There are some wonderful tech companies in Canada, but there just aren’t that many of them. While some Canadian firms are generative artificial intelligence (AI) innovators that show tremendous promise, I’m still not against owning them, in addition to some of the high-tech AI plays in the U.S. market.
At the end of the day, you want to ensure your portfolio is sufficiently diversified, not just across sectors but geographies. And while the Canadian dollar isn’t in the best of shape, I still think some of the deals south of the border are worth consideration, even as some pundits become more cautious over somewhat extended multiples of names in certain corners of the tech scene.
In this piece, we’ll check in with two U.S. tech stocks that make sense for Canadian investors to consider buying on recent weakness. While it would be best if the loonie were to rally off recent lows (let’s say closer to US$0.75), I’d not be against incremental buying over time, not only to average down a stock’s cost basis should there be any trouble on the way for the market in the new year, but to potentially reduce the currency risks.
Indeed, it’s not the best of deals to exchange a huge chunk of loonies for greenbacks, especially if the Canadian dollar finds itself flirting with the US$0.69 as the Bank of Canada looks to lower interest rates at a potentially quicker rate than the U.S. Federal Reserve (or the Fed). In any case, here are two U.S. innovators that are worth watching, and perhaps they are nibbling a little before the holiday season arrives and investors set their hopes high for some sort of bullish Santa rally.
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Amazon
Amazon (NASDAQ: AMZN) is a fantastic AI innovator that recently rolled out its AI chatbot Rufus to the Amazon shopping app. Indeed, the new chatbot can help answer a slew of questions that buyers may wish to have addressed before they hit that checkout button.
Though Rufus may not be a game-changer upon release, I think it’s a step in the right direction. Who knows? Perhaps the bot could help jolt sales and consumer loyalty over the long run if it proves useful in making suggestions, recommendations, and answering details about specific products.
Aside from the e-commerce business, which has been looking up of late, the Amazon Web Services (AWS) business stands out as intriguing as the cloud titan looks to be ready for more AI-induced upside. All considered, you’re getting a lot of impressive high-tech exposure from the name at a price that I view as quite reasonable after the latest dip.
The stock is down 8% from its recent high, thanks in part to regulatory probe jitters from the E.U. that could be in store for 2025. Additionally, if the U.S. Department of Justice (DoJ) starts getting more on the e-commerce behemoth’s back, investors may rush to the hills. Indeed, nobody knows just how hard the DoJ will go after America’s tech titans. Arguably, I think the DoJ worries are severely overblown and are creating buying opportunities for long-term thinkers.
