AI-Driven Profits: Canadian Tech Stocks Set to Soar

Many tech companies well positioned to take advantage of AI would be better positioned to soar ahead of the sector in the coming months.

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As an investor, it’s important to learn to recognize buzzwords and overhyped assets and opportunities, especially when it comes to tech. There have been multiple instances when different asset classes were overhyped, and investors lost a significant amount of money when the buzz died down.

However, artificial intelligence (AI) doesn’t fall into this category. It may be too soon to make a statement like this, but AI may be as transformative for the modern economy and the financial makeup of the world as the internet was (and still is). Early adopters and tech companies well positioned to take advantage of new AI technologies might soar ahead of the rest of the sector in the coming years.

An information management company

As an Information Management company, Open Text (TSX:OTEX) is inherently well positioned for the advent of AI, as AI thrives on data. The company is already augmenting its service portfolio with AI. It has introduced an AI cloud that allows businesses to make sense of their unstructured data, run comprehensive analyses, and use the new information for better decision making.

It’s one of the few large-cap stocks in the tech sector and one of the handful of tech companies that pay dividends to their investors. The stock is currently quite overvalued and modestly discounted, which is not a good combination. However, the long-term growth potential of the company is quite decent, and it returned about 184% to its investors in the last decade through price appreciation.

Now that the company is pivoting to AI and its AI-powered efficiency and organic success starts manifesting in its quarterly reports, the stock may experience a powerful growth boost.

A learning management system company

As an advanced Learning Management System (LMS) designed for professionals, Docebo (TSX:DCBO) is another tech product well suited for AI augmentation. Some of its elements, like the Analytics and the individualized learning experience it offers, would be prime candidates for AI augmentation. However, the company has grown its AI capabilities with an acquisition.

Acquiring a company that was built from the ground up around AI in education may give them more credibility and technical edge compared to simply adopting these elements for the current LMS.

Through this acquisition, Docebo has established itself as the first AI first Generative AI LMS in the market. Generative AI is capable of using AI and Machine Learning (ML) algorithms to generate content in real-time. A common example of a Generative AI is ChatGPT.

The stock is still trading at a 54% discount from its 2021 peak. So, it can double your money just by re-reaching that level, and it may have the potential to go beyond it. Generative AI is still a new concept in education, but if it becomes commonplace, Docebo will be perfectly positioned to benefit from its mainstream adoption as a pioneer.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Docebo made the list!

Foolish takeaway

The two tech stocks can help you benefit from advances in AI technology. The companies they represent have already improved their product/service portfolio with AI, and over time, they may identify and take advantage of more opportunities AI offers in their respective domains.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Docebo. The Motley Fool has a disclosure policy.

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