The domestic and international news media has dedicated considerable attention to the development of artificial intelligence (AI). The introduction of ChatGPT, an AI chatbot developed by OpenAI and launched in November 2022, became one of the fastest-growing consumer software applications by January 2023. Onlookers and investors alike were awed for its detailed and varied responses to a broad array of topics.
Today, I want to discuss why Canadian investors should get in on this space. Moreover, I want to look at AI stocks that are worth stashing in your portfolio for the long haul.
Here’s why Canadians should bet on the future of AI
Grand View Research valued the global AI market at US$136 billion in 2022. The same report projected that this market would deliver a compound annual growth rate (CAGR) of 37% from 2023 through to 2030. Meanwhile, Fortune Business Insights recently estimated that the global AI market was valued at US$428 billion in 2022. The market researcher forecast that this market would achieve a CAGR of 21% over the same period. It projects that the global AI market will grow from $515 billion in 2023 to US$2.02 trillion in 2030.
Two Ottawa-based AI stocks that are moving in opposite directions
Shopify (TSX:SHOP) is an Ottawa-based commerce company that provides a platform and services in Canada, the United States, Europe, and around the world. Its shares have increased 6.2% month over month as of early afternoon trading on June 16. The tech stock has surged 76% so far in 2023.
This top tech stock has regained significant momentum this year. The company announced widespread layoffs in the first quarter of fiscal 2023, which was well received by investors. In the first quarter, Shopify announced the launch of a new AI shopping assistant that is powered by OpenAI’s ChatGPT API. This tech stock has strong growth potential and has picked up renewed momentum in the late spring season.
Kinaxis (TSX:KXS) is also based in Ottawa and provides cloud-based subscription software for supply chain operations in Canada and around the world. Its shares have climbed 16% in the year-to-date period. Investors can see its recent performance with the interactive price chart below.
In the first quarter of fiscal 2023, Kinaxis posted total revenue growth of 3% to $101 million. Meanwhile, it posted annual recurring revenue growth of 23%. Kinaxis used machine learning to optimize its supply chain operations planning software. The stock is geared up for strong earnings growth going forward. Meanwhile, it boasts an immaculate balance sheet.
Seek broad exposure to this sector with this AI-focused ETF!
Horizons Big Data & Software ETF (TSX:HBGD) is an exchange-traded fund (ETF) that tracks a portfolio of global companies focusing directly on data development, storage, and management-related services and solutions as well as hardware and hardware-related services. Shares of this ETF have surged 58% in 2023 at the time of this writing.
Some of the top holdings in this fund include NVIDIA, a California-based multinational technology company, Ibiden, a Japanese electronics company, and Advanced Micro Devices, another California-based semiconductor company.