In this article, we will look at the 10 Most Oversold Canadian Stocks to Invest In.

Canadian stocks have been on a roll, rallying to record highs and outperforming their US counterparts. The country’s main stock index, the Toronto Stock Exchange Composite Index, gained 29% in 2025, outpacing the S&P 500, which rose 16%. The outperformance has continued, with the TSX gaining 8% compared to the S&P 500’s 4% over the same period.

The stock market has delivered three consecutive years of gains. The outperformance stems from the Canadian equity market’s heavy concentration in energy and basic materials stocks, which have benefited from a spike in commodity prices.

“The materials sector benefited from rising prices in gold, copper, and other critical minerals, as investors sought hedges against geopolitical and inflation risks,” says Ashish Dewan, investment strategist at Vanguard Canada. Analysts expect this trend to continue into 2026.

Canada’s stock market looks set to keep rising. Contributing factors include low interest rates, strong consumer spending, and the possible resolution of the tariff conflict with the US.

“While no market leads forever, the Canadian stock market enters 2026 with meaningful tailwinds and a more balanced foundation than the US … the case for continued relative strength is very much alive,” says Desjardins Capital Markets macro strategist Tiago Figueiredo.

While valuations have risen significantly as the broader equity market powers to record highs, there is still room for further gains, especially in stocks that have come under pressure. Some Canadian stocks have pulled back sharply and entered oversold territory amid a decline in commodity prices.

“The strongest tailwind for Canadian equities is that they are part of value-oriented global equities. Canada’s stock market should benefit as artificial intelligence adoption broadens. Efficiency will improve across industries as AI is adopted by more consumers, not just technology builders,” says Ashish Dewan, investment strategist at Vanguard Canada.

With that in mind, let’s take a look at the most oversold Canadian stocks to invest in.

Our Methodology

For our list of the most oversold mid-cap stocks to buy, we selected Canadian stocks with the lowest Relative Strength Index (RSI) readings and an average analyst rating of Buy or better. We used the Finviz screener to identify stocks with an RSI below 35. We further trimmed the list to stocks with upside potential of more than 5% and detailed the number of hedge funds holding stakes in them in Q4 2025. Finally, we ranked the stocks based on their upside potential (as of May 4).

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

Most Oversold Canadian Stocks to Invest In

10. Allied Gold Corporation (NYSE:AAUC)

Relative Strength Index Reading: 22.27

Stock Upside Potential: 10.46%

Number of Hedge Fund Holders: 11

Allied Gold Corp (NYSE: AAUC) is one of the most Oversold Canadian stocks to invest in. On April 1, Allied Gold Corp (NYSE: AAUC) shareholders approved a proposed acquisition of the company by Zijin Gold.

The Hong Kong listed company has agreed to acquire Allied Gold in a transaction that values the company at C$44 a share. The all-cash transaction values the company at an equity value of C$5.5 billion and comes with no financing conditions. Zijin is to acquire the company using cash on hand, with the transaction poised to close by the end of May.

According to Chairman and Chief Executive Peter Marrone, the transaction will provide a highly attractive all-cash offer for the company. It also represents an all-time high for the share price. The planned acquisition comes when Allied Gold Corp’s core asset, including Sadiola, the Côte d’Ivoire complex, and Kurmuk are poised to begin production this year. The mines produce about 375,000 ounces of gold a year.

Allied Gold Corporation (NYSE:AAUC) is an international gold mining company focused on exploring, developing, and operating gold mining assets in Africa, specifically in Mali, Côte d’Ivoire, and Ethiopia. Headquartered in Toronto, Canada, the company operates high-quality mines like Sadiola (Mali) and the CDI complex (Côte d’Ivoire) using open-pit and underground techniques, with a goal to become a senior producer aiming for over 700-800koz of annual gold production.

9. CGI Inc. (NYSE:GIB)

Relative Strength Index Reading: 33.56

Stock Upside Potential: 25.88%

Number of Hedge Fund Holders: 22

CGI Inc. (NYSE:GIB) is one of the most oversold Canadian stocks to invest in. On April 30, CGI Inc. (NYSE:GIB) inked a strategic partnership with Cleura to expand its sovereign cloud offering in the Nordics. The partnership comes as the company looks to capitalize on growing cloud demand from Nordic organizations.

As part of the partnership, CGI is to integrate Cleura’s European-based cloud services into its offerings. The integration will allow the company to further strengthen its position as a trusted partner in cloud data and hybrid IT. It will also allow the company to support clients as they navigate the complex digital landscape.

On the other hand, CGI has achieved the Microsoft Copilot specialization in Modern Work within its Microsoft AI Cloud Partner Program. The designation paves the way for the company to deliver Microsoft 365 Copilot solutions and its capabilities. The designation will allow the company to operationalize cloud and AI investments securely at scale while navigating cybersecurity challenges.

CGI Inc. (NYSE:GIB) is one of the world’s largest independent IT and business consulting firms, providing end-to-end services including strategic IT consulting, systems integration, and managed services. It helps clients—particularly in government, financial services, and healthcare—digitally transform, improve operational efficiency, and implement technology solutions.