Growth stocks are companies with the potential to grow revenue and earnings faster than their industry peers, making them attractive to investors seeking above-average long-term returns. These businesses often operate in rapidly expanding sectors and typically trade at premium valuations due to their strong growth prospects. However, their higher valuations and evolving business models can also make them more volatile, making them better suited to investors with a higher risk tolerance.
Investing in growth stocks through a TFSA (Tax-Free Savings Account) can further enhance long-term returns by allowing any capital gains to grow tax-free. With that in mind, here are two high-growth stocks that I believe have the potential to generate attractive long-term returns.
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Celestica
Celestica (TSX: CLS) is a leading provider of critical data centre infrastructure that supports artificial intelligence (AI), cloud computing, hybrid cloud, and other advanced technologies. As enterprises move beyond pilot AI projects and integrate AI into their core operations, demand for high-performance computing infrastructure continues to rise. At the same time, governments and consumers are increasingly adopting AI-powered applications, prompting hyperscale cloud providers to expand their AI-ready data centre capacity. These trends create a strong long-term growth opportunity for Celestica.
To capitalize on this demand, the company continues to invest in new product development, expand strategic partnerships, and strengthen its manufacturing capabilities. It is also building a new production facility in Fort Worth, Texas, to increase capacity and support growing demand for next-generation data centre infrastructure and advanced technology solutions.
Reflecting this favourable backdrop, management expects revenue and adjusted earnings per share (EPS) to grow by 53.3% and 67.8%, respectively, this year. The management also expects its adjusted operating margin to expand by 60 basis points to 8.1%. Despite these impressive growth expectations, Celestica trades at a forward price-to-sales multiple of just 1.8 and a forward price-to-earnings multiple of 29.5. Given its robust growth outlook and reasonable valuation, I believe the stock is an excellent addition to a TFSA.
5N Plus
Another high-growth stock I believe is worth considering is 5N Plus (TSX: VNP), a leading producer of specialty semiconductors and performance materials for high-growth industries such as renewable energy, space, pharmaceuticals, medical imaging, and other industrial applications. The structural expansion of markets such as terrestrial renewable energy and space-based solar power is creating significant long-term growth opportunities for the company. With its expertise in manufacturing ultra-high-purity semiconductor materials, 5N Plus is well-positioned to benefit from these secular trends.
The company is also investing in expanding its production capabilities. This year, it expects to increase solar cell production capacity at its AZUR SPACE Solar Power GmbH facility by 25%. In addition, 5N Plus has secured a US$18.1 million grant from the U.S. government to enhance its germanium recycling and refining operations at its St. George, Utah, facility. This investment will strengthen its ability to meet the rising demand for germanium-based technologies across the United States.
Supporting its strong outlook, 5N Plus ended the first quarter with a backlog of $434.4 million, equivalent to approximately 336 days of annualized revenue — 68 days higher than a year ago. This healthy order book provides strong revenue visibility and reflects sustained demand across its core end markets. Backed by favourable industry trends, expanding production capacity, and strong customer demand, I believe 5N Plus is well-positioned to deliver attractive long-term returns.
