Canada looks to shore up domestic growth (and the housing market) with lower rates. That’s a trend that may or may not continue, depending on a number of other factors, such as tariffs coming out of the U.S.
I think the overall environment for Canadian stocks has certainly dimmed quite a bit. These proposed tariffs provide a shroud of uncertainty. And investors don’t like uncertainty.
The good news is that for certain Canadian growth stocks (such as Shopify and Constellation), their international operations largely shield them from such issues, with a large percentage of their sales taking place in the United States. If anything, such stocks could be viewed as a hedge against such a negative macro shift, and that’s one of the reasons these top two tech giants are atop my own personal watch list right now.
Key growth drivers to watch
On the positive front, Canadian tech giants broadly have a number of key growth catalysts that investors should consider. For one, the Canadian tech sector (led by giants such as Shopify and Constellation) continues to provide innovation and emerging technologies integrating artificial intelligence into the e-commerce and software sectors. These global technologies have benefited from wider and more global growth trends and should continue in the years to come.
Canadian fintech companies have also carved out some notable market share in the digital banking world. For investors looking for a unique array of options (at better valuations broadly when compared to other global companies), the TSX is a great place to search for such gems.
Bottom line
In sum, I continue to believe that the Canadian stock market is a treasure trove for deep-value investors and growth investors looking for reasonable valuations.
Canadian stocks tend to grow slower than those in the U.S. and other markets. However, the valuation discount investors receive can more than make up for this relatively sluggish growth (and certain mega-cap tech companies actually have pretty robust growth fundamentals, thank you very much).
