1 stocks with a lot of potential that too many Canadians overlook

Volatility is back on Wall and Bay Street, with the TSX Index down almost 2% in one day. Just when you thought the stocks would melt ahead of a Santa rally, they took a little steep turnaround. And while there’s plenty to worry about, especially as the odds of a Fed rate cut in December get smaller (maybe lower than 50/50), I’d say it’s the long term that actually counts for those young TFSA investors looking to build generational wealth. A little volatility should undoubtedly have you motivated to pick up some stocks on your radar.

In this piece, I share two high-potential stocks that Canadian investors may overlook. And while they could take a bigger hit on the chin if the selloff worsens, I wouldn’t be afraid to continue averaging into a selloff, especially since the growth prospects and the long-term story itself haven’t really changed in the past few turbulent sessions.

The only thing that has likely changed is the price and investor optimism, which appears to have been disrupted by the excessive spending on AI by a few big tech companies. Either way, there’s no need to take the plunge and dive into technical plays that are already almost 10% away from their peak. Although this may be the place where the biggest bargains lie.

Celestica

Celestica (TSX:CLS) shares fell more than 12% during Thursday’s brutal session, and while someIf we want to take profits, I see an opportunity to nibble away very gradually. Of course, buying dips shouldn’t come with the expectation of a quick reward in the short term. If this is the big fear for AI growth or the AI ​​spending-driven downturn we’ve been waiting for, you may want to keep your powder dry as you gradually buy into the dip, which could last for quite some time. It’s hard to say what the next move in the Canadian AI game will be.

Regardless, Celestica is still a popular AI enabler that will benefit greatly from the AI ​​revolution. With all the tools to help big tech achieve its AI ambitions, I wouldn’t be so quick to write off the name. Of course, if you’ve made a good amount of money recently, it only makes sense to take a few chips off the table while you grow up.

Be that as it may, the latest one-day decline seems excessive, and while a 47.7 times lower price-to-earnings (P/E) ratio is hardly a bargain, the growth profile could make such a premium worthwhile. If the stock fell closer to $340 per share, I would become more interested. Until then, it’s worth keeping a close eye on, especially if this AI volatility leads to something much nastier.

Ultimately, a bit of selling in the AI ​​theme is healthy because it takes the froth off and shifts expectations to the right place. For Celestica, it’s more about the market mood than anything else, which is why I’m such a fan of the name, should it make further inroads, through the end of the year, and maybe into next year.