Written by Amy Legate-Wolfe at The Motley Fool Canada
Finding the Right Growth Stock
Canadians looking for growth stocks poised for significant gains in 2026 should focus on businesses showing strong demand, increasing cash flow, and potential catalysts visible in quarterly reports. If management provides optimistic guidance with room for surprises, it’s an added advantage. Evaluating valuation is crucial; if stock prices reflect perfection, even good performance can lead to disappointment. A solid competitive advantage is also essential.
Shopify’s Progress
Shopify (TSX:SHOP) serves as the commerce platform for millions, ranging from novice entrepreneurs to established global brands. The company generates revenue through subscriptions and a variety of merchant services, including payment solutions. Throughout the past year, Shopify consistently captured more e-commerce market share while enhancing tools for sellers across various channels.
Recent Achievements and Future Outlook
On February 11, 2026, Shopify announced impressive results, highlighting that growth stocks aren’t immune to challenges. The company reported $11.6 billion in revenue and $2 billion in free cash flow for 2025, alongside a $2 billion share buyback program. For Q4, it achieved a 31% year-over-year revenue increase to $3.7 billion, with free cash flow hitting $715 million and gross merchant value (GMV) reaching approximately $123.8 billion.
Challenges Ahead
Looking ahead to 2026, Shopify’s strategy must balance high growth and disciplined cash management. The Q1 2026 guidance anticipates revenue growth in the low-thirties percentage range, with free cash flow margins in the low-to-mid teens as it invests in AI advancements. However, there is a risk of margin fluctuations while pursuing new opportunities and potential consumer spending slowdowns impacting merchants first.
Celestica’s Niche
Celestica (TSX:CLS) may not be a flashy name, which contributes to its unique appeal. The company develops and provides hardware and manufacturing solutions for data centers, cloud infrastructure, and complex systems. As hyperscalers expand their capacities, Celestica has the potential to secure larger contracts, increase production, and boost profit margins, aligning its growth with rising AI investments.
Confidence in Growth Projections
Celestica’s recent performance centered around the demand for AI-related data center infrastructure. In late January 2026, it reported Q4 2025 revenue of $3.65 billion and non-GAAP adjusted earnings per share (EPS) of $1.89, exceeding its guidance. For the full year, revenues reached $12.4 billion, marking a 28% increase, and adjusted EPS climbed 56% year over year. Looking forward, it raised its 2026 targets to $17 billion in revenue and an adjusted EPS of $8.75, illustrating confidence as client spending on AI infrastructure continues.
Investment Considerations
For Canadians considering growth investments in 2026, both Shopify and Celestica present opportunities, albeit with inherent risks. Shopify is known for its long-term growth potential and strong cash flow but comes at a premium, facing scrutiny over margins. Celestica offers a direct link to AI spending with raised outlooks, but operates within a cyclical environment where demand can fluctuate rapidly. Investors should be prepared for potential volatility if pursuing significant growth in these stocks.
