Many large tech companies have significantly raised their bets on the future of artificial intelligence (AI) technology in the last year. Many experts believe that AI could be one of the most promising and disruptive technologies of the 21st century, as it has the potential to transform various industries and create new opportunities for growth and innovation. Besides the broader market recovery in recent months, investors’ increasing focus on AI tech could be one of the key reasons why the shares of most AI-focused firms have recently witnessed a rally.
However, the year 2024 has started on a mixed note amid the ongoing debate about the direction of the monetary policy in the near term. If this debate leads to another stock market selloff, you may want to consider adding some quality Canadian AI stocks with strong competitive advantages to their portfolios. Such tech stocks can continue to benefit from the increasing demand for AI solutions and services across different sectors, which can help their share prices rally in the long run. Here are two of the best AI stocks you can buy if the market dips again in 2024.
Kinaxis stock
Kinaxis (TSX: KXS) is an Ottawa-headquartered software company that primarily focuses on providing cloud-based supply chain management solutions to businesses across the globe, with the United States and Europe being its two largest geographical markets. It currently has a market cap of $4.4 billion, as its stock trades at $155.35 per share after rising by around 14% in the last three months.
In the last few years, Kinaxis has tried to make its supply chain management solutions more appealing to customers by integrating them with AI technology. This not only allows its clients to enhance the operational efficiency of the supply chain process but also reduces costs and improves customer satisfaction.
Although macroeconomic challenges have affected tech companies in recent quarters, Kinaxis continues to post strong financial results. In the first three quarters of 2023, the company’s total revenue advanced by 17.4% YoY (year over year) to US$315 million. During the same period, its adjusted earnings rose 18.2% to $1.17 per share, reflecting the company’s ability to continue growing, despite adverse economic conditions. These positive factors make Kinaxis a very attractive TSX-listed AI stock to hold for years to come.
Coveo stock
Coveo Solutions (TSX: CVO) could be another attractive Canadian AI stock to invest in for the long term. It’s a Québec-based firm that primarily focuses on providing AI-powered solutions to improve the digital experience by optimizing and personalizing the entire customer journey. The company currently has a market cap of $885.2 million as its stock trades at $8.40 per share after rising by around 10% in the last nine months.
In the September 2023 quarter, Coveo’s sales rose 11.8% YoY to US$ 31.2 million. This growth helped it deliver an adjusted quarterly net profit of US$2.8 million against analysts’ expectations of a US$1.6 million loss.
As Coveo continues to utilize the latest generative AI models to help its clients improve customer experiences, its financial growth trends are expected to improve in the coming years. Given its strong growth outlook, buying this AI stock on a dip in 2024 could be a wise move.
