Every year the stock market sees a new trend. Recently, new sectors like electric vehicles, cybersecurity, and cloud computing have all been in the spotlight for investors.
In 2023, the chosen sector seems to be none other than Artificial Intelligence. The release of the popular AI software from OpenAI, known as ChatGPT, has opened our eyes to the true power of artificial intelligence.
How popular has AI become? Microsoft invested $10 billion into OpenAI to integrate ChatGPT into its ecosystem. Alphabet and Alibaba have also invested heavily in creating AI chatbots of their own.
AI and machine learning are powerful tools that have the potential to change a number of industries in the future.
Investing in the right AI stocks early on could reap plenty of rewards down the road. Knowing which AI stocks are the real deal and which are just companies taking advantage of the hype is the real challenge.
In this article, we will discuss 7 of the best AI stocks in Canada for April 2024.
Best AI Stocks in Canada for 2024
1. Kinaxis Inc
Here are some key facts for KXS.TO
- Ticker Symbol: TSE: KXS
- Market Cap: $4.99 billion
- PE Ratio: 192.03
- 52-Week Trading Range: $119.48 – $187.01
- Industry: Software Platform for Supply Chain Management
- 5-Year Returns: 123.33%
Kinaxis Inc is a SaaS company that is based in Ottawa and was founded in 1984. It specializes in providing an AI-integrated supply chain management software platform to enterprises around the world.
Its main platform, called RapidResponse, uses AI to perform complicated tasks like data analysis and alerting the company of a potential issue or threat to its supply chain.
Much of Kinaxis’ revenue comes in the form of subscription payments for its software. Some of its high-profile customers include Merck, Agilent Technologies, and Applied Materials.
2. Shopify Inc
Here are some key facts for SHOP.TO
- Shopify Inc: TSE: SHOP
- Market Cap: $77.05 billion
- PE Ratio: N/A
- 52-Week Trading Range: $33.00 – $78.24
- Industry: eCommerce
- 5-Year Returns: 307.64%
Shopify Inc is an Ottawa-based eCommerce provider that has rapidly become one of Canada’s largest companies. It was established in 2006, and its CEO Tobias Lutke was one of the original founders of the company.
Through its eCommerce platform that assists people in setting up online stores, Shopify utilizes an AI platform called Shopify Magic to help merchants automatically produce product descriptions. This app helps in the initial setup of an online store which is often the most time-consuming and laborious part of the business.
There are also plenty of AI-based apps that can be integrated into your Shopify store. These help with tedious things like advertising, customer communication, and fraud prevention.
3. VIQ Solutions Inc
Here are some key facts for VQS.TO
- Ticker Symbol: TSE: VQS
- Market Cap: $16.1 million
- PE Ratio: N/A
- 52-Week Trading Range: $0.30 – $2.20
- Industry: Transcription
- 5-Year Returns: -90.98%
We move from one of Canada’s largest companies to one of the true AI penny stocks on the TSX. VIQ Solutions has been a volatile stock to invest in, but there is plenty of potential in these small-cap AI stocks.
VIQ Solutions provides automated transcription services to its customers. Imagine places like courtrooms that rely on humans to capture everything that is said. VIQ’s software can automatically record these events and provide transcripts without any assistance.
4. Open Text Corporation
Here are some key facts for OTEX.TO
- Ticker Symbol: TSE: OTEX
- Market Cap: $14.1 billion
- PE Ratio: 32.79
- 52-Week Trading Range: $34.72 – $54.17
- Industry: Software
- 5-Year Returns: -13.22%
Open Text is a company that doesn’t make very many headlines in Canada, yet it is the fourth-largest software brand in the country.
It produces enterprise information management software that helps businesses manage large amounts of data. Open Text’s flagship platform is called Magellan, which generates insights and automates processes to deliver information and help in decision-making.
Open Text is also the rare tech company that pays a dividend. It is a TSX Dividend Aristocrat and currently pays a 2.51% yield.
5. Fobi.AI
Here are some key facts for FOBI.V
- Ticker Symbol: TSXV: FOBI.V
- Market Cap: $66.45 million
- PE Ratio: N/A
- 52-Week Trading Range: $0.195 – $0.88
- Industry: Software
- 5-Year Returns: -23.15%
Fobi.AI is a Vancouver-based software company that provides AI-based data analytics and mobile identity services. It is another Canadian AI penny stock that trades on the TSX Venture Exchange.
With AI right in the company name, Fobi provides a software portal that provides insights through real-time analytics. These help businesses understand customer behaviours and identify potential issues, which helps the company operate more efficiently.
6. C3.AI Inc
Here are some key facts for C3.AI
- Ticker Symbol: NYSE: AI
- Market Cap: $2.55 billion
- PE Ratio: N/A
- 52-Week Trading Range: $10.16 – $34.68
- Industry: Software
- 5-Year Returns: -80.98%
C3.AI has been one of the more popular names in the latest AI surge. The stock trades on the NYSE and provides AI-based turnkey enterprise software applications that help to improve efficiencies and provide data analytics.
Its platforms are used by major corporations such as Shell, Baker Hughes, and even the US Air Force. C3.AI provides AI applications for things like CRM, supply chains, financial services, the public sector, and even specialized applications for defence and intelligence and oil and gas.
7. NVIDIA Corporation
Here are some key facts about NVIDIA
- Ticker Symbol: NASDAQ: NVDA
- Market Cap: $671 billion
- PE Ratio: 156.14
- 52-Week Trading Range: $108.13 – $280.00
- Industry: Semiconductors and chips
- 5-Year Returns: 369.40%
We end with what is, without a doubt, the largest and most well-known company on this list. NVIDIA Is a $671 billion business that builds some of the best GPUs on the market.
It is a fabless chip company that also produces software, APIs, and system-on-chip units (SoCs). NVIDIA’s AI platform allows enterprises to build their own AI software that is customized to each individual business.
Its GPUs are also involved in initiatives like Deep Learning, as well as building the world’s next AI Supercomputers.
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What are Artificial Intelligence (AI) Stocks?
AI stocks allow you to gain exposure to companies that are doing work to advance the industry. These can be by developing AI-based software, or it could even be companies that use AI to enhance their main business.
As you saw from our list, AI stocks can represent multi-billion dollar companies or emerging startups that trade as penny stocks. With the AI industry still in its infancy, these stocks all have the potential to grow alongside a global adoption of AI software.
How to Choose AI Stocks in Canada
There are a surprising number of AI stocks in Canada. These stocks trade on both the TSX and the TSX Venture Exchange.
If you want to choose the right AI stocks in Canada, you will need to research how integrated AI is in the business. For example, a software company that has machine learning built directly into the platform relies heavily on AI.
As more businesses adopt AI to improve inefficiencies, these software providers will likely see business increase substantially.
What Canadian AI companies are publicly traded?
- Kinaxis Inc (TSE: KXS)
- Open Text (TSE: OTEX)
- Fobi.AI (TSXV: FOBI.V)
- Docebo Inc (TSE: DCBO)
- CGI Group (TSE: GIB.A)
- VIQ Solutions (TSE: VQS)
- MCloud Technologies Corp (CVE: MCLD)
- Datametrix AI Ltd (CVE: DM)
Downsides of AI Stocks
Like many tech-based sectors, AI can be a speculative industry. As you can see from some of the 5-year performances on our list, there can be some heavy drawdowns as well as massive gains.
Many AI companies are still emerging and therefore are not yet profitable. It will take some patience with some AI stocks, and others will unfortunately not work out at all.
If you have a long-term investing horizon and a higher risk appetite, AI stocks have a lot of potentials. But they have just as much potential to be just a passing fad that we have forgotten about a few years from now.
Methodology
Choosing AI stocks can be a bit of a challenge, especially since so many are still undeveloped businesses. Try to research what their products are and how well AI enhances them.
As with other growth sectors, you will want to see signs of development like sequential quarterly revenue and customer growth. Don’t use the PE Ratio, as they are often either ridiculously high or not even available.
Finally, keep your finger on the pulse of overall AI sentiment. If AI falls out of favour with investors, these stocks could see a swift decline that could erase any gains made during the recent AI-market rally.
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Related:
Hi, would it be possible for you to write a blog post on Canadian and US AI ETFs?
@Karen: Sure, we will add this to our to-do list. Cheers.