The Canadian benchmark index, the S&P/TSX Composite Index, reached a new record high yesterday and closed the day up 1%. Optimism about progress in peace negotiations between the United States and Iran has strengthened investor sentiment, helping lift equity markets. With this rally, the benchmark index is now up 9.8% year-to-date. Amid the improving market outlook, let’s look at two growth stocks that could deliver strong returns this year.
Growth stocks are companies with the potential to grow revenue and earnings at a pace well above the industry average, enabling them to generate superior long-term returns. Due to their strong growth prospects, these companies often trade at premium valuations. However, their rapidly evolving business models and higher market expectations can also make them more volatile and riskier investments. As a result, growth stocks are generally best suited for investors with a higher risk tolerance. Against this backdrop, here are my two top picks.
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Celestica
Celestica (TSX: CLS) has generated extraordinary returns of nearly 3,200% over the last three years, driven by its strong operational execution and growing exposure to the rapidly expanding artificial intelligence (AI) market. In its recently reported first-quarter results, the provider of data centre infrastructure and advanced technology solutions posted impressive revenue and adjusted earnings per share (EPS) growth of 53% and 80%, respectively. The strong performance was primarily fueled by robust demand from cloud and AI infrastructure customers within its Connectivity & Cloud Solutions (CCS) segment.
Meanwhile, the accelerating adoption of AI across industries continues to push hyperscalers to expand their infrastructure capacity, creating significant long-term growth opportunities for Celestica. To capitalize on this favourable trend, the company remains focused on launching new products and expanding its manufacturing capabilities. It recently announced plans to establish a manufacturing footprint at AllianceTexas in Fort Worth, Texas, which should enhance its ability to meet the growing global demand for next-generation data centre infrastructure and advanced technology solutions.
Supported by its strong first-quarter performance and improving growth outlook, Celestica’s management has raised its 2026 guidance. The company now expects revenue and adjusted EPS to grow by 53.2% and 67.8%, respectively, this year. Management has also projected even stronger performance in 2027, backed by improving demand visibility and additional program wins. Given its solid financial momentum and attractive long-term growth prospects, I believe Celestica remains well-positioned to continue delivering strong shareholder returns.
5N Plus
Another growth stock that I expect to outperform this year is 5N Plus (TSX: VNP), a manufacturer of specialty semiconductors and performance materials used across several high-growth industries and applications. The company has delivered an impressive 1,360% return over the last three years and is already up 155.5% year to date, reflecting strong investor confidence in its long-term growth potential.
I also believe the company’s financial momentum could continue, supported by strong demand for specialty semiconductors driven by structural growth trends in key end markets such as terrestrial renewable energy and space-based solar power. Thanks to its expertise in developing ultra-high-purity semiconductor compounds, 5N Plus appears well-positioned to benefit from these expanding opportunities.
Meanwhile, the company is increasing solar cell production capacity at AZUR SPACE Solar Power GmbH by 25% this year to meet rising customer demand. In addition, a US$18.1 million grant from the U.S. government could strengthen germanium recycling and refining capabilities at its St. George, Utah, facility. This investment should help reinforce supply chains for optics and solar germanium crystals while also creating new long-term growth opportunities for the company.
Given the supportive industry backdrop and its ongoing expansion initiatives, I expect 5N Plus to continue delivering strong financial growth, making the stock an attractive option for growth-oriented investors.
