Hidden Gems in Canada’s AI Landscape

Uncover hidden AI stock gems on the TSX that offer growth potential beyond the hype that are ripe for smart investors.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published October 12, 2025 9:45 am EDT

| More on: CMGENGH

Key Points

Enghouse Systems leverages AI for business solutions, boasts a strong balance sheet, and offers a modest dividend.
Computer Modelling Group specializes in reservoir simulation for oil and gas, making it a niche AI play with high switching costs.
Both stocks are conservative AI investments, with recent earnings dips making them attractive at current levels.

It’s no secret that artificial intelligence (AI) is the massive elephant in the room, sitting amongst a slew of traders day in and day out. It can make many of us feel that we’ve missed the boat when it comes to AI stocks. However, there can still be a method of finding hidden AI stock gems in the madness.

While some companies are shouting loudly, the most “pick-me” of the bunch, others are quietly building, powering, or enabling the systems behind them. Looking beyond pure AI, focusing on data control, following the infrastructure trail or checking partnerships are great ways to find these gems. Today, we’re going to look at two AI stocks to consider.

visualization of a digital brain — Source: Getty Images

ENGH

First, we have Enghouse Systems (TSX: ENGH), an enterprise software and services company operating through Interactive Management Group (IMG) for customer interaction and asset management for operational support systems. These use AI, analytics and automation to bring businesses together.

The AI stock has expanded both organically and through acquisitions, with third-quarter results proving its strength. Many of its results missed analyst estimates, leading to a stock drop. That being said, it remains a top choice for a number of reasons.

The AI stock maintains low debt and a strong balance sheet, and even declared a $0.30 quarterly dividend. Furthermore, analysts see modest growth in the future. That’s especially thanks to its recurring revenue and software as a service (SaaS) base. With a solid acquisition pipeline, organic growth, and a dividend yield as a buffer, it’s an AI stock that could be a hidden gem waiting to sparkle.

CMG

Next, we have Computer Modelling Group (TSX: CMG), a software and services company focusing primarily on oil and gas, especially reservoir simulation. This specificity makes it a niche play, embedding AI and analysts inside the energy industry. Yet again, we have an AI stock investors might be missing thanks to recent earnings.

The company’s first quarter results saw total revenue drop by 3% year over year, though recurring revenue increased by 7%. Furthermore, free cash flow (FCF) fell by 22%, with market uncertainty impacting the business. Yet the company’s domain moat and specialization are something that cannot be ignored. Switching costs are high, so while the AI stock needs to work for new business, once businesses get on board, switching costs are high, making the stock quite sticky.

What’s more, it’s cheap! The AI stock trades at just 24 times earnings, quite inexpensive compared to other AI stocks. Furthermore, it holds a nice little 0.63% dividend yield as of writing. Not much, but still something many other AI stocks don’t even offer. And with a 0.08 beta, it’s a conservative way to get into the AI sector.

Bottom line

Not all AI stocks are risky investments. In fact, these two are downright conservative. Plus, each is coming off earnings that led to a drop that makes them valuable at these levels. So, if you’re looking for some hidden gems ready to shine, consider these on the TSX today.