Earlier this year I’d discussed several TFSA strategies that investors should consider as we look ahead to the next decade. Today we’re going to look at two stocks that are a great fit for a growth-oriented portfolio.
Better yet, investors can jump in on the burgeoning artificial intelligence market with these equities. AI technology boasts broad applications across many sectors. A recent report from Fortune Business Insights projected that the North American AI market would reach $202 billion by 2026, compared to a $9 billion valuation in 2018. This represents a whopping CAGR of 33.1% over the forecast period 2019-2026.
Shopify
Shopify (TSX:SHOP)(NYSE:SHOP) is a Canadian tech stock that requires no introduction. Shares have soared 170% in 2019 as of close on September 4. The stock has been one of the highest performers in tech in North America in the latter half of this decade.
Shopify does have its doubters, however. The company has yet to hit profitability and its murky merchant data has some investors concerned about its underlying fundamentals. However, its revolutionary concept and rapid growth are worth getting excited about.
Back in April, I’d discussed how Shopify is using AI to empower merchants on its e-commerce platform. The company recently introduced Apple Business Chat for iPhone users, and plans to help its merchants with conversational artificial intelligence. Customers without will be able to use its recently launched interface, Shopify Chat.
Shopify is projecting revenues in the $1.51 billion to $1.53 billion range in fiscal 2019. Investors will be paying a premium for Shopify stock right now, but it’s too hard to bet against this story in the fall. I’m on the Shopify train for the long term.
Kinaxis
Kinaxis (TSX:KXS) has been a frustrating hold over the past year, especially compared to the explosive Shopify. Still, the software solutions provider is worth your attention in September. Shares have climbed 20% in 2019 at the time of this writing.
In the second quarter, Kinaxis saw revenue rise 9% year-over-year to $42.4 million and gross profit climbed 11% to $29.4 million. The company reaffirmed its 2019 fiscal year guidance targets, which include total revenue in the range of $183 million to $188 million.
Kinaxis offers more modest growth compared to some of its other peers in the tech sector, but it has helped Canada emerge as a leader in supply chains software offerings.
A report from Allied Market Research projected that the global supply chain management software market is expected to grow at a CAGR of 9.7% from 2018 to 2025. Kinaxis’ software uses AI to improve existing processes, as well as supply chain visibility and risk insight.
This has drawn large companies like Toyota Motors and Volvo to use Kinaxis’ software in order to maximize the efficiency of their global supply chain.
Shares of Kinaxis are trading at the middle of its 52-week range. The stock has averaged annual returns of 35% over the past five years. This is still one of the most underrated tech stocks on the TSX, and is well worth stashing in your TFSA today.
