Table of Contents

Market Context
What Happened
Why It Matters
Sector Breakdown
Risks to Watch
What to Watch Next
Final Outlook

Market Context

Canadian growth stocks arrive at the beginning of September in a more challenged position than at any point since the TSX’s 2026 bull market began in earnest. The combination of a hawkish Federal Reserve chair, an escalating Canada-U.S. trade war, and U.S. hyperscaler technology headwinds has created a three-directional headwind for TSX growth names that was absent through most of H1 2026. Shopify (TSX:SHOP) — Canada’s flagship growth stock and the most closely watched individual name on the TSX — closed August at CA$204.27, having shed 3.8% on August 31 and sitting meaningfully below what technical analysts identify as key resistance levels at CA$172 and CA$183 on any meaningful recovery. Constellation Software (TSX:CSU) declined 0.8% on the same session. These moves are not company-specific fundamental events — they reflect the macro repricing of growth equity multiples in a world where the Fed may hike rates again and bond yields are rising.

The analytical context requires understanding what made Canadian growth stocks outperform through much of 2026. Shopify’s Spring 2026 product rollout, the Shopline legal settlement, and the platform’s AI-integrated merchant tools drove a sustained re-rating that peaked near the CA$220 range. Constellation Software’s 20% revenue growth and 170% net income expansion in Q1 2026 validated its acquisition-compounding model at scale. BlackBerry’s (TSX:BB) physical AI transformation — from legacy smartphone brand to QNX-powered embedded software franchise — generated one of the most dramatic fundamental re-ratings in Canadian technology history, with the stock surging more than 100% from its June lows following Q1 fiscal 2027 earnings that showed 26% revenue growth and the company’s first cash-positive fiscal Q1 in nine years.

What has changed in August is the macro environment rather than the company fundamentals. Fed Chair Warsh’s Jackson Hole speech on August 28 moved September rate hike odds to 57.5%. Rising bond yields raise the discount rate applied to long-duration growth equity cash flows, compressing forward multiples even when earnings growth remains strong. The Canada-U.S. trade war escalation — with Section 338 tariffs effective August 22 and Canadian retaliatory tariffs of up to 50% effective September 8 — creates both direct business risk for companies with significant cross-border operations and sentiment risk from the deteriorating bilateral relationship.

What Happened

On August 31, Shopify fell CA$8.15, or 3.8%, to CA$204.27, making it among the worst performers on the TSX benchmark index for the session. Constellation Software declined 0.8%. Both declines tracked losses among U.S. hyperscalers, where AI infrastructure spending concerns and Warsh’s hawkish Jackson Hole speech combined to create a risk-off mood across growth equity names. BlackBerry (TSX:BB) is approaching its Q2 fiscal 2028 earnings date of September 24, which will be the next major test of whether the company’s physical AI transformation can sustain the fundamental momentum that drove its extraordinary June–July rally. Separately, Teck Resources (TSX:TECK.B) — which sits at the intersection of growth and value investing through its planned merger with Anglo American — carried a year-to-date gain of approximately 33.6% with shares near CA$88.17, reflecting sustained institutional conviction in the strategic rationale even as the broader materials sector faces headwinds.

Why It Matters

Growth Multiples Are Rate-Sensitive — and Warsh Made Rates More Uncertain

The specific mechanism by which Warsh’s Jackson Hole speech affected Canadian growth stocks is the discount rate applied to future earnings. Growth stocks — companies whose value is concentrated in earnings that are years in the future rather than in immediate cash flow — are more sensitive to changes in discount rates than value stocks or income stocks. When bond yields rise because a rate hike becomes more probable, the present value of a company’s 2028 or 2029 earnings stream falls, compressing the stock’s fair value. Shopify’s premium multiple — one of the highest on the TSX by conventional measures — means it faces proportionally larger fair value compression than a bank or utility when discount rates rise. That mathematical reality is why Shopify declined 3.8% on a day driven by a Fed speech rather than by any Shopify-specific negative development.

BlackBerry’s September 24 Earnings Are a Critical Near-Term Anchor

BlackBerry’s September 24 earnings date represents the most important individual company-specific catalyst for Canadian growth stocks in September. The market has priced in significant improvement following Q1’s extraordinary results — 26% revenue growth, 144% adjusted EBITDA growth, first cash-positive fiscal Q1 in nine years. Q2 results will test whether those metrics are sustainable or whether Q1 was a one-quarter inflection point that normalises in subsequent periods. Analysts from Stifel, CIBC, Raymond James, Canaccord, and TD Securities all raised price targets following Q1, and each of those firms is watching the September 24 report as a validation event.

Sector Breakdown

The Canadian growth stock landscape heading into September divides into two groups with meaningfully different near-term profiles. Platform software companies with AI-enhanced tools — Shopify and BlackBerry — are facing multiple compression from the hawkish Fed environment but maintain genuine earnings growth stories that should anchor their valuations once the rate uncertainty resolves. Shopify at CA$204 is approaching technical support levels that analysts view as significant; investors are watching whether the stock finds support here or tests the CA$172 level identified in market analysis. Constellation Software remains the most consistent compounder — its vertical market software acquisition model generates earnings growth that is largely independent of the macro environment — though its premium multiple also faces compression in a rising discount rate environment. AtkinsRéalis (TSX:ATRL) — with its CA$5.6 billion nuclear backlog and Turkey CANDU discussions — represents a different growth profile: industrial engineering with government contract visibility rather than consumer or enterprise software. Teck Resources’ 33.6% YTD gain reflects growth at the intersection of critical minerals demand and strategic M&A optionality.

Risks to Watch

Shopify’s primary near-term risk is continued multiple compression from rising U.S. bond yields if the Fed confirms a September hike on September 16. A confirmed 25-basis-point Fed hike would likely trigger another round of growth equity multiple compression, potentially pushing Shopify below the CA$200 support level that markets are watching closely. Canada’s retaliatory tariffs effective September 8 introduce a specific risk for Shopify’s merchant base — many Canadian merchants on the Shopify platform sell cross-border to U.S. consumers, and higher tariff barriers on Canadian goods could reduce volumes and gross merchandise value. BlackBerry’s September 24 earnings carry execution risk: the stock’s current valuation reflects expectations of continued strong performance, and any revenue miss would likely be met with a sharp price correction. Constellation Software’s acquisition pace — its primary growth engine — could slow if the trade environment makes cross-border deal-making more complex and expensive.

Also Read: Stock investment Canada for beginners

What to Watch Next

BlackBerry’s September 24 earnings are the most important single company-specific event for Canadian growth investors in September. The Fed’s September 16 decision and dot plot will define the discount rate environment for growth equities for Q4 2026. Shopify’s price action around the CA$172 and CA$183 technical levels will be closely watched by momentum and value investors alike. Canada’s retaliatory tariffs effective September 8 and any immediate business response from major Canadian technology companies will be important signals. Constellation Software’s Q3 acquisition activity and any earnings guidance updates will test whether the compounding model continues to deliver.

Final Outlook

Canadian growth stocks enter September in a more challenged position than they have faced since the TSX’s five-month rally began, but the underlying business fundamentals — Shopify’s merchant platform stickiness, BlackBerry’s physical AI franchise, Constellation Software’s compounding acquisition model — remain intact. The headwinds are macro rather than fundamental: a hawkish Fed, rising bond yields, and trade war uncertainty are compressing multiples on companies whose earnings stories have not deteriorated.

For growth-oriented investors with multi-year horizons, these multiple compression events historically represent opportunities rather than permanent impairments — provided the earnings growth thesis holds. The next two months will clarify whether it does, through BlackBerry’s September 24 earnings and Shopify’s next quarterly report.

Verdict: Neutral on Canadian growth stocks at current multiple levels pending resolution of the September 16 Fed decision and BlackBerry’s September 24 earnings. Selective positions in Constellation Software’s compounding model and BlackBerry into its earnings catalyst may be appropriate for long-horizon investors; new Shopify positions should wait for technical support confirmation.