TSX Is Beating Wall Street This Year, and Here Are Some of the Canadian Stocks Driving the Rally

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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More reading

• Here Are My Top 2 Tech Stocks to Buy Now
• 3 of the Best Canadian Tech Stocks Out There
• The Sole 2 Canadian Stocks to Hold Forever
• 3 of the Best TSX Stocks to Buy With $3,000 in December
• 1 No-Brainer Buy-and-Hold Canadian Stock

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