With Groundhog Day behind us, Canadians could be looking forward to a fairly early spring season and a potential continuation of the bull run in American stocks. Undoubtedly, tech continues leading the pack, with most other sectors just sitting in the passenger’s seat. As to when the market gains will broaden out further remains a mystery.
For now, however, I wouldn’t bet on some sort of growth-to-value rotation. Even if rate cuts aren’t going to be coming in rapidly, I believe that the rise of generative artificial intelligence (AI) and other productivity-enhancing technologies could help set a strong foundation for continued market gains.
In this piece, we’ll check in with three of the most intriguing powerhouse stocks that I’d continue to keep on my watchlist for spring and summer. Two of the names have a lot to gain as generative AI continues taking the world by storm. Meanwhile, the last name is a low-tech play that has what it takes to continue its impressive multi-year growth streak.
Either way, let’s check in with the following stocks for investors looking to jolt growth without having to pay a premium valuation.
IBM
IBM (NYSE: IBM) is a pretty old tech company that’s been left behind over the past decade. Undoubtedly, the so-called Magnificent Seven stocks have stolen the show. All while IBM hovered in the background, clocking in decent but not “magnificent” quarters on the back of the AI trend.
While IBM is a company that’s been working hard on innovating on the AI front for many years, investors may have discounted the firm’s potential. It’s an old company, and it’s been one of the tech sector’s biggest dogs in recent years.
That is, until recently. IBM stock woke up, smashing to an 11-year high after clocking in an incredible quarter. As the company orders employees back to the office, I think AI could help it reach greater heights, perhaps sooner than many of us expect. Either way, the stock looks cheap at 22.48 times trailing price to earnings when you consider its AI talents.
Apple
Apple (NASDAQ: AAPL) is another great company that I believe Canadians should have a closer look at following its flat quarterly earnings report. Undoubtedly, the company failed to pull the rabbit out of the hat, with weakness coming from the Chinese region. Regardless, I’d continue to hang onto Apple as it’s one of those companies that has what it takes to keep reinventing itself.
As generative AI becomes a thing, I’d look for Apple to get in on the action. If it does, today’s multiple may prove way too cheap for beginner investors, even with the less-than-favourable exchange rate!
Today, the stock sits at $187 and changes after rising close to 1% on a big down day for the markets.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) is one of those momentum stocks that Canadian investors should hang onto through the economy’s ups and downs. Despite the lacklustre performance of the TSX Index, Couche-Tard is just a big day (or two) away from breaking new all-time highs. Even after soaring 45% in two years, I still view shares as a great value based on what you’re getting.
A solid, predictable cash flow stream and managers who know how to get the job done. Looking into 2024, I’d hope for a big acquisition, perhaps in the realm of grocery stores, as Couche-Tard looks to ready its business for the age of electric vehicles and frictionless shopping experiences. Heck, I’d look for AI to have some impact on reducing checkout times and adding to the convenience factor!
