September is profit-taking season for many traders, especially after the sizzling-hot summertime gains we’ve enjoyed over the past few months. And while a hot bull run doesn’t have to end in tears for those who rode the TSX Index higher, I do think that investors should brace themselves for a surge in volatility. Remember, those flat, unremarkable, and less exciting trading days we had in July and August?
Those days could be coming to an end as investors hope to get ahead of each other in a month that doesn’t exactly have the best track record. I have no idea if September of 2025 will be any different or if that summer strength will continue going strong.
Either way, Canadians shouldn’t look to time the market, as it could mean missing out on more outperformance from the TSX Index, which has been powered by bank stocks, shares of Shopify (TSX:SHOP), pipeline plays, and, of course, the top-tier gold miners. Either way, I’m not yet ready to give up on Canada’s best-in-class growth stocks just because September and October may be viewed by some as chillier months for the broad stock market.
When it comes to growth stocks, think more about the long-term narrative and the type of total returns that can be achieved over the next five years at a minimum. Many trends are at work today (most notable among them is AI), and although Canada may already be in a recession, resilience south of the border may be more of a driver of the scorching-hot TSX Index.
Let’s check in on two growth plays worthy of your watchlist as summer (and perhaps a bit of market momentum) winds down:
Source: Getty Images
Shopify
If you’re not already a Shopify shareholder, you’re probably feeling tempted to chase the stock after its two-year surge of more than 116%. Indeed, Canada’s biggest tech darling is back, and there’s more growth on the horizon as AI and digital payments look to give future results a shot in the arm.
Though SHOP stock is getting harder to value again while the name goes for over 78 times forward price-to-earnings (P/E), I wouldn’t ditch the stock as it comes in after failing to breakout to new all-time highs. I think new highs will be just a matter of time.
However, for now, I think the pricey-looking name is one that new investors should look to dollar-cost average into, given the magnitude of volatility that could hit this September. For wise investors, a seasonal correction and rise in volatility is a window of opportunity, not a red flag. As such, investors should give high-quality names like Shopify a closer look as the technical strength begins to break down a bit.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) stock rose more than 6% on Wednesday’s session as the firm hinted at more acquisitions to come. Indeed, a 6% rally seems a tad excessive for news that, quite frankly, probably shouldn’t have been news, given Couche-Tard is a growth-by-acquisition story, yet the lack of a 7 & i Holdings deal will allow the firm to spend the money elsewhere. In numerous prior pieces, I highlighted the potential for alternative deals that would drive shares higher.
In any case, I think the past few weeks of action in the name have been exaggerated in direction. At the end of the day, Couche-Tard is a fantastic consumer staple growth stock that could soon turn a corner as deal announcements begin to come in again after a lengthy pause amid Couche-Tard’s prior pursuit of 7 & i. With the stock trading at 19.7 times trailing P/E, with a 1.1% yield, I find it to be a steal after its decent Q1 report.
