As 2025 ends, BMO Capital Markets highlights key Canadian technology stocks set to outperform in 2026. Analyst Thanos Moschopoulos emphasizes a market shift toward distinguishing AI leaders from laggards, favoring companies that pair leading AI capabilities with strong operational performance. This evolving view reveals promising opportunities across both large and small-cap technology firms.

Canadian Technology Leaders Drive Growth with AI Integration

Among large-cap stocks, Celestica (CLS) has achieved triple-digit returns for three consecutive years through 2025. Its role as a major supplier to hyperscalers including Google, Meta, and Amazon, specializing in custom silicon-based network switches and servers, positions it to capitalize on accelerating AI infrastructure spending. Currently trading at 25 times calendar year 2027 price-to-earnings (P/E), Celestica remains a compelling growth stock.

Shopify (SHOP) has overcome the challenges posed by U.S. trade policy changes, accelerating revenue growth and reaching record gross merchandise volume in 2025. The company maintains dominance in small- and medium-sized business markets while expanding into international and enterprise segments. Its diversified growth paths, including offline commerce, B2B expansion, and payment penetration, coupled with early leadership in agentic AI technologies, strengthen its competitive edge. Positive analyst upgrades from firms like Wells Fargo and BofA Securities reflect confidence in Shopify’s AI integration and growth potential.

Constellation Software (CSU) delivered steady mid-single-digit organic recurring revenue growth in 2025, despite stock derating due to AI concerns. Its decentralized structure and extensive vertical market footprint enable agile adaptation to AI-driven shifts. The third-quarter earnings report revealed lighter-than-expected revenue but exceeded EBITDA margin expectations, leading BMO to adjust its price target downward.

CGI (GIB.A) showed resilience with flat organic revenue and 9% year-over-year adjusted EPS growth in fiscal 2025. The company benefited from mergers and acquisitions, favorable foreign exchange rates, margin expansion, and share buybacks. With approximately 60% of revenue from government and financial services sectors, CGI’s investments in proprietary intellectual property and research and development bolster its strategy to manage AI transitions amid complex regulatory and cybersecurity demands. Fourth-quarter results outperformed expectations, with revenue of C$4.01 billion (+9.7% YoY) and adjusted EPS of C$2.13.

Small-Cap Innovators Propel Expansion Through AI and Contracts

Kinaxis (KXS) accelerated its annual recurring revenue growth to 17% and restored EBITDA margins to 25% in 2025. Trade uncertainties unexpectedly expanded its sales pipeline, while AI-powered agents facilitate usage-based upselling opportunities, broadening the customer base. Despite slightly below-forecast revenues, its third-quarter earnings per share of $0.93 surpassed analyst estimates.

MDA Space (MDA) reinforced its business fundamentals, securing major government contracts amid increased defense budgets and growing demand for low Earth orbit broadband. The company’s pipeline includes significant opportunities that could materially impact stock performance in 2026.

Lightspeed Commerce (LSPD), after a strategic review, sharpened focus on North American retail and European hospitality verticals. This pivot yielded early progress, with a 7% year-over-year increase in location adoption in key markets. Lightspeed’s platform supports supplier networks and regulatory compliance, enhancing competitiveness against larger peers.

Coveo (CVO) leveraged generative AI platforms to drive commerce and customer service solutions, expanding deal sizes and customer wins in 2025. Its partnership with SAP now integrates with the service cloud, unlocking wider market opportunities within SAP’s customer ecosystem.

Evertz Technologies (ET) continued to grow its software and services segment, comprising nearly half of total revenue in 2025. Operational discipline improved leverage and competitive positioning in media and broadcast, with stable free cash flow supporting both regular and special dividends.

These Canadian technology companies exemplify how strategic innovation and operational strength enable continued success amid the rapidly evolving AI landscape.

Technology: Market Outlook for 2026

BMO’s assessment reinforces that Canadian technology stocks, from large-cap leaders like Celestica, Shopify, Constellation Software, and CGI to small-cap names such as Kinaxis, MDA, Lightspeed, Coveo, and Evertz, are well positioned to capture growth driven by AI advancements and strategic government contracts. Investors should monitor these firms closely as the sector adapts to shifting geopolitical dynamics and trade policies. The interplay between AI integration and robust execution remains the cornerstone of value creation in Canadian technology for 2026 and beyond.