Despite all the chatter around trade and tariffs, Canadian stocks have performed admirably in 2025. The TSX Index is up 12.75% in 2025. It has outperformed premium U.S. indices like the S&P 500 by a considerable margin this year.
TSX outperformance has come from strength in large-cap banking, financials, essential goods, and technology stocks. With Trump’s economic and trade threats, investors may be moving away from overvalued American stocks and choosing better-valued Canadian and European stocks.
Yet, there have been a slew of small- and mid-cap stocks that have seriously outperformed the market this year. There is good reason to believe they could continue to outperform for many years ahead. Here are three Canadian stocks set to continue outperforming the market.
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A Canadian aerospace stock that is soaring high
Firan Technology Group (TSX:FTG) stock is quietly up 60% in the year. This $298 million Canadian stock is up 598% in the past five years!
Firan manufactures circuit boards and cockpit components for the aerospace industry. The major aircraft manufacturers have nearly a decade of backlog supporting strong industry growth.
That has been a tailwind for Firan. In the past few years, it has made several strategic acquisitions that expanded its manufacturing capacity, customer mix, geographic exposure, and product assortment.
The company has a long-term CEO who is a major investor. His incentives are aligned with shareholders. Firan targets 15% average annual growth. If it can continue to execute as it has, it should be able to keep providing attractive returns over the long term.
A Canadian space stock flying to the moon (literally)
Another Canadian stock that has nicely beaten the market this year is MDA Space (TSX:MDA). While it has been a rocky ride holding this stock, it is up 43% in 2025. It is up nearly 200% in the past five years.
MDA is an important global supplier of satellites, space robotics/components, and geo-intelligence. The company has won some substantial satellite development contracts in 2025. In the third quarter, it will have a backlog that is larger than $5 billion.
The space economy is a quickly growing sector. MDA is a crucial component provider that has the expertise and a growing capacity to meet rising satellite demand.
After this Canadian stock’s strong performance, its stock is not cheap. However, its stock has been dipping recently. If it were to decline further, it could be an attractive addition for a longer-term hold.
A tech stock growing by acquisitions
A final Canadian stock that has quietly beaten the TSX is Topicus.com (TSXV:TOI). This $14.6 billion stock is up 44.5% this year. It is up 166% in the past five years.
Topicus owns, operates, and acquires a diverse mix of specialized software companies in Europe. Its software is critical in government, banking, education, healthcare, and legal sectors. It has had a good year deploying capital into interesting opportunities. The market caught wind and pushed the stock up.
Topicus has a strong balance sheet and a great management team. Like MDA, its stock is not cheap after it has soared in 2025. However, this is a top compounding stock to buy for the long term. If it pulls back, it would be a great time to buy.
