The Tax-Free Savings Account (TFSA) is arguably one of the most powerful tools for long-term wealth creation in Canada. With tax-free growth and withdrawals, and contribution room that increases annually, it offers a perfect environment for compounding gains—especially when it comes to growth and income-generating stocks.
That said, not every stock deserves an immediate spot in your TFSA. Some promising names, especially in the tech sector, may look attractive on the surface but require a more strategic entry point. Here are three Canadian tech stocks that I’m keeping a close eye on—but waiting to buy at the right time and price.
Also Read: AI tech stocks Canada
- Constellation Software (TSX:CSU)
Constellation Software has built an outstanding track record by acquiring niche software businesses and growing them steadily. Its acquisition strategy is highly repeatable, its cash conversion remains strong, and it has consistently delivered reliable revenue growth.
In the latest quarter, revenue rose 15% year over year, bolstered by recent acquisitions. The company now generates $10.7 billion in annual revenue and boasts strong cash flows.
But here’s the catch: Valuation is rich. The stock is trading at a trailing P/E of over 100, with a forward P/E around 27, and a P/S ratio of 6. Its dividend is minimal at just 0.13%. With net income declining recently and the stock coming off all-time highs, it’s best to wait for a more favorable valuation before jumping in.
Also Read: Top Canadian tech AI stocks
- Celestica (TSX:CLS)
Celestica has emerged as a key player in the AI revolution. The company provides behind-the-scenes hardware manufacturing and supply-chain solutions, especially for data centers. Its services are crucial for supporting the infrastructure needed for AI chips and systems.
Business is booming. Celestica reported US$10.6 billion in trailing revenue, a 21% year-over-year increase in its latest quarter, and rising adjusted earnings. It even raised its guidance for 2025, which shows management’s confidence in continued growth.
However, like CSU, valuation is a concern. The stock trades at a trailing P/E of 55.7 and a forward P/E of 38.5. Add to that its cyclical nature—which ties results to broader economic factors like tariffs, capital expenditure, and tech demand—and there’s room for volatility. Shares have surged 400% in the past year, so much of the anticipated growth may already be baked in. That said, if margins keep improving and AI demand holds steady, Celestica could become a compelling long-term play—at a better price.
- BlackBerry (TSX:BB)
BlackBerry is still in the midst of a major transformation, shifting away from its legacy smartphone business to focus on software, secure communications, and its QNX platform for safety-critical systems. QNX in particular stands out with gross margins of 81%, and overall software operations are beginning to show promise.
Still, investors remain cautious. The company has a relatively small $3.6 billion market cap and $533 million in trailing revenue. It trades at a P/S ratio around 5 and a forward P/E of 44, which is steep for a business still proving its turnaround.
The key upside potential lies in scaling software revenue and growing annual recurring revenue. But until we see more consistent profitability and stronger cash flow, BlackBerry remains a high-risk, high-reward pick. It’s worth monitoring, but not quite ready for prime time in a TFSA.
All three of these tech stocks—Constellation Software, Celestica, and BlackBerry—have solid long-term potential. But at current valuations or given ongoing business uncertainties, they aren’t quite ripe for inclusion in my TFSA just yet. I’ll be watching for better entry points, improved financials, or shifts in market conditions before making a move.
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