Artificial Intelligence Stocks to Watch: Canadian Companies in the Mix Now

Canadian AI stocks are gaining traction in 2023. CGI commits $1 billion to artificial intelligence while a fast-growing small cap executes on an AI investment program.

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Investor expectations on Canadian artificial intelligence (AI) stocks in the second-quarter earnings season are higher than at any other time given current hype. Although Canada has an incubation hub for AI, Canadian AI startups seldom graduate to list on public stock markets. They usually get acquired by a foreign, more aggressive entity before local investors warm up to their disruptive potential. That said, there’s growing hope for Canadian stock investors as local companies increasingly get in the mix, offering opportunities to play the AI boom.

Canadian companies are actively investing in artificial intelligence in 2023. AI adoption could enhance corporate productivity, boost revenue generation, and improve profit margins. From the largest banks to ecommerce giants to healthcare stocks, several Canadian firms are rising to embrace AI this year.

Ecommerce growth stock Shopify launched a ChatGPT-powered AI shopping assistant in May. Open Text acquired Micro Focus in February and gained access to an AI platform, IDOL, that extensively expanded the data analytics capabilities of its software suites. Investors may get an update on integration efforts in an OTEX earnings call on August 3, 2023. Canada’s largest chartered bank, (The) Royal Bank of Canada or RBC, acquired AI-powered real estate startup OJO Canada in February.

Watch out for mentions of AI in earnings releases that may ignite new investor interest this earnings season. Below are two “emerging” AI stocks to watch right now.

CGI commits $1 billion to AI investments

Global information technology consultancy firm CGI (TSX:GIB.A) announced on July 24 its $1 billion investment plan to expand its AI services and solutions over the next three years.

CGI has been a reliable business consultant on AI projects for years, helping clients test and train AI models. The latest investment plan is a significant statement of intent that speaks loud to potential clients worldwide that CGI will be the “people” to call for guidance and support as the corporate world brainstorms on how to efficiently and profitably integrate AI technologies in work processes to boost productivity and generate more profits.

Why is CGI an artificial intelligence stock to watch? The company’s $1 billion AI-investment plan should elevate its competitiveness among global AI business consulting companies.

The dilemma for corporate executives right now is how to strategically integrate AI with existing business operations to enhance productivity, unlock new revenue lines, and generate more profits. Consultancy firms come to their aid, and business volumes are increasing.

Last month, Accenture committed US$3 billion towards AI investments over the next three years. By June 2023, the company had won US$100 million worth of AI consulting contracts in just four months. AI consulting could be big business over the next several years.

CGI stock is up 16% year to date while Accenture stock has delivered 19% in total investment returns. However, CGI stock has outperformed Accenture stock over the past year.

May the best AI consultant win more business for its shareholders.

WELL Health Technologies: An emerging Canadian AI stock to watch

WELL Health Technologies (TSX:WELL) is a Canadian digital health small cap stock that’s fast embracing artificial intelligence. Earlier this year, the company announced an AI investment program that targets investing in 10 healthcare AI applications. And management is quickly executing.

The company announced on Thursday, July 20, 2023, a new acquisition and strategic deals with a nano-cap health technology company MCI Onehealth Technologies. They included a strategic alliance to finance MCI’s AI, data science, and rare and complex disease detection platform.  

MCI is building an AI platform that’s reportedly assisting in properly diagnosing patient ailments. WELL Health will fund the project through a convertible debenture that grants it the right to become a controlling shareholder in MCI stock. WELL Health’s deals with MCI also include the acquisition of a “significant portion of MCI’s clinical assets in Ontario. The acquisition may close by October and be accretive to WELL’s adjusted operating earnings for 2024.

WELL Health’s commitment to AI investments makes it a serious AI stock to watch over the next several quarters. The company could build a treasure trove of AI assets that may be of significant value to its shareholders.

WELL stock price is up 60% year to date. The company expects to grow revenue by nearly 34% year over year this year following its CarePlus Management acquisition this month.

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 Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Accenture Plc and CGI. The Motley Fool has a disclosure policy.

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