3 Canadian AI Stocks That Are Minting Coin in 2024

AI stocks like Kinaxis Inc (TSX:KXS) are outperforming the TSX.

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Did you know that there are many Canadian companies claiming a piece of the generative artificial intelligence (AI) pie?

From supply chains and logistics to e-commerce and textual analysis, Canadian companies are moving the needle in AI research. Not all Canadian AI companies are household names, but many of them are growing rapidly. Potentially, one of them could someday join the “Magnificent Seven” club of trillion-dollar tech stocks.

In this article, I will explore three Canadian AI companies that are changing the game in 2024.

Kinaxis

Kinaxis (TSX:KXS) is an industry-leading supply chain analytics company. It uses generative AI to deliver rich supply chain insights. With Kinaxis RapidResponse, you can quickly collect key supply chain trends and use them to forecast (for example) how much inventory will be needed on what date. RapidResponse’s software can figure this kind of thing out using AI alone. In the past, you’d have had to hire a statistician to crunch all of this data for you.

Kinaxis’s RapidResponse platform has seen increased adoption in recent years due to its use of generative AI. In the most recent 12-month period, the company’s revenue grew 20.5%, and its diluted earnings per share (EPS) grew 72%. Overall, it was an impressive showing.

OpenText

OpenText (TSX:OTEX) is a company that specializes in text analysis and content management. Its AI cloud has a number of powerful AI features:

  • Text analytics
  • Predictive insights
  • Text mining (extracting usable info from text)
  • Video classification analysis
  • Automated business reports (e.g., updates on sales and earnings for a given quarter)
  • Natural language chatbots
  • And more

This is a pretty comprehensive set of enterprise AI features, and OTEX’s AI Cloud lets users access it all with one subscription. It is definitely promising, and OTEX’s revenue growth recently exploded to 51% due to the increased adoption of the AI cloud. I’d say there’s some risk of these products losing clients once the “wow” factor of AI wears off, but trading at 7.5 times earnings, OTEX isn’t exactly priced for continued growth.

Shopify

Shopify (TSX:SHOP) is a Canadian e-commerce company. It provides a platform for self-hosted online stores, it includes both a website builder and a payment platform. The company also recently branched out into point of sale (POS) terminals, which are similar to e-commerce payment platforms only for use in physical stores. If you’ve ever worked food service or retail: they’re the touch-screen applications you use to take orders and keep track of what’s in the cash register.

Shopify’s main use of AI is much easier to understand than Shopify’s or Kinaxis’s: it uses large language models (LLMs) to help vendors write product descriptions. Basically, if you own a business, you can write a few simple bullet points about one of its products in Shopify Sidekick and have your purely factual description turned into a compelling product description that converts visitors into customers. Shopify is also using AI to help vendors build customer service chatbots. It’s a pretty exciting set of AI features, and it bodes well for Shopify’s future.

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.

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Kinaxis. The Motley Fool has a disclosure policy.

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