There are Canadian artificial intelligence (AI) stocks out there, many of which may provide a slightly better value than the names trading south of the border. Indeed, the Silicon Valley darlings have and likely will continue to hog the limelight. That said, look for some of Canada’s top AI innovators to start gaining traction in the coming quarters and months.
Though the following name covered in this piece isn’t necessarily set to soar over the next 12-18 months, given shares have already rocketed by around 55% in the past two years, I think that for investors seeking AI appreciation over the next five to seven years stand to do very well by hanging onto the stock as the so-called AI boom (or race) advances a step closer towards AGI (or artificial general intelligence).
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The generative AI race is on: Many Canadian firms are looking to get in on the action
Indeed, there aren’t many AI pure-plays to pick from on the TSX Index. What there are, however, are a slew of underrated AI beneficiaries that are harnessing the full power to be had in their data sets.
In this piece, we’ll take a closer look at Thomson Reuters (TSX:TRI), a media firm that’s more of an AI play, given how the firm has been allocating funds of late. While not a pure AI play like some of the U.S. mega-cap tech titans surging south of the border, TRI stock does have a lot to gain as it continues to swim forward in the field of generative AI.
Making smart deals and partnerships will bolster Thomson Reuter’s AI moat
The company has been making many smart deals and partnerships with various tech-savvy firms. Whether we’re talking about a collaboration with massive tech titans or the purchase of the hidden gem of an AI firm in Casetext, it’s becoming apparent that Thomson Reuters may have more skin in the generative AI game than originally anticipated.
Sure, you may know the firm best for its media coverage. However, with a huge data advantage and an AI strategy that could pay massive dividends over time, I think the stock is worthy of a much higher multiple than is being commanded right now.
At the time of writing, shares of TRI trade at 32.65 times trailing price to earnings (P/E). That’s a somewhat rich multiple historically. That said, given the magnitude of growth that Thomson Reuters could unlock with every major AI-focused acquisition, it becomes clear that such a multiple is not only well-deserved but perhaps a tad too low.
The road ahead for the underrated AI gem
Moving ahead, look for the company to continue scooping up AI startups that show promise or team up with the biggest, most influential AI forces on the scene. Undoubtedly, investing in organic innovation is also important. On that front, Thomson Reuters is very much on the right track as it looks to upskill its workforce on the transformative technologies that will reshape the future of media and work.
