11:25 AM EDT, 03/21/2025 (MT Newswires) -- The S&P/TSX Info Tech is down 3% YTD, while the average stock in RBC's coverage has declined 9% in the same period, given uncertainty regarding tariffs and the broader macroeconomic environment.

Analyst Paul Treiber writes that the reduced investor sentiment is despite the majority of companies in RBC's coverage reporting healthy calendar fourth-quarter results.

"Of the 12 companies in our coverage that reported calendar Q4 results, two-thirds exceeded revenue expectations, while only one-third missed revenue expectations," Treiber adds. The performance of RBC's coverage universe is slightly better than that of the 100 largest tech stocks in Canada, where only 53% beat revenue expectations and 47% missed last quarter.

While investor sentiment is likely to remain restrained pending better visibility to the overall macroeconomic environment, Treiber believes potential headwinds from tariff uncertainty are likely already reflected in the valuations of most of its coverage universe.

For Treiber, the stocks with the most compelling risk-reward profiles in RBC's coverage are Constellation (CSU.TO, Outperform, $5,700 target), Shopify ( SHOP ) and Kinaxis ( KXSCF ) (KXS.TO, Outperform, $210 target).

Price: 4643.01, Change: -11.97, Percent Change: -0.26