Big tech stocks in the United States are dominating the artificial intelligence (AI) narrative, followed closely by companies in China. However, there are a few AI stocks in Canada that are flying under the radar in October 2025.
Valued at a market cap of $5.2 billion, Kinaxis (TSX:KXS) is one such company that is part of the AI segment, which is expanding at a rapid pace. Kinaxis provides cloud-based supply chain management software called RapidResponse, an AI-powered platform for end-to-end supply chain orchestration.
The software helps companies with demand planning, inventory optimization, production scheduling, transportation planning, and supply chain visibility.
Kinaxis serves industries including aerospace, automotive, consumer products, high-tech electronics, industrial manufacturing, life sciences, logistics, and retail across global markets.
The TSX tech stock went public in 2014 and has since returned over 1,300% to shareholders. Despite these outsized returns, the mid-cap stock is down 20% from all-time highs, allowing you to buy the dip.
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The bull case for the Canadian AI stock
Kinaxis delivered strong second-quarter results with total revenue reaching US$136.4 million, up 15% year over year, while software-as-a-service (SaaS) revenue grew 17% to US$88.4 million. The company reported a record adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of US$33.7 million, representing a 25% margin and marking its fourth consecutive quarter of achieving a Rule of 40 performance.
The quarter represented Kinaxis’s best second quarter ever for new business signings and the second-best outside of any fourth quarter. Annual recurring revenue climbed 15% year over year to US$391 million, with new customer wins split evenly between new accounts and expansion business. Notably, applications and scenarios accounted for over half of expansion orders for the fifth consecutive quarter, reflecting strong demand for the company’s newer planning solutions.
Kinaxis added several notable enterprise customers during the quarter, including Lactalis, the world’s largest dairy company with over US$35 billion in revenue, McKee Foods, Shimadzu, and SEKO Logistics. Three of Gartner’s four “Masters of Supply Chain” for 2025 are now Kinaxis customers, validating the company’s competitive position.
Management highlighted the improvement in execution under its restructured go-to-market organization, with higher win rates and better pipeline conversion. The company added over 40 people to its sales capacity and strengthened second-level management across key regions, including Japan, Europe, and Germany.
On the product front, Kinaxis is rolling out new generative and agentic AI capabilities through its Maestro platform, working with select early innovator customers. The company partnered with Databricks to build a supply chain data fabric and agentic AI framework, positioning itself for what management describes as a shift toward more autonomous supply chains.
Software margins hit 80% for the second consecutive quarter, up from 74% a year ago, driven by efficient operations and lower amortization. Professional services margins declined to 23% from 27% due to more competitive market conditions and a strategic shift toward partner-led delivery, with partners now leading over 70% of new implementations.
What is the price target for KXS stock?
Management has raised its fiscal 2025 SaaS revenue growth guidance to 13% to 15%, up from previous expectations, while maintaining total revenue guidance of US$535 million to US$550 million and adjusted EBITDA margin guidance of 23% to 25%.
Analysts tracking the TSX tech stock forecast revenue to increase from US$483 million in 2024 to US$1.1 billion in 2029. During this period, adjusted earnings are projected to grow from US$2.36 per share in 2024 to US$8.50 per share in 2029. If KXS stock is priced at 30 times forward earnings, which is a reasonable valuation, it should gain 100% within the next four years.
