How to Invest in Canadian AI Stocks for Long-Term Gains

AI stocks don’t have to be scary, risky, or any of that. In fact, these stocks are proving to be quite a necessity.

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 December 31, 2024 4:40 pm EST

Investing in Canadian artificial intelligence (AI) stocks for long-term gains is an opportunity to capture the growth of companies that are shaping the future with innovative technologies. Artificial intelligence is not just about robots or sci-fi anymore. It has become the engine driving advancements in supply chain management, cybersecurity, healthcare, and more.

Canada is home to several tech companies that have embraced AI to improve efficiency, offer smarter services, and carve out strong positions in their industries. If you’re looking to add AI stocks to your investment portfolio, there are a handful of standout stocks to consider demonstrating strong past performance, solid fundamentals, and promising growth outlooks.

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor. — Source: Getty Images

SaaS

Take Kinaxis (TSX:KXS), for example. Based in Ottawa, Kinaxis focuses on AI-driven supply chain management solutions that help companies streamline their operations. In its latest quarterly earnings, Kinaxis reported a solid 12% increase in total revenue, reaching $121.5 million, with Software-as-a-Service (SaaS) revenue rising by 16%. This uptick signals that more businesses are leaning on AI tools to solve global supply chain complexities, a trend that’s unlikely to slow anytime soon. With supply chain disruptions becoming a reality in our interconnected world, Kinaxis’ smart solutions are indispensable for companies looking to build resilience. Investors should note that Kinaxis operates in a niche market with a growing appetite for AI application, thus giving it a clear runway for long-term growth.

Docebo (TSX:DCBO) is another Canadian AI stock success story worth your attention. The AI stock specializes in AI-powered learning management systems, offering customized and efficient employee training solutions to businesses worldwide. As companies invest more in up-skilling their workforce, Docebo’s AI tools are well-positioned to capture this rising demand. The solutions use machine learning to tailor courses and monitor employee performance, thusly making corporate training smarter and more effective. Over the past few years, Docebo has seen steady revenue growth as it expands its enterprise client base. And with workplace training becoming a priority for many global firms, this trajectory is expected to continue.

For those interested in the booming digital healthcare industry, WELL Health Technologies (TSX:WELL) stands out. WELL Health has harnessed AI to power its tele-health platforms, electronic medical records, and patient diagnostics, making healthcare delivery more efficient and accessible. In Q3 2024, the AI stock reported a record-breaking 27% increase in revenue to $251.7 million, marking its 23rd consecutive quarter of growth. This kind of consistency is impressive, especially in the tech sector, and speaks to the resilience of WELL Health’s business model. By integrating AI into its core operations, the AI stock is helping transform the healthcare industry. All while carving out a leadership role in Canada’s health tech market.

The products

Then there’s Celestica (TSX:CLS), an AI stock known for its design and manufacturing solutions. These integrate AI to improve efficiency and meet the growing needs of data-driven businesses. In its recent earnings report, Celestica’s Connectivity and Cloud Solutions segment grew by a remarkable 39%, fueled by strong demand for data centre infrastructure and AI-driven technologies. As artificial intelligence fuels the need for better cloud infrastructure and smarter manufacturing processes, Celestica is set to benefit from this wave of technological adoption.

Even BlackBerry (TSX:BB), once synonymous with smartphones, has found new life as an AI-driven cybersecurity and Internet-of-Things (IoT) solutions provider. BlackBerry has made strategic moves to shift its focus to software – a shift that leverages machine learning to detect and prevent cyber threats in real-time. In its latest quarter, the AI stock saw a 9.8% year-over-year increase in revenue – proof that its pivot is paying off. As cybersecurity becomes increasingly critical in the digital age, BlackBerry’s AI-enhanced tools are a strong selling point for enterprises, especially those looking to safeguard their systems.

Bottom line

In the end, investing in Canadian AI stocks is about balancing growth potential with staying power. The AI stocks mentioned here are already proving their ability to thrive in a competitive market. And with artificial intelligence reshaping industries, there’s a lot to look forward to. These AI-driven companies have positioned themselves for a bright future. By being thoughtful and staying informed, you can build a strong foundation for long-term gains in the rapidly growing AI sector.