Artificial intelligence (AI) is perhaps the most important tech trend of the decade. Empowering businesses to perform tasks faster and more efficiently than ever before, it has sparked a revolution. Perhaps you have seen essays and pictures created by apps like ChatGPT in mere seconds. That’s one major use case for AI, but there are so many more. The truth is that AI is performing more and more essential functions in just about every aspect of business. In this article, I will explore the opportunity in artificial intelligence growth stocks and, importantly, how you can get a piece of the action for yourself.
The big name U.S. stocks
The most obvious players in AI are the big U.S. tech stocks. These companies are investing heavily in AI and ramping up their investments.
First, you have Microsoft, which owns half of OpenAI, ChatGPT’s developer. Then there’s Alphabet, which has its own ChatGPT competitor, Gemini. There’s also Meta Platforms, which has won the praise of developers by making its LLAMA AI completely open source.
The companies above are the biggest players in generative AI today. More important than any of them, though, is NVIDIA (NASDAQ:NVDA). The chip supplier to the generative AI industry, it has a de-facto monopoly on making high performance AI accelerator chips. If you want to build a modern AI application, you need NVIDIA chips in your data centre. Companies as diverse as Alphabet and Qualcomm have tried to compete with NVDA, but whenever they seem to be getting close, NVIDIA releases a new chipset that leaves them in the dust. NVIDIA has gotten mighty pricey thanks to its superior market position in AI. Trading at 67 times earnings, it’s no value stock. Thankfully, there are cheaper “AI winners” out there for you to invest in.
A Canadian stock that is doing great things in AI
One Canadian tech company that’s doing interesting things in AI is Kinaxis Inc (TSX:KXS). It’s a supply chain management company that uses AI to help businesses track and interpret their key supply chain metrics. These include inputs, inventory, buying patterns, and so much more. With Kinaxis’ Rapid Response AI, companies can have key supply chain metrics such as “expected inventory required on March 14” delivered straight to their dashboard. In the past, this kind of supply chain analysis was extremely time consuming, requiring hours of human labour.
Kinaxis RapidResponse is widely used in manufacturing and related industries. It helps businesses make sure they have exactly the right amounts of inventories and raw inputs at the right time, so that no money is wasted and no customers are left underserved.
Foolish takeaway
When you think of AI, it’s easy to think of the big U.S. tech giants. OpenAI is basically owned by one of them, and the others are definitely hogging a lot of attention. But in fact, there are major AI players all around the world – including Canada. Kinaxis is just one among many. With its embedded presence in manufacturing and other supply chain-sensitive industries, it is perhaps the best example of a Canadian AI stock.
