It’s not every year you see Canada outpace America on the investing front, but 2025 has shaped up differently. The TSX Composite Index is up 28% so far this year — beating both the S&P 500 and even the tech-heavy Nasdaq Composite. 

The strength isn’t just a fluke. Jack Manley, global market strategist at J.P. Morgan Asset Management, attributes the recent gains to the underlying strength and resilience of Canadian equities — calling it “a very high-quality market.”

Solid corporate earnings reports and encouraging labor market data have propelled the Canadian exchange to a stellar performance so far this year.

“The TSX is cheaper on a price/earnings basis, whereas the S&P 500 sits at a historically elevated level,” he said. 

It also helps that U.S. markets have been anything but calm, with political turnover, tariff worries, and record fiscal deficits triggering a government shutdown and rattling investors.

Here are two of the top-performing Canadian stocks on the TSX. 

Shopify

Shopify (TSX: SHOP) has long been one of Canada’s biggest tech success stories, and 2025 has only strengthened that reputation. The stock is already up more than 46% this year as the company continues to cement its place in North American e-commerce. Today, more than 10% of all U.S. online shopping runs through Shopify merchants.

The numbers back up the momentum. Third-quarter revenue jumped 32% from last year, and operating income climbed 24%, to US$1.38 billion. Free cash flow margin came in at 19% — marking the ninth straight quarter of double-digit margins.

Holiday shopping has only amplified the trend. Shopify’s gross merchandise volume amounted to US$6.2 billion on Black Friday, up 25% from last year.

“With the strong results on Friday alone and considering Cyber Monday is typically a bigger selling day online, we suspect Shopify will blow through last year’s Cyber Week results,” said Truist analyst Terry Tillman. “Also, this type of well above 20% sales growth reported by Shopify will likely continue a multiyear trend of the Shopify merchant community growing easily over 2 times the overall e-commerce market during Cyber Week.”

Royal Bank of Canada

Royal Bank of Canada (TSX: RY) has long been one of the country’s most dependable blue-chip stocks. This isn’t surprising, given the bank’s stellar reputation. It ranked highest in customer satisfaction among the Big Five retail banks in 2025, according to J.D. Power — a title RBC has claimed five times in six years.

What helps Royal Bank stand out is how well-rounded the business is. The bank’s wide moat and diversified revenue streams have helped it remain resilient, especially with changing interest rates. 

The latest quarter underscored that resilience. The bank posted record third-quarter net income of $5.4 billion, up 21% year-over-year. Adjusted EPS also increased 18% from the same period last year, to $3.84. 

Analysts expect the positive trend to continue into the final quarter of the year. As a group, Canada’s big banks are projected to grow earnings between 12% and 24%, and RBC is widely expected to keep pace.

The bank’s healthy dividends make it an attractive option as well. Royal Bank bumped its quarterly payout by 4%, to $1.54, back in May, translating to a 2.87% yield on the current price.

The post TSX Is Beating Wall Street This Year, and Here Are Some of the Canadian Stocks Driving the Rally appeared first on The Motley Fool Canada.

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The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

If you’ve been watching U.S. stocks this year, you’ve probably felt like you were strapped into a rollercoaster ride. One month it’s tariff woes and recession fears, the next it’s AI euphoria pushing markets to new highs.

But lately, concerns about an overvalued market have been surfacing. 

While strong corporate earnings have caused Wall Street bulls to shrug off these fears, overvaluation metrics tell a different story. The only other time the U.S. stock market was this overvalued was during the dot-com bubble.

Take a look at one of the most common measures of market valuation. 

The Shiller cyclically adjusted price/earnings (CAPE) ratio — which divides prices by average inflation-adjusted earnings over the past decade — is hovering near 40, according to Morningstar. That’s higher than before the 1929 crash and just shy of its dot-com peak.

Some professional investors are concerned. During the Global Financial Leaders’ Investment Summit in Hong Kong, Goldman Sachs CEO David Solomon predicted a pullback in equity markets in the near future. 

“It’s likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months,” he said. 

For investors, it’s a good reminder to stick with steady, reliable names that can help smooth out the bumps when markets get choppy.

Barrick Mining

As investors worry about an overheated market, many have flocked toward safe-haven assets like gold. The precious metal has emerged as the best-performing asset so far in 2025, with prices rising over 64% year-to-date. In comparison, the S&P 500 index has risen about 17% so far this year. 

Riding this wave is Barrick Mining (TSX: ABX), which has turned into one of 2025’s breakout stars. The stock has risen 173% so far this year.

Barrick produced 829,000 ounces of gold in the third quarter of 2025, generating a record operating cash flow of $2.4 billion. The company’s free cash flow in the last quarter rose 274% quarter-over-quarter, to a record $1.5 billion. 

Shareholders are feeling the payoff, too. Thanks to its impressive performance driven by increased gold sales, lower total cash costs per ounce and higher realized gold prices, Barrick Mining increased its quarterly dividends by 25%, to $0.125 per share, translating to a 1.7% yield. Plus, the company paid a $0.05 performance dividend in the last quarter. 

The outlook gets even brighter from here. Barrick recently ended a dispute with the government of Mali over the use of the Loulo Gounkoto gold mine. If production restarts quickly, the mine could produce 670,000 ounces of gold as soon as 2026, which could result in $1.5 billion operating cash flow, according to analysts at BMO Capital Markets. 

Enbridge

Enbridge (TSX: ENB), North America’s largest energy delivery company, has long been a go-to investment for Canadians who love steady dividend income.

And with electricity demand climbing in the U.S. — driven by tech giants racing to build out AI infrastructure — Enbridge is in a pretty sweet spot. The company’s scale and reach make it one of the few players capable of keeping up with the continent’s growing appetite for power.

“Energy demand continues to grow in North America and beyond. Throughout North America, we have an abundant supply of natural resources. Enbridge is the only company with a large incumbent footprint positioned to deliver gas, liquids and renewable power to customers across the continent and to new markets,” Enbridge CEO Greg Ebel said in the Q3 earnings report.

A key part of the appeal for shareholders remains the company’s stable dividend track record. The company has increased its dividend payouts for 30 consecutive years, and it currently offers a 5.9% yield. 

The payout is expected to keep rising. Analysts forecast the annual dividend will grow to $4.17 per share by 2029.

The post Think U.S. Stocks Are Overvalued? Invest Smart and Buy These Canadian Ones Instead appeared first on The Motley Fool Canada.

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The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

U.S. stocks have been the clear leaders in the artificial intelligence (AI) race so far, with megacaps like Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT) and smaller private companies like OpenAI making waves globally.

AI-driven spending has been reaching record levels, and Canada isn’t sitting on the sidelines anymore. 

Last fiscal year, the government unveiled the “Canadian Sovereign AI Compute Strategy,” with plans to invest up to $2 billion over the next five years to expand its capabilities. 

A big part of that includes $700 million in new funding to build up Canada’s AI infrastructure. The plan is to capitalize on the country’s “clean energy, abundant land, and naturally cool climate” — all of which make it easier and more sustainable to operate large data centres.

Another billion is earmarked to build an extensive sovereign supercomputing infrastructure and a smaller computing facility. 

Those goals might sound bold, but Canada’s got the people to make it happen. With around 10% of the world’s top-tier AI researchers — the second-most across the world — Canadians are clearly getting serious about the global AI race.

Want to get in on the action? With everyone talking about “buying Canadian” these days, these two stocks might be a good place to start.

BCE

BCE (TSX: BCE) might be best known as Canada’s second-largest telecom giant — with about 28% of the market — and that sweet 5.4% dividend yield investors love. But lately, Bell’s been turning heads for something else entirely — its big bet on artificial intelligence.

The company recently rolled out Bell AI Fabric — a multibillion-dollar initiative to build the largest AI computing network in the country. Talk about going all in.

To make it happen, BCE is setting up six AI data centres across British Columbia — and it’s expecting that investment to pay off in a big way. Management projects about $700 million in AI-related revenue by 2025, with growth of roughly 24% to 29% per year over the next few years.

If things go according to plan, Bell’s AI business could be pulling in $1.5 billion in revenue by 2028. Not bad for a telecom company that’s already known for steady dividends.

Brookfield Infrastructure

Brookfield Infrastructure (TSX: BIP.UN) isn’t just another dividend darling — it’s also quietly positioning itself as a key player in the AI boom.

The company recently unveiled a $5 billion partnership with Bloom Energy (NYSE: BE) to roll out Bloom’s advanced fuel cell technology and power Brookfield’s growing network of AI “factories.” In simple terms, Brookfield’s making sure the AI world has the energy muscle it needs to keep running.

Brookfield’s making moves on multiple fronts. Last year, it teamed up with Microsoft, and it’s working closely with Google too, all as part of a plan to grow its earnings by about 25% a year through 2030. Basically, it’s betting big on AI infrastructure and long-term tech partnerships to keep the growth engine humming.

Still, the company hasn’t strayed from what it does best — delivering steady, reliable income. It aims to pay out between 60% and 70% of its cash flow as dividends. Brookfield currently pays $2.41 per share in dividends annually, translating to a 4.8% yield. And with 16 straight years of dividend growth, averaging 9% annually since 2008, it has built a strong record of consistency.

The post Canada’s AI Gold Rush Is Here — and These Companies Are at the Forefront  appeared first on The Motley Fool Canada.

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The Motley Fool recommends Alphabet, Brookfield Infrastructure Partners, and Microsoft. The Motley Fool has a disclosure policy.