Buying and holding equities within a Tax-Free Savings Account (TFSA) can supercharge your long-term portfolio performance. While these investments may already offer the potential for above-average returns, the tax-sheltered structure of a TFSA ensures that any capital gains and dividends remain tax-exempt. This effect can significantly improve overall returns over time.
In this context, these two TSX stocks stand out as compelling investments for TFSA investors seeking to maximize growth. These companies are supported by strong fundamentals and operate in sectors benefiting from durable, long-term demand trends. With solid business models and favourable growth prospects, these stocks are well-positioned to outperform the broader Canadian market.
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TSX stock #1: MDA Space
The global space economy is witnessing significant investment and strong growth, supported by increasing demand for Earth observation capabilities, defence applications, and communications infrastructure. As space is now a strategic priority for government and private sector companies, firms operating in this industry are likely to deliver solid returns.
In Canada, MDA Space (TSX:MDA) stands out as a significant player in the space ecosystem. The space technology company is well-positioned to capitalize on government spending on defence and space-related infrastructure. Its operations span satellite systems, geointelligence solutions, and advanced robotics, all of which play a critical role in enabling modern communications, surveillance, and mission-critical operations.
Reflecting favourable demand conditions and strong growth prospects, MDA Space’s stock has appreciated significantly. Moreover, this upward momentum will likely be sustained, supported by solid underlying fundamentals and the company’s robust order visibility and expansion pipeline.
As of fiscal 2025, MDA Space reported a backlog of $4 billion, providing a solid foundation for future revenue. In addition, the company’s $40 billion growth pipeline underscores substantial long-term opportunity. This pipeline is diversified across government and commercial clients and spans multiple geographies.
Overall, with demand for space infrastructure and defence capabilities continuing to accelerate, MDA Space is well-positioned to capitalize on favourable industry dynamics and deliver sustained, long-term growth.
TSX stock #2: Celestica
Celestica (TSX:CLS) could be a compelling addition to a TFSA portfolio, supported by its strong position in data centre infrastructure and advanced technology solutions. These sectors are attracting significant capital as hyperscale cloud providers accelerate investments to expand artificial intelligence (AI) capabilities.
Over the past three years, the company’s shares have delivered substantial gains, driven by robust demand for high-performance networking equipment. In particular, Celestica has benefited from scaling production of 800G networking switches for major hyperscale customers. As demand for high-speed connectivity continues to grow, the company retains meaningful upside potential. Industry expectations point to increased hyperscaler spending on AI infrastructure in 2026 and extending beyond, creating a supportive backdrop for suppliers of critical hardware and systems.
Celestica continues to capitalize on demand for its customized hardware platforms and integrated solutions. Management anticipates strengthening business momentum, with revenue growth accelerating in 2026. Looking further ahead to 2027, demand is expected to remain solid, driven by ongoing AI and machine learning deployments among hyperscalers and digital-native enterprises. The communications segment is forecasted to deliver strong growth, supported by production ramps across multiple 800G programs.
Beyond the near term, the company’s pipeline of opportunities remains robust and could support continued expansion. With global AI infrastructure spending on the rise, Celestica appears well-positioned to sustain growth and deliver attractive long-term returns.
