Investing in seasonal stocks can give you short-term returns and also help you accumulate more stocks at the dip. Some stocks enjoy a seasonal uptrend in the first half and some in the second half. This seasonality comes as revenue or cash flows are skewed to a particular quarter. Stock prices follow the cash trail, which drives seasonal rallies.
Four stocks to buy in the second half
We are already two months into the second half of the year, and the seasonal rally has yet to pick up for a few stocks because of the latest August tariffs.
Shopify stock
It is a no-brainer that the e-commerce stock Shopify (TSX:SHOP) rides the Santa Claus rally as consumers go on a spending spree, companies stock up festive-special items for Halloween, Black Friday, Thanksgiving, Christmas, and more. Since Shopify has expanded beyond North America, it also enjoys festive season sales in other countries. Shopify is prepping for the festival order volumes. It has integrated with DHL to enhance international shipping for U.S. merchants.
For the last three years, from 2022 to 2024, Shopify stock surged 80-100% between October and early February. This year is slightly different as tariffs have affected consumer spending. However, the Bank of Canada is cutting interest rates to boost spending and control tariff-induced inflation.
The stock is currently in the correction mode, falling 9.5% after surging 30% in the first week of August on strong second-quarter earnings. More corrections could come till the Relative Strength Index (RSI) falls from 56 to below 40. The RSI measures the price momentum to determine if the stock is oversold (under 30) or overbought. You could buy the stock now or wait till mid-September.
Air Canada stock
Air Canada (TSX:AC) is a good seasonal stock as travel demand increases during the summer and holiday season. As ticket sales are the highest during these times, Air Canada stock rallies to $23 and $26, respectively. The stock developed resistance at these price levels after the pandemic. It is because the airline raised significant debt and equity capital, which diluted its earnings and increased its balance sheet leverage.
Hence, the airline stock did not recover to its pre-pandemic level of $50, despite windfall profits during the 2023-2024 revenge travel. The airline has significantly reduced its net debt to $4.8 billion in the second quarter of 2025 from $7.5 billion in 2022 and has started a share buyback. It aims to reduce diluted outstanding shares to less than 300 million by 2030. This could help Air Canada’s stock price to gradually break its $26 cap.
In the short term, it could see a holiday season rally. The early signs are already visible with advance ticket sales rising 24% year over year to $5.4 billion in the first half of 2025. The stock is currently trading at $19.6 and has a 32% upside potential for the second half.
Topicus.com
Topicus.com (TSXV:TOI) is not a seasonal stock, but its cash flows are skewed in the first half as most of the annual maintenance fee is paid at that time. The company acquires vertical-specific software companies, mainly in Europe, that earn recurring cash flow from maintenance. It uses this cash flow to acquire more companies. Every year, cash flow increases as the maintenance fee of newly acquired companies is also added.
Topicus.com stock is correcting from its July peak. It is already down 13.8% with an RSI of 40, hinting that it is closer to being oversold. Over the last four years, the stock has rallied 45-60% in the first half. You could consider buying this stock at the current dip and book your spot in the first-half rally of 2026.
Hive
HIVE Digital Technologies (TSXV:HIVE) is not a seasonal but an opportunistic buy. It has already surged 100% from its April low and could go up to $8 as it expands its Exahash per second (EH/s) capacity from six in February to 25 by November. Higher capacity means it can mine more Bitcoin and grow its revenue. You can consider buying this stock for the rally to November.
