The Canadian equity markets had an impressive 2025, with the S&P/TSX Composite Index rising over 28%. Interest rate cuts, improving corporate earnings, and healthy commodity prices drove the index higher. Meanwhile, the index has continued its uptrend, rising over 4% this year. Besides, Scotia Capital expects a strong 2026 for Canadian equities. As earnings season approaches, the investment banking and capital markets arm of the Bank of Nova Scotia forecasts the TSX’s earnings per share (EPS) to rise 8.4% to $452 in the fourth quarter, supported by strong performances from the precious metals and banking sectors.
Against this optimistic backdrop, I believe the following two growth stocks are well-positioned to sustain their upward momentum and deliver healthy returns this year.
Celestica
Celestica (TSX:CLS) is a leading electronics manufacturing services provider that delivered an impressive return of more than 206% last year. Maintaining its upward momentum, the stock is up 6.8% year to date. Strong quarterly performances and an improving outlook, supported by rising demand for its products and services, have driven the share price higher.
In its most recently reported third quarter, Celestica posted robust growth, with revenue and adjusted earnings per share (EPS) increasing by 27.8% and 51.9%, respectively. The company also ended the quarter with $305.9 million in cash and cash equivalents and total liquidity of $1.1 billion, leaving it well positioned to fund its growth initiatives.
Meanwhile, enterprises are moving past pilot artificial intelligence (AI) initiatives and embedding AI into their core business strategies and everyday operations. At the same time, the growing use of AI-powered tools by individuals is increasing demand for greater computational capacity. These trends are prompting hyperscale customers to accelerate investments in AI-ready data centres, significantly boosting demand for Celestica’s products and services. In addition, the company is expanding its product portfolio through innovative launches, including advanced networking switches and storage solutions, further strengthening its competitive position.
Looking ahead, management expects revenue and adjusted EPS to grow by 26.4% and 52.1% in 2025, followed by 31.1% and 39% growth in 2026. The company also anticipates generating free cash flow of approximately $425 million in 2025 and $500 million in 2026. Despite these strong growth prospects, Celestica trades at a reasonable forward price-to-sales multiple of 2.4, making it an attractive buying opportunity.
5N Plus
Another growth stock that saw strong investor interest last year is 5N Plus (TSX:VNP), which delivered an impressive 140% gain. The momentum has carried into the current year, with the stock up 13.5% year to date. Supported by robust quarterly results and the rapid expansion of the global semiconductor market, the company’s share price has continued to move higher.
In its most recently reported third quarter, 5N Plus posted strong financial results, with revenue and net income surging by 33% and 284%, respectively. The company’s financial position remains solid, as reflected in a healthy net debt-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio of 0.74.
Looking ahead, management remains optimistic about sustained demand for its specialty semiconductors, driven by customers in terrestrial renewable energy and space-based solar power markets seeking advanced materials from reliable partners. Supported by its global sourcing network and well-established manufacturing capabilities, 5N Plus maintains a competitive advantage over its peers.
Despite its strong operating performance and attractive growth outlook, the company’s valuation remains reasonable, with next-12-month (NTM) price-to-sales and price-to-earnings multiples of 3 and 24.3, respectively. Considering these factors, 5N Plus appears well-positioned for continued growth, and I remain bullish on the stock.
