When it comes to investment opportunities, there are two that come to the forefront. Those are, of course, artificial intelligence and clean technology. These are structural, long-term forces involved in changing the way Canadians consume, invest, and grow opportunities. But there are risks.
Clean tech shifts capital towards the energy transition, in which batteries and critical minerals are involved in supply chains. Meanwhile, AI is changing the way we go about our everyday lives, from productivity to automation, in every type of sector. Together, they can expand Canada’s comparative strengths and add new ways to invest.
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Clean tech
Clean tech is an ideal way to get into investing long term. This area of the market is involved in renewable power through wind, hydro and solar, along with storage and batteries. It also includes larger infrastructure, from electronic vehicle charging, hydrogen and fuel cells, to carbon capture and storage.
Canada already shines in these areas. We have the hydroelectric capacity, engineering know-how, and large pipelines, along with a huge mineral reserves that would be fundamental to batteries. This also leaves many ways for investors to get involved.
Whether it’s investing in utility and renewable infrastructure, mining companies, or even green bonds, there’s plenty of ways to start. The key will be watching projects that are capital-intensive, have long lead times and regulatory risks, or could be affected by policy changes.
AI
Then there’s AI, and this can be tricky given that the market has exploded in this area. Therefore, there are fewer opportunities available than in the past. Still, they do exist, as investors could get into the sub-sectors. These include enterprise software and cloud, AI middleware and model providers, semiconductor hardware, AI-enabled services, and even data and analytics.
Canada has many opportunities here, including deep learning research talent. There have also been many start-ups attracting global attention and venture capitalism. So it doesn’t have to be the most obvious form of investment to get into AI.
Instead, investors may want to consider firms that are adopting and monetizing AI. Yet again, it also could mean you invest in an exchange-traded fund (ETF) rather than find the company for yourself. Or you could simply go with service providers invested in data centres and infrastructure. The choice, in the end, is yours.
A great place to start
For a great place to start, consider Brookfield Renewable Partners LP (TSX: BEP.UN), a perfect intersection between clean technology and AI. BEP is a global owner and operator of renewable generation, with a large portfolio of hydro, solar and energy storage assets. Therefore it’s a direct play on the clean energy transition, but also through AI.
That’s because the company is now focusing more and more on AI by creating clean data centres and other infrastructure to support the growth of AI. This includes working with companies such as Alphabet and Microsoft to provide clean technology storage.
Yet the company still looks valuable, trading with a 0.81 beta. What’s more, investors can grab a solid dividend yield at 5.34%. Meanwhile, shares are still down from 52-week highs, though only slightly. Though as a long-term investment, it could provide massive returns coupled with income.
Bottom line
Clean technology and AI are clearly the future, but that doesn’t mean you need to find the next big thing or risky VC buy. Instead, investing in a solid powerhouse energy stock like BEP could provide all the growth and income you need.
