AI Stocks: 3 TSX Winners Emerging Early from the Boom

Three TSX stocks are clearly winning from the AI boom and wider adoption of the next-gen technology.

| More on:
bulb idea thinking

Image source: Getty Images

High-growth companies, mostly tech firms, tend to wilt under rising interest rates and bond yields. Surprisingly, technology is the top-performing sector on the TSX in 2023, outpacing 10 primary sectors with its 31.62% year-to-date gain. Three names, in particular, are riding high because of a common denominator: artificial intelligence (AI).

CGI (TSX:GIB.A), Docebo (TSX:DCBO), and Coveo Solutions (TSX:CVO) are benefitting from the AI boom and emerging as early winners. Investors should be happy that the stocks outperform despite the threat of a pullback due to more rate hikes. Fortunately, the wider adoption and use of AI will strengthen their market positions.

Underrated AI stock

CGI provides information technology (IT) and business process services in Canada, the United States, and other international markets. The Canadian firm recently made headlines when the Administrative Office of the U.S. Courts (AOUSC) awarded its wholly owned subsidiary, CGI Federal Inc., a 10-year indefinite-delivery, indefinite quantity (IDIQ) contract.  

The $32 billion IT and business consulting services company has fortified its position in the growth market of Miami with the acquisition of Momentum Consulting Corporation. Besides creating additional value for clients through deep industry and technology expertise, the merger will add scale and access to new technology platforms.

If you invest today, this underrated tech stock trades at $136.21 per share (+16.71% year to date).

Learning platform with AI foundation

The prospects for Docebo and its learning platform are limitless because AI powers it. This $1.77 billion company creates software, solutions, and support systems to help our customers teach and train stakeholders to ensure they contribute to that growth and business success.  

The learning platform’s foundation is anchored on AI and innovation. It acquired Edugo.AI, a generative AI-based learning technology that uses advanced Large Language Models (LLM) and algorithms to optimize learning paths and adapt to individual learner needs.

Docebo will leverage its expertise in enterprise learning to garner a significant share in a large, fast-growing global addressable market. Amazon Web Services, Thomson Reuters, and BMW are among its top clients. At $55.31 per share, DCBO’s positive return is 23.63% but could rise further to $88 (+59%) based on market analysts’ price forecasts.

Leader in sophisticated applied AI

Coveo, a $1.18 billion Software-as-a-Service (SaaS) search engine, is a global leader in sophisticated applied AI. The stock flies under the radar, but the Coveo Relevance Cloud is now a market-leading AI platform. Management believes that AI is powerful and brutal for business.

Its chairman and chief executive officer, Louis Têtu, said, “Our years of experience in developing applied AI solutions for large, complex enterprises have allowed us to bring to market what we believe is a transformative offering in generative AI.” In the first quarter of fiscal 2024, SaaS subscription revenue rose 19% to $28.5 million, while net loss improved to $7 million from $12 million a year ago.

Coveo continues to make waves as a legitimate AI company. At $11.61 per share, current investors delight in the 27.86% year-to-date gain. The TSX has advanced 2.45% in the last five days, but this future multi-bagger gained 14.38%.  

AI benefits

AI technology improves customer experiences, reduces costs, and increases economic benefits. CGI, Docebo, and Coveo have done and are still doing all that and more to their customers.

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.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Amazon.com, CGI, Docebo, and TMX Group. The Motley Fool has a disclosure policy.

More on Tech Stocks

Family relationship with bond and care
Tech Stocks

Pensioners: Should You Take CPP Payout at 60?

You can collect your CPP payout anytime between 60 and 70. While the average retirement age is 65, circumstances may…

Read more »

edit Businessman using calculator next to laptop
Tech Stocks

If You’re Not Using This Investing Tactic, You’re Missing Out on Future Wealth

After paying a hefty tax bill, you realize the importance of being tax-free. Here’s an investing strategy for a tax-free,…

Read more »

healthcare pharma
Tech Stocks

Down 61% From Record Highs, Can Well Health Stock Recover in 2024?

Well Health has crushed broader market returns since its IPO and continues to trade at a discount to consensus price…

Read more »

A bull outlined against a field
Tech Stocks

3 No-Brainer Stocks to Buy Before a Bull Run

Given their healthy growth prospects and attractive valuation, I am bullish on these three stocks ahead of the next bull…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Up 57% From its 52-Week Low, Is Shopify Stock Still a Buy?

Shopify (TSX:SHOP) stock is up 57%, but the company fell earlier this year. What could happen as we head into…

Read more »

Man data analyze
Tech Stocks

Is Shopify Stock a Buy Before its Q1 Earnings?

Down over 50% from all-time highs, Shopify stock has significant upside potential given consensus growth estimates.

Read more »

A colourful firework display
Tech Stocks

2 Potentially Explosive Stocks to Buy in May

These two companies have been doing well over the years, but more could be coming as interest in the market…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

Why Tesla Stock Jumped 15% on Monday

Tesla (NASDAQ:TSLA) stock surged to start out the week after a surprise visit to China for a huge announcement.

Read more »