Missed Nvidia? 3 Picks-and-Shovels AI Stocks I’d Buy Instead

Three Canadian AI plays could offer income, growth, and hardware upside without paying NVIDIA-level prices.

Artificial intelligence (AI) stocks continue to be some of the most popular options for investors these days. We’ve all seen the benefits of AI in our daily lives, and that goes far beyond ChatGPT. It’s clear why a stock like NVIDIA (NASDAQ: NVDA) has been so popular and surged to become one of the largest stocks in the world.

Yet if you’re worried that you’ve missed the boat on AI stocks, there are still amazing options out there. In fact, some are still undervalued! So today, we’re going to look at why investors may instead want to consider these three AI stocks.

A robotic hand interacting with a visual AI touchscreen display.

Source: Getty Images

BIP.UN

First off, we’re going to look at what makes AI work in the first place, and that’s infrastructure. This is why Canadian option Brookfield Infrastructure Partners LP (TSX: BIP.UN) is a top choice. It provides you with exposure to AI, plus delivers a dividend yield.

And right now, it’s a great time to buy. During its most recent earnings report, BIP reported funds from operations (FFO) were up 5% year over year to $638 million, or $0.81 per share. This was driven by inflation-linked pricing as well as strong data and midstream performance. Yet more is on the way.

Colonial Pipeline, Hotwire FTTH, and a railcar platform are three growth catalysts to watch. Plus, it holds $1.5 billion in commissioned projects. Of particular interest? Data centres. Yet right now, the AI stock offers a 5.6% dividend yield you can’t get from other AI stocks. It’s therefore a great core investment for those wanting income, AI growth, and lower volatility.

WELL

Then we have an operator in an essential AI space. WELL Health Technologies (TSX: WELL) uses AI in the healthcare space, whether through e-documents or telehealth, it’s an area that’s only going to expand further. A driver of growth we’ve seen time and time again from WELL stock.

During the second quarter, WELL stock reported record results yet again, with revenue up 57% to $356.7 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) hitting $49.7 million, up 231%! Management has now increased its guidance for full-year 2025 to the upper half of between $1.4 and $1.45 billion in revenue.

The AI stock is, therefore, a great way to get into an area where AI adoption is only becoming stronger. It also holds a reasonable valuation, trading at just 11.5 times forward earnings per share (EPS). While there isn’t a dividend, the AI stock focuses on mergers and acquisitions (M&A). This allows you to continue seeing those record results again and again.

Celestica

Finally, we have Celestica (TSX: CLS), supporting that AI growth through hardware. While there is momentum, investors will be a bit more careful with this one because more momentum means more risk. Still, it’s a strong AI stock that seems to be operating at a solid click.

Most recently, the company’s second-quarter earnings reported a 21% increase in revenue to $2.9 billion and adjusted EPS at $1.39. Management also raised its guidance to $11.6 billion in full-year revenue. All this positive performance does mean one thing, though: it’s on the pricier side, trading up over 400% in the last year alone.

Still, if you want direct exposure to AI stocks, this is the biggest pure play. It gives you the same AI compute cycle as NVIDIA, with guidance for momentum to boot. Though if you’re looking for less risk, it might not be your safest option.

Bottom line

NVIDIA stock is a strong investment showing strong momentum, though for a high share price. Plus, it’s looking like a riskier option. If you want a balanced choice, go with BIP, a cheap stock. WELL is your best bet, or a Canadian momentum AI stock, Celestica offers that up as well. All together, this trio won’t replace NVIDIA, but can certainly help you get into the AI space with a better balance of income, valuation, and risk.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners and Nvidia. The Motley Fool has a disclosure policy.

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