3 Artificial Intelligence Stocks to Buy Now and Hold for Decades

These three AI stocks are using AI to become better companies.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published July 26, 2024 4:40 pm EDT

Investing in artificial intelligence (AI) is a forward-thinking strategy that has the potential to yield substantial long-term rewards. And it’s not just in the United States. The TSX today offers a range of AI-related stocks that can be promising for investors looking to capitalize on the growth of this transformative technology.

Today, we’re going to look at the three best options — AI stocks that are not only offering AI to their customers and clients, but using it themselves to become better companies.

Circuit board with a microchips — Source: Getty Images

Shopify

Shopify (TSX:SHOP) is a leading e-commerce platform that empowers businesses of all sizes to create and operate online stores. The company has been increasingly leveraging AI to enhance its services, from personalized shopping experiences to fraud detection.

Shopify uses AI to power its product recommendations, improving customer retention and sales for its merchants. Plus, the company has shown consistent revenue growth and continues to expand its market presence globally. As e-commerce continues to grow, Shopify’s AI-driven solutions can provide a competitive edge, making it a strong candidate for long-term investment.

Yet right now, Shopify stock has seen shares fall by 3% in the last year and down 22% from 52-week highs. So, as it continues to tackle debt, use AI to its advantage, and add in more revenue, now could be the best time to buy.

Kinaxis

Kinaxis (TSX:KXS) provides supply chain management solutions that utilize AI to optimize and automate complex supply chain processes. Its flagship product, RapidResponse, helps companies manage supply chain planning and execution.

Kinaxis’s AI capabilities enable companies to predict demand, manage inventory, and respond to supply chain disruptions more effectively. The company serves a diverse range of industries, including automotive, aerospace, and pharmaceuticals, which highlights its broad applicability. With the increasing complexity of global supply chains, the demand for AI-driven solutions like those offered by Kinaxis is likely to grow.

Yet again, despite offering strong earnings, Kinaxis stock offers value as well. Kinaxis trades down 7% from 52-week highs as of writing. And yet, analysts believe it should be heading towards $200 per share. And that’s a lot of potential upside.

OpenText

Finally, OpenText (TSX:OTEX is a leader in enterprise information management, offering a suite of products that help organizations manage, secure, and leverage their data. AI plays a significant role in OpenText’s solutions, particularly in areas like data analytics, information governance, and security.

OpenText incorporates AI to enhance its data analytics, automate workflows, and improve decision-making processes for businesses. The company has a history of strategic acquisitions that expand its technological capabilities and market reach. As businesses increasingly rely on data-driven decision-making, OpenText’s AI-enhanced products are well-positioned to meet this demand.

And as with the others, OpenText stock offers a deal on share price. The stock is down 28% from 52-week highs, with the company offering the potential to double in share price at these levels.

Conclusion

Investing in AI stocks on the TSX offers the potential for substantial long-term gains, especially as AI continues to revolutionize various industries. Shopify, Kinaxis, and OpenText are three companies that stand out for their innovative use of AI and strong growth prospects. While investing in stocks always carries risks, these companies’ focus on AI and their solid market positions make them compelling options for investors looking to hold for decades.