The artificial intelligence (AI) revolution is well underway, and while much of the hype has been around U.S. tech giants, some Canadian AI stocks are also showing strong potential. With AI adoption accelerating across multiple sectors, companies that offer innovative AI-powered solutions could see exponential growth in the years ahead.
Some Canadian companies are already leveraging AI to improve their efficiency, enhance data analysis capabilities, and drive automation, setting them up for sustained growth. In this article, I’ll break down two top AI stocks on the TSX that could be poised for significant gains as the AI boom continues in 2025 and beyond.
Source: Getty Images
OpenText stock
If you’re looking for a Canadian AI stock with solid fundamentals and long-term potential, OpenText (TSX:OTEX) should be on your radar. This Waterloo-based tech company mainly focuses on information management, offering enterprise software solutions that help businesses streamline operations and harness AI-powered analytics.
OTEX stock currently trades at $38.07 per share with a market cap of $10.1 billion. For income-focused investors, it also pays a quarterly dividend with an annualized yield of around 4%.
In the most recent quarter ended December 2024, the tech firm generated US$1.33 billion in revenue, with cloud revenues up 2.7% YoY (year over year). While OpenText’s total revenue declined YoY due to a prior divestiture, its profitability remained strong. Its adjusted quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 13% sequentially to US$501.5 million. As a result, it maintained a strong 37.6% adjusted EBITDA margin, showing its ability to keep profitability intact despite macroeconomic challenges.
However, what makes OpenText even more attractive is its continued push into AI and cybersecurity. The company just launched an AI-driven security platform called Core Threat Detection and Response, designed to help businesses defend against cyber threats more effectively. With AI integration into its cloud and cybersecurity offerings, OpenText stock could benefit from rapidly increasing demand for automated threat detection and advanced data management solutions.
Kinaxis stock
When it comes to AI-driven growth, Kinaxis (TSX:KXS) is another Canadian tech stock that deserves attention. This Ottawa-based tech company specializes in AI-powered supply chain management. It primarily helps companies optimize logistics, forecasting, and inventory through its AI-infused Maestro platform. Currently, KXS stock trades at $152.66 per share with a market cap of $4.3 billion.
Kinaxis wrapped up 2024 on a strong note as its total annual revenue rose 13% YoY to US$483 million, while its software-as-a-service revenue surged 17% from the previous year. The company hit a record for new business wins, showing that demand for its AI-driven supply chain tools is only growing. More importantly, its profitability is also improving. Last year, Kinaxis posted a 42% YoY jump in its adjusted EBITDA to US$106 million, pushing its margin to 22% from 18%.
To make supply chains smarter, faster, and more predictive, Kinaxis now plans to expand its focus on generative AI and agentic AI capabilities. With AI adoption accelerating globally, KXS stock could see solid gains in the long term.
