The artificial intelligence (AI) industry in Canada is growing rapidly. As such, it should surprise no one that several domestic businesses are becoming prominent players in the international scenario.
These Canadian AI champions are advancing technical innovation and providing exciting investment opportunities right at home and around the world. The technologies these companies put forward span everything from enterprise information management to digital customer experience solutions.
Here’s why these three Canadian AI champions certainly look like companies worth considering for the long term.
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OpenText Corporation
OpenText (TSX: OTEX) is a leader in enterprise information management, providing software solutions that enable organizations to manage, secure, and leverage their unstructured data. OpenText offers a wide range of products to meet different information management requirements, such as customer experience management, business process management, and content management. The company’s software programs assist government organizations and big businesses in managing enormous volumes of content, guaranteeing legal compliance and improving operational effectiveness.
The software giant reported US$1.45 billion in revenue for the third quarter of its fiscal year 2024. That number was good for 16% year-over-year growth. Indeed, this solid growth continues to be driven by the company’s new AI capabilities and high customer demand for information management solutions. Thus, for investors seeking a Canadian tech stock with AI exposure, here you go.
The company also finished selling off its AMC/Mainframe division to increase its capital flexibility. The net revenues from this sale were used to pay off US$2 billion in debt. OpenText continues to reward shareholders with a dividend yield of 4% and has announced a share-buyback program worth US$250 million.
Constellation Software
Constellation Software (TSX: CSU) has built a reputation as a savvy acquirer of software companies, focusing on vertical market software businesses that cater to specific industries. Since its founding in 1995, Constellation has purchased more than 500 companies using a decentralized management and long-term ownership approach. Since its first public offering in 2006, the company’s stock has increased thirtyfold, demonstrating the significant growth that this strategy has enabled.
Constellation was able to seek more significant acquisitions in March 2022, when it paid $700 million to acquire Allscripts’s hospital business arm. The company’s steady profitability and diverse portfolio make it an appealing choice for long-term investors looking to gain exposure to the software and artificial intelligence industries.
And with a growth-by-acquisition model like this, there’s plenty of scalability upside investors can glean from owning this name long term.
Telus
Telus (TSX: T) is a Canadian multinational conglomerate offering a range of services, including telephony, television, data, and internet services through Telus Communications Inc. Additionally, the firm runs Telus Digital, which provides IT services and digital customer experience outsourcing, and Telus Health, which offers health products and services.
Telus has taken the initiative to incorporate AI into its business processes, especially in its Telus Digital subsidiary. The business uses AI to improve network performance, create cutting-edge health solutions, and improve customer service. In addition to increasing operational effectiveness, Telus’s strategic emphasis on AI establishes the company as a progressive leader in the telecom sector.
Telus reported $2.362 billion in operating income and $20.116 billion in sales in 2023. Because of its dedication to innovation, diversification, and strong financial performance, the company is a desirable option for investors hoping to profit from the development of AI technology.
