3 Top Information Technology Sector Stocks for Canadian Investors in 2025
Canadian tech stocks are off to a strong start this year. As of Valentine's Day 2025, the IT sector is outperforming the broader market year-to-date, 13%-plus versus 3.1%-plus. Furthermore, it has risen 15.1%-plus in the last 30 days, despite tariff concerns.
Celestica (TSX:CLS), Canada's artificial intelligence king, is up 41.2%-plus thus far in 2025. However, if you find the AI stock expensive at $187.37 per share, small-cap stocks Coveo Solutions (TSX:CVO) and Telesat Corporation (TSX:TSAT) are viable alternatives.
Celestica is a standout because of the AI market's growth potential. This $21.8 billion company focusing on high-demand connectivity and cloud solutions has established a solid position in the cloud computing and data centre infrastructure market. The strongest attractions to growth investors are its profitability and low debt level. CLS' overall return in three years is 1,126.2%-plus.
In 2024, revenue and net earnings climbed 21% year-over-year to US$9.7 billion, while net earnings jumped 75% to US$428 million compared to 2023. 'We are pleased with the company's strong performance in the fourth quarter and solid finish to 2024,' said Rob Mionis, President and CEO of Celestica.
Is the future for Celestica looking good? Mionis notes the robust current demand environment for data centre hardware. 'We believe the positive momentum we are experiencing will continue beyond this year and into 2026,' he added. Market analysts' average 12-month price target is $222.4 (a 19%-plus potential upside).
Coveo Solutions is a screaming buy because of its growing business momentum and the increasing adoption of its Search & AI-Relevance platform among large enterprises. The $721 million company is establishing a commanding position in generative AI and commerce because of the composable AI search and generative experience platform.
In Q3 fiscal 2025 (three months ended December 31, 2024), total revenue rose 8% to US$34 million, while net income was US$4 million compared to the US$6.2 million net loss in Q3 fiscal 2024. Its Chairman and CEO, Louis Têtu, believes 2025 is an inflection point as enterprises move from experimentation to adoption.
'Our third quarter is validation that we are tracking well on accelerating our revenue growth in the coming quarters,' Têtu added. CVO trades at $7.52 per share (up 17.9%-plus year-to-date).
Telesat has been among the steadiest performers since 2024. At $30.53 per share, the year-to-trailing one-year price return is 126.2%-plus, while the year-to-date gain is 29.2%-plus. This $429 million global satellite operator boasts a Low Earth Orbit (LEO) network, its highly compelling growth catalyst.
Besides LEO, Telesat has a Geostationary (GEO) satellite fleet that serves broadcast, corporate, government, and telecom customers globally. Telesat Teleports, which connects Earth and Space, provides advanced teleport services and access to the global satellite fleet.
In Q3 2024, net income reached $67.8 million compared to the net loss of $3.5 million in Q3 2023. Dan Goldberg, President and CEO of Telesat, revealed that funding arrangements with the federal government and Quebec have been finalized. 'Telesat Lightspeed will revolutionize broadband connectivity for enterprise and government users,' he said.
Celestica is the top draw in TSX's information technology sector. However, price-friendly Coveo Solutions and Telesat are the next-best choices for Canadian investors.
The post 3 Top Information Technology Sector Stocks for Canadian Investors in 2025 appeared first on The Motley Fool Canada.
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