Back in the summer, I’d discussed how investors could seek out exposure to the artificial intelligence (AI) space. AI development, research, and use is new, broad, and ever expanding, which means that investors have many avenues to choose from. The International Data Corporation, a top global market intelligence firm, recently projected that the global AI market would reach revenues of $156.5 billion in 2020. This would be up 12.3% from the prior year.
This projection includes AI development in software, hardware, and services. Today, I want to look at two top Canadian companies that have relied on promising AI development to drive and promote their businesses. Both stocks have handsomely rewarded shareholders in 2020. There is good reason to believe that these technology stocks will continue to outperform the broader market going forward.
Why Shopify is the ultimate artificial intelligence stock
Shopify (TSX:SHOP)(NYSE:SHOP) is an Ottawa-based company that provides a cloud-based multi-channel commerce platform for small- and medium-sized businesses in Canada and around the world. Its shares have surged 156% in 2020 as of close on October 22. The stock is up over 230% year over year.
Investors can expect to see its third-quarter 2020 results on October 29. In Q2 2020, Shopify delivered 97% revenue growth and Gross Merchandise Volume (GMV) of $30.1 billion — up 119% from the prior year. The COVID-19 pandemic has driven even more consumers to online shopping. To thrive in 2020, retailers must have a strong e-commerce presence.
This company does more than just offer a turnkey platform to its merchants. Its platforms use AI for smarter advertising and marketing, achieve personalization at scale, deliver more effective and cost-effective marketing, in addition to other benefits. Shopify has established itself as a global leader in AI development. Investors seeking exposure to this space should snatch up this explosive tech stock right now.
Don’t sleep on this Canadian tech stock this decade
Kinaxis (TSX:KXS) is another Ottawa-based technology company that has made waves since debuting on the TSX in the mid-2010s. Shares of Kinaxis have climbed 110% so far this year. This company is also expected to release its Q3 2020 results at the end of this month.
In the second quarter of 2020, Kinaxis delivered total revenue growth of 45% to $61.4 million. Kinaxis has won huge clients with its supply chain management and operations planning software. And, you guessed it, this software utilizes AI and machine learning. Companies are eager to optimize their supply chains in an increasingly complex world, especially those with massive global reach like Toyota and Ford.
Through machine learning and AI, companies using Kinaxis’s software can eliminate the need for a team of data scientists. Moreover, machine learning and always-on analytics can bolster efficiency in a company’s supply chain. Its AI offering can also allow companies to see faster time to value by automatically ingesting data from a variety of sources.
Kinaxis and Shopify are very promising artificial intelligence stocks that also boast flawless balance sheets. These are fantastic stocks to stash in your portfolio for the long haul.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. David Gardner owns shares of Ford. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends KINAXIS INC.