Decoding Profits: Best Canadian AI Companies to Invest in Right Now

Kinaxis (TSX:KXS) stock is one of Canada’s best AI companies.

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Artificial intelligence (AI) stocks have been some of the best-performing stocks of 2023. NVIDIA (NASDAQ:NVDA) stock has risen 213% for the year; Alphabet, Microsoft, and other AI names have risen as well. Basically, if a company is making big investments in AI, investors are buying it — whether the company is profiting off the investments or not.

Some aspects of this AI momentum make sense, but other aspects of it do not. For example, NVIDIA does deserve at least some of the gains it has made this year, as it’s actually profiting off AI; Microsoft, so far, is merely sinking money into it. It’s a mixed picture. However, now, with these AI-powered applications going mainstream, there may be profits not just for NVIDIA, but for software companies as well.

In this article, I will explore two TSX AI stocks that may be worthy additions to a tech stock portfolio.


Kinaxis (TSX:KXS) is a Canadian supply chain management company. It develops software that helps companies keep track of inventory, customer purchases, and other things relevant to supply chains. KXS has been developing such software since the 1980s. In recent years, it has added AI to its software applications. With the use of AI in KXS, you can now automatically have your software tell you how much inventory is needed on what date. In the past, you’d have had to skillfully “use” the software to yield such insights. Today, with AI, it’s just about automatic.

In its most recent quarter, Kinaxis delivered the following:

  • $105 million in revenue, up 31%
  • -$2.54 million in profit, improved by 3%
  • -$0.09 in diluted earnings per share, improved by 10%
  • $15 million in adjusted earnings before interest, taxes, depreciation, and amortization, up 47%

That is pretty strong growth. The profitability was not amazing, but with fast-growth companies like KXS, investors are willing to forgive a lack of profit sometimes. The high growth points to a more profitable future. Of course, investors are paying for all this growth: KXS trades at very high price-to-earnings, price-to-sales, and price-to-book ratios. If the company can keep the growth up, then it may prove to be worth it.


Shopify (TSX:SHOP) is a Canadian technology company that sells a platform businesses can use to sell their goods online. It also recently got into the point of sale (POS) business, which involves selling the software that operates cash registers.

Shopify has been a popular and high-flying Canadian tech stock for some time now. It recently got into using generative AI in its software. Shortly after the launch of ChatGPT triggered an arms race in everything AI related, SHOP launched an AI service of its own. It uses large language models to create ad copy for vendors’ products automatically. This service can save vendors a lot of time and money. So, it may be a useful feature that compels more vendors to sign up for one of Shopify’s subscription plans.

Foolish takeaway

AI has been the big theme of the markets in 2023. Between ChatGPT, MidValley, and their Big Tech equivalents, there’s been a lot to keep up with. There are many Canadian companies pushing the needle of innovation in AI. The two in this article would be good ones to look at when building your tech stock portfolio.

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.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Andrew Button has positions in Alphabet. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Alphabet, Kinaxis, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

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