The Canadian stock market may be a tad light on the technology names, but the ones that do exist are more than worth investing in. In this piece, we’ll have a closer look at a few artificial intelligence (AI)-savvy stock picks that may just trade at more attractive multiples than some of the obvious and more popular U.S. names that hog the headlines on any given day.
Of course, Canadian investors shouldn’t stop at the Canadian AI stocks as we head into 2025. A solid mix of U.S. and Canadian AI firms may be the best choice, given some of the heavyweights (think the Magnificent Seven) are not only heavy on the cash but relatively cheap relative to the AI boom and growth runway it’ll accompany.
In any case, here are two intriguing AI stocks worth watching today and going into 2025. Though shares may not be timely enough to pick up at current multiples, a broader market pullback may grant investors a chance to score a lower price of admission. So, let’s get right into the names.
Celestica
Celestica (TSX:CLS) stock has quietly soared more than 222% this year, thanks in part to some pretty impressive quarters. As the firm looks to incorporate AI to help jolt its impressive service offering, the connectivity and cloud solutions segment could continue witnessing high double-digit growth for many quarters or even years to come.
Indeed, the electronics manufacturing services (EMS) firm has made a lot of waves this year. And though the $14.15 billion firm is still relatively unknown, I view the name as incredibly cheap for the magnitude of growth that could be on the horizon.
At writing, shares trade at 27.32 times trailing price to earnings (P/E), which is still quite low despite recent momentum and potential AI catalysts that could support the impressive rally. With the latest DS4100 switch made with AI data centre workloads in mind, there’s no telling where the firm heads as the AI boom continues heating up going into 2025 and beyond.
Kinaxis
Kinaxis (TSX:KXS) stock looks like a relative value play after rising a relatively muted 18.4% year to date. Despite making meaningful strides this year, the stock remains down over 26% from its all-time highs. The maker of supply-chain management solutions trades at 36.7 times forward P/E, which is a tad on the pricey side. That said, as the firm brings AI to its platform, there’s no telling how quickly sales growth could pick up.
Notably, the AI-leveraging Maestro platform stands out as a product that could help power shares out of their multi-year funk. Whether it’ll make the mid-cap $4.7 billion company a household AI name in Canada, though, remains to be seen.
Though shares of KXS are bound to be a rough ride, I view it as one of the more underrated AI plays for investors comfortable with betting on a smaller up-and-comer in the AI scene. In any case, I’d keep a close watch on Maestro in the new year. Perhaps it could act as a big share-driving catalyst.
