Artificial intelligence (AI) stocks haven’t been quiet when it comes to massive gains. Practically anything even slightly using AI has been dubbed an AI stock and seen as an opportunity investors won’t want to miss. However, there are still opportunities that are less about AI and more about support.
That’s why today, we’re going to go big, looking at how the larger picture can influence AI gains and stocks that could benefit.
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The surge
First, let’s look at those areas that could benefit from a surge in AI. Here, we can go straight to the top, with Canada itself being an advantage as a research foundation. Universities have been early leaders in machine and deep learning, creating a rich talent base that’s attracted AI labs from some of the Magnificent Seven companies.
What’s more, Canada benefits from business-to-business and infrastructure sectors. These include finance, logistics, energy and natural resources. These are ripe for a quiet revolution in AI, from optimizing supply chains to automating maintenance.
Then there’s the infrastructure demand. Building a digital backbone for AI through data centres, renewable power, and semiconductors plays right into Canada’s strengths. As these expand, Canada can provide the necessary room for future growth. So, now, let’s look at two stocks offering it already.
BIP
Brookfield Infrastructure Partners (TSX:BIP.UN) is going to be a clear winner through AI gains. The infrastructure asset manager and operator owns a globally diversified portfolio that includes transport, energy, communications, and, yes, data infrastructure.
The growing demand for data centres and cloud computing capacity has positioned BIP well for future growth. This has already occurred through heavy investments in AI across Europe and elsewhere. In fact, its energy and power infrastructure can help supply further growth within the sector.
During the second quarter, growth was already seen with BIP reporting net income of $69 million and funds from operations of $638 million, up 5% year over year. It also increased its dividend by 6% to US$0.43 per unit. So, while investors wait for this infrastructure stock to rise higher, they’ll be paid out for their patience.
DIR
Another company that could benefit from AI is Dream Industrial REIT (TSX:DIR.UN). The real estate investment trust (REIT) owns, manages and operates light industrial, distribution, and logistics properties across Canada, the United States, and Europe. This focus on light assets creates steady and easy to manage long-term growth.
During recent earnings, the company showed more strength in the second quarter. Diluted funds from operations (FF) were up 4% to $0.26 per share, with net operating income at $100.3 million, a 5% increase. Furthermore, it signed over 3.3 million square feet of new leases and renewables. And with net rental income at $94.7 million, the company looks stronger than ever.
Here, AI is more of an indirect beneficiary, which is why it could be a hidden gem. As AI workloads grow, data centres expand, and support is needed. This creates demand for industrial and logistics real estate near AI and tech hubs. Furthermore, it’s a solid last-mile logistics REIT near urban centres, so it can easily benefit from any automated ecommerce, demand forecasting, and supply chain precision.
Bottom line
There’s a lot of upside to be had here in Canada in terms of AI, but it’s not always about going straight to the top. Everyone else has done the same, so now it’s about thinking smarter and finding efficient ways for companies to benefit from AI. So, while gains may not show up in headlines, they’ll certainly show up in your portfolio.
