The tech sector in Canada is relatively healthy, but it’s nothing comparable to the tech sector across the border, where some of the largest tech companies trade. The US is also leading the market in AI giants (including publicly traded ones) and promising AI startups. Compared to that, Canada has a modest concentration of businesses built around AI products and services, or companies that are pioneers in AI.
Still, there are many Canadian companies, from both the tech and other sectors, that might be perfectly positioned to take advantage of the AI tailwinds sweeping through the market. Two of them stand out from the rest.
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A business information services company
Thomson Reuters (TSX:TRI) originated in the newspaper business. The company has adhered to its pedigree and emerged as one of the most significant information conglomerates in the world. However, a big part of its business is specialized services and tools (products) for professionals from specific industries, predominantly legal and taxation.
Many of its products are now augmented with generative AI, allowing them to serve their user base more effectively. The company is investing heavily, even aggressively, in AI, ensuring that its products remain competitive in their respective niche markets. AI adoption might be one of the factors behind its 6% revenue increase in the second quarter of the year.
The stock is currently trading at a modest discount of 9.2% from its yearly high, which is not enough to put it among undervalued stocks.
The decline started way earlier than the current market slump, but that slump will push the stock down further, so if you are planning on buying it at an even better price, it might be a good idea to wait to buy till later in the month. Even with that dip, the five-year returns of the stock were over 134%.
An e-commerce company
Shopify (TSX:SHOP) is one of the few Canadian tech giants with a massive global reach. It’s among the largest e-commerce companies in the world and, at one time, was the most valuable publicly traded company in Canada.
However, the stock experienced a significant correction, losing over 83% of its value at one point, and it’s still in the process of recovering from that slump, though the recovery trajectory has been far from straight.
The company has made many changes in its business model/platform as well, and AI is a big part of this overall change. In addition to integrating AI functionalities in the core Shopify platform, the company is also experiencing a surge of AI apps and tools in the Shopify ecosystem.
Assuming that all AI additions to the platform, whether company-owned or leveraged from third-party creators, become the catalyst for a new era of market dominance, investors might experience a growth surge similar to what defined the early days of Shopify’s rapid rise.
Foolish takeaway
From tech stocks like Shopify to information-oriented businesses like Thomson Reuters, several publicly traded entities might experience exceptional organic growth thanks to AI. Adding them to your portfolio at the right time might allow you to capitalize on that growth and leverage the entire length of the bullish trend.
