Identifying the top opportunities in the artificial intelligence space is one thing. Putting one’s capital to work in such stocks is a whole other ball game.
After all, betting on some of these high-flying stocks can be terrifying right now. Given the valuations we’ve seen pop up in this sector, the gravity-defying multiples can certainly provide some investors with a serious sense of panic. That’s because in order for many top AI names to see continued share price appreciation, a lot of quarterly earnings beats will need to happen.
That said, I think a few Canadian AI stocks are worth keeping on the radar as companies that do have the potential to put together a flurry of earnings beats (while also carrying valuations that are slightly better than some of the most aggressive AI stocks out there).
So, without further ado, let’s dive into two of the top names in this space I’m watching right now.
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Kinaxis
Kinaxis (TSX: KXS) has been among my top picks for some time now, and there’s certainly good reason for this.
For one, Kinaxis has a business model centered around cutting-edge innovation for companies seeking world-class supply chain solutions. The company’s core software platform has provided steady growth over the long term. However, Kinaxis’ recent share price surge has as much to do with AI as it does the company’s strong underlying fundamental performance.
In fact, Kinaxis has posted strong results on this front, with the company posting 11% revenue growth this past quarter as its profit more than doubled on a year-over-year basis. That’s the kind of performance investors looking for an AI darling want to see.
With AI now playing a core role in Kinaxis’ flagship Maestro platform, investors looking to take advantage of the future benefits of AI in terms of improvements in predictive analytics and machine learning/agentic AI capabilities have to like how Kinaxis has integrated AI into its central offerings.
Docebo
The other Canadian AI stock I’ve been closely monitoring in recent months is Docebo (TSX: DCBO).
Shares of this e-learning solutions provider have not been on the same tear of late when compared to those of Kinaxis. However, the company has done a solid job of positioning itself as an AI-first leader in this space, which many expect to continue to grow at a rapid pace over time.
Of course, since the onset of the pandemic, the company’s stock chart has taken a similar shape to that of many companies which benefited directly from the pandemic. The rise of e-learning has faded somewhat, as “back to work/class” mandates have shifted how educators use online tools.
That said, I do think that over the long term, Docebo is a company that could see above-trend growth. That makes the company’s current share price attractive, particularly when put in context around its recent results. Docebo posted a more than 13% increase in subscription revenue year-over-year this past quarter. So long as those sorts of results continue, this is a stock that looks more than fairly valued presently.
