The artificial intelligence (AI) bull market will not stop anytime soon because even though most investors don’t fully understand the AI technologies they are investing in, the momentum is too significant and substantial to ignore.
This is also true for many stocks representing companies that are purely AI-oriented or built around an AI product and, to an extent, other companies that are not built around AI but have integrated it extensively enough or serve a significant purpose in the AI economy.
The semiconductor giant Nvidia from the U.S. and a novel AI hardware solution provider, POET Technologies, are examples of the latter. But there are many AI stocks, or more accurately, tech stocks, that have repositioned themselves for the AI market and are still flying under the radar. Two such stocks might be poised for significant gains in 2025.
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A digital experience company
Coveo Solutions (TSX: CVO) was established in 2004 and joined the stock market at the end of 2021. From the beginning, the company has been around developing digital experiences for a wide range of businesses and offering a range of solutions built around this business stream.
It also claims to have been a company in the AI space for at least a decade, which indicates that it has been an area of focus for it for 10 years, making it a mature player in the industry.
They offer an AI-powered digital experience platform to a range of businesses and have an impressive portfolio of corporate clients.
However, these strengths haven’t genuinely manifested in the stock’s performance yet. It experienced a few bullish runs, but they didn’t last long. It’s trading at a 62% discount from its inception price. But things might be changing for the better. The stock is steadily improving its financials, has recently expanded its partnership with SAP, and is trading way below its target price, as per multiple experts.
A customer experience company
Telus Digital (TSX: TIXT), formerly Telus International, focuses on customer experiences (CX). This makes their offering similar to Coveo, which means similar AI opportunities, but there is an AI differentiator as well. They offer AI data solutions to businesses to help them train their AI models, a service highly in demand in today’s market. This is also the most rapidly growing revenue segment for the company.
Despite its strong operational prospects, the stock has been weak since inception and is currently trading at a brutal 88% discount from its price at the inception. It experienced another slump following a fact-checking news announcement by a social media giant.
However, one thing that gives us hope that the stock is ready for gains (other than its AI focus) is significant insider trading (both individuals and parent companies). A concerning fact is that less than 2% of the company is held by individual traders; the rest are private companies and institutions.
Foolish takeaway
The two tech stocks are brutally discounted right now despite their heavy overlap phase. They also have similar core focuses (digital/customer experience). The chances of these stocks gaining traction in 2025 are decent, but if they do, the level of returns the stocks might offer can be quite significant.
