The Top Canadian Tech Stocks to Buy in February 2025

Key takeaways

Canada’s tech sector offers diverse opportunities: From e-commerce giants like Shopify to supply chain innovators like Kinaxis and Descartes, Canadian tech stocks provide exposure to multiple high-growth industries.

Recurring revenue models drive stability: Many of these companies, including Constellation Software and Lightspeed, rely on subscription-based and SaaS models, ensuring consistent cash flow and long-term growth potential.

Innovation and acquisitions fuel expansion: Whether through AI-driven logistics, cloud-based commerce, or strategic acquisitions, these companies continue to evolve, making them strong contenders in the tech landscape.

3 stocks I like better than the ones on this list.

In the last half decade, Canada’s technology sector has experienced annual returns nearly reaching 20%. This figure is derived from XIT, the TSX Capped Information Technology Index ETF.

This is despite a massive correction in late 2021 and 2022 that saw many top Canadian tech stocks, along with the ETF XIT, take 50% or greater hits to share prices.

This near 20% annualized growth would have turned a $10,000 investment into nearly $25,000 in just half a decade.

Yet many investors head south of the border when looking for technology stocks. After all, Canada is a resource heavy nation with nothing more than telecoms and banks, right?

Unfortunately, investors who have this mentality is wrong. Some of the best technology stocks on the planet come from Canada, and I’m going to be going over them in this article.

Lets get right into it.

Cloud-based point-of-sale and payments provider

Lightspeed Commerce (TSE:LSPD)

Lightspeed Commerce offers cloud-based point-of-sale (POS) and e-commerce solutions for retailers and restaurants. The company helps businesses manage payments, inventory, and analytics across multiple locations. With operations in over 100 countries, Lightspeed is focused on scaling its platform to serve small and mid-sized businesses globally.

P/E:

5 Yr Revenue Growth: 63.7%

5 Yr Earnings Growth: -%

5 Yr Dividend Growth: -%

Yield: -%

  • Strong growth in digital payments and omnichannel retail solutions.
  • Expanding international footprint with increasing adoption in Europe and North America.
  • Strategic acquisitions have strengthened its ecosystem and product offerings.
  • Subscription-based model provides recurring revenue, adding stability.
  • Positioned to benefit from the long-term shift to cloud-based commerce.
  • Strong brand recognition in the retail and hospitality sectors.
  • E-commerce Growth: Lightspeed’s platform helps small businesses compete in the digital era.
  • Payments Expansion: The company continues integrating payment processing to drive higher margins.
  • Macroeconomic Conditions: Consumer spending trends impact merchant adoption.
  • Mergers & Acquisitions: More strategic acquisitions could accelerate market penetration.
  • Competition from Shopify & Square: Larger players could limit growth.
  • Economic Slowdowns: Small businesses are sensitive to downturns.
  • Integration Challenges: Acquisitions need to be successfully integrated.
  • Profitability Concerns: The company is still working toward sustained profitability.

AI-driven supply chain management software

Kinaxis (TSE:KXS)

Kinaxis provides AI-powered supply chain and logistics software to large enterprises. Its flagship product, RapidResponse, helps businesses manage inventory, forecast demand, and optimize logistics in real-time. Major global corporations, including automakers and pharmaceutical firms, rely on Kinaxis to improve supply chain efficiency.

P/E: 185.3

5 Yr Revenue Growth: 24.2%

5 Yr Earnings Growth: -7.6%

5 Yr Dividend Growth: -%

Yield: -%

  • Market leader in AI-driven supply chain solutions.
  • Global enterprise clients provide stable, long-term revenue.
  • Recurring revenue model through software-as-a-service (SaaS) subscriptions.
  • Strong tailwinds from companies seeking to improve supply chain resilience.
  • Expanding partnerships with Fortune 500 companies enhance credibility.
  • Increasing adoption of AI-driven logistics solutions provides future growth potential.
  • AI in Supply Chains: Businesses are integrating AI to predict and solve logistics challenges.
  • Reshoring & Manufacturing Shifts: Companies reducing reliance on overseas suppliers could boost demand.
  • Enterprise SaaS Growth: More businesses are transitioning to cloud-based supply chain solutions.
  • New Industry Penetration: Expanding beyond automotive and pharma could open new revenue streams.
  • Enterprise Sales Cycles: Long decision-making processes can delay revenue growth.
  • Competition from Global Giants: Larger software firms like SAP and Oracle compete in this space.
  • Economic Slowdowns: Recessionary periods may delay enterprise software investments.
  • Valuation Concerns: As a high-growth SaaS stock, Kinaxis trades at a premium valuation.

Global logistics and supply chain software provider

Descartes Systems (TSE:DSG)

Descartes specializes in cloud-based logistics and supply chain management software, helping businesses optimize shipping, transportation, and trade compliance. The company’s solutions are used by freight carriers, logistics firms, and e-commerce companies to improve efficiency in global trade.

P/E: 79.0

5 Yr Revenue Growth: 16.6%

5 Yr Earnings Growth: 28.2%

5 Yr Dividend Growth: -%

Yield: -%

  • Leading provider of logistics technology in a world increasingly dependent on efficient supply chains.
  • Strong recurring revenue from subscription-based SaaS model.
  • Growing e-commerce and global trade trends drive demand for its solutions.
  • Highly profitable and consistently generates free cash flow.
  • Expanding customer base across industries, including retail and manufacturing.
  • Mergers and acquisitions continue to strengthen its market position.
  • Global Supply Chain Disruptions: Companies investing more in logistics tech to avoid delays.
  • E-commerce Growth: More online shopping means greater demand for efficient shipping software.
  • AI & Automation: Descartes is integrating AI for smarter logistics decision-making.
  • Acquisition Strategy: Future deals could expand its technology offerings.
  • Macroeconomic Pressures: Recessions or slowdowns in global trade could impact demand.
  • Competition from Tech Giants: Larger software firms may enter the space.
  • Acquisition Integration Risks: M&A activity must deliver expected synergies.
  • Foreign Exchange Fluctuations: Global operations expose it to currency volatility.

Serial acquirer of niche software businesses

Constellation Software (TSE:CSU)

Constellation Software specializes in acquiring and managing vertical market software companies—businesses that provide industry-specific solutions for niche markets like healthcare, public services, and finance. The company has a strong track record of acquiring smaller software firms and scaling them efficiently.

P/E: 122.9

5 Yr Revenue Growth: 23.4%

5 Yr Earnings Growth: 9.2%

5 Yr Dividend Growth: 15.8%

Yield: 0.1%

  • Proven ability to acquire and integrate software companies profitably.
  • Strong free cash flow and consistent revenue growth.
  • Diversified across multiple industries, reducing sector-specific risks.
  • Leadership team has a disciplined capital allocation approach.
  • High-margin, recurring revenue model provides long-term stability.
  • Well-positioned for continued acquisitions with significant cash reserves.
  • Acquisition Pipeline: Continued expansion through M&A drives long-term growth.
  • Software-as-a-Service (SaaS) Evolution: Transitioning legacy software firms to cloud-based models.
  • New Market Expansion: Entering international markets could accelerate revenue.
  • Cash Flow Utilization: How the company reinvests capital will be key to future growth.
  • Valuation Premium: Investors pay a high price for CSU’s consistent performance.
  • Integration Risks: M&A-heavy strategies require seamless execution.
  • Economic Downturns: Slower business spending could impact acquisitions.
  • Competition for Deals: Rising valuations in tech could make future acquisitions more expensive.

Leading global e-commerce platform

Shopify (TSE:SHOP)

Shopify is Canada’s most well-known tech company, offering an all-in-one platform that allows businesses to create and scale online stores. The company provides payment processing, marketing tools, and fulfillment services, making it a dominant player in global e-commerce.

P/E: 105.6

5 Yr Revenue Growth: 46.9%

5 Yr Earnings Growth: -%

5 Yr Dividend Growth: -%

Yield: -%

  • Industry leader in e-commerce, benefiting from long-term digital shopping trends.
  • Strong ecosystem, including Shopify Payments and fulfillment services, drives recurring revenue.
  • Constant innovation, including AI-powered tools, enhances merchant success.
  • International expansion provides further growth opportunities.
  • Growing partnerships with major platforms like Amazon and Google improve merchant reach.
  • Solid financial position after restructuring and focusing on profitability.
  • AI in E-Commerce: Shopify is integrating AI tools to help merchants optimize sales.
  • Subscription Growth: Expanding Shopify Plus and enterprise offerings increases high-value customers.
  • Global E-Commerce Expansion: More businesses moving online worldwide.
  • Fulfillment & Logistics: Strengthening its supply chain solutions to compete with Amazon.
  • Macroeconomic Slowdowns: Consumer spending downturns could impact merchant sales.
  • Competition from Amazon & Wix: Larger competitors continue to innovate.
  • Profitability Concerns: High R&D and expansion costs need careful management.
  • Regulatory Risks: Data privacy laws and payment processing regulations may impact operations.

Hardware manufacturer with AI and cloud integration

Celestica (TSE:CLS)

Celestica is a global electronics manufacturing and supply chain solutions provider. They help major tech companies design and produce hardware for AI infrastructure, including servers, networking equipment, and storage solutions. As AI adoption accelerates, Celestica’s role in supporting AI-driven hardware production is critical for growth.

P/E: – 40

5 Yr Revenue Growth: 4.6%

5 Yr Earnings Growth: 24.7%

5 Yr Dividend Growth: N/A

Yield: N/A

  • Expanding footprint in AI-related hardware manufacturing.
  • Partnerships with major cloud and data center companies.
  • Diversified business model, covering multiple tech and industrial sectors.
  • Focused on improving margins through automation and AI-driven manufacturing processes.
  • Strong revenue growth from cloud computing infrastructure demand.
  • Positioned to benefit from AI-driven increases in semiconductor demand.
  • AI Hardware Demand: Increasing need for data center equipment and AI infrastructure boosts Celestica’s business.
  • Supply Chain Management: Celestica’s ability to maintain efficient supply chains will determine profitability.
  • Partnerships with Tech Giants: Collaborations with AI and cloud leaders will impact revenue growth.
  • Automation Initiatives: The company’s use of AI in manufacturing to reduce costs and improve product quality is key to staying competitive.
  • Supply Chain Disruptions: Global semiconductor or material shortages could hamper Celestica’s ability to meet demand.
  • Technological Obsolescence: AI hardware evolves quickly, and Celestica must keep up with innovation to remain relevant.
  • Margin Pressures: Rising input costs and competitive pricing could hurt profitability.
  • Economic Slowdowns: A tech spending downturn could impact orders for AI infrastructure hardware.

Tech stocks just aren’t as prevalent on the Toronto Stock Exchange

The I.T. sector accounts for nearly a quarter of the S&P 500.

However, Canadian stocks in the technology sector accounted for only a single-digit weighting of the TSX Index, Canada’s main stock index.

We simply don’t have enough technology options in Canada, as our economy is primarily focused on “real economy” stocks like utilities, railroads, telecoms, and oil producers.

As a result, many investors head south of the border to gain exposure to technology. However, they’d have missed out on the exceptional returns from companies like Shopify, Constellation, Celestica, and Descartes.

The lack of Canadian tech companies on the TSX has hampered the overall performance of the Canadian markets.

The good news? The lack of performance can lead to a lack of awareness. Thus, comes opportunity. Even though the TSX’s I.T. sector is small, plenty of suitable investments exist.

The U.S. has its FAANG (Facebook (now Meta Platforms), Amazon, Apple, Netflix, Alphabet (Google)) stocks, but did you know Canada has its acronym of tech all-stars?

Ryan Modesto, chief executive of 5i Research, coined the acronym “DOCKS” to reference Canada’s own FAANG stocks.

The five stocks include

  • Descartes Systems (DSG)
  • OpenText (OTEX)
  • Constellation Software (CSU)
  • Kinaxis (KXS)
  • Shopify (SHOP)

Although OpenText has not been the best performer as of late due to some untimely acquisitions, you can’t win them all. The other 4 have been exceptional, benefitting from supply chain advancements, AI developments, and the rapid move to e-commerce in terms of spending.

Are higher interest rates bad for tech stocks?

One of the main reasons technology stocks faced such a significant correction in late 2021 and 2022 was because of the threat of higher interest rates.

As rates go up, it ultimately costs companies more money to borrow. As a result, weighted average costs of capital go up, which can reduce the amount you theoretically should pay for a company. This is especially true in the technology sector as it often contains fast-growing, unprofitable companies.

As a result, many price targets, recommendations, and growth estimates were slashed on popular technology companies, and the NASDAQ officially entered a bear market with losses exceeding 25% in 2022.

Even tech giants like Apple (AAPL), Microsoft (MSFT), and semiconductor company Nvidia (NVDA) saw massive decreases in price.

However, fast forward to 2025 and those losses are all but gone, showing you that money is best invested in the markets for the long-term, and not in an attempt to time short-term fluctuations in price.

So in short, yes, interest rates do impact technology stocks. But if your time horizon is long, they should be a cornerstone of your portfolio.