When searching for an artificial intelligence (AI) stock that could be the best bargain in the market right now, the key is to look beyond hype. Instead, focus on real-world profitability, scalability, and staying power. AI stocks have become one of the most talked-about investment themes in years, but not every company with “AI” in its pitch is positioned to win. The real bargains are those quietly integrating AI into their operations or offering infrastructure and software that make AI possible. All without trading at nosebleed valuations.
Considerations
The first thing to consider is what kind of AI exposure you’re actually buying. Not all AI stocks are built the same. Some, like chipmakers or data centre providers, supply the “picks and shovels” that power the industry. Others, like software firms, use AI to enhance services, improve productivity, or sell AI-driven solutions. Infrastructure companies often offer more stable growth than speculative startups. The best bargains tend to come from companies with real revenue tied to AI adoption, not those banking on distant promises.
Valuation is the next big piece. Many AI stocks have soared on excitement rather than fundamentals, which makes it crucial to focus on price relative to earnings and cash flow. A company growing revenue by 20% but trading at 100 times earnings may be overvalued, while another growing 10% at 20 times earnings could be a genuine deal.
Another factor is the AI stock’s moat in the space. True long-term winners don’t just use AI, but own unique data, infrastructure, or algorithms that others can’t easily replicate. That could mean proprietary datasets, deeply integrated enterprise clients, or patented technology that scales efficiently. AI stocks with strong moats have far better odds of maintaining profits when AI competition heats up.
Consider Kinaxis
Kinaxis (TSX:KXS) could be one of the most underrated AI bargains on the TSX right now. While the market has poured attention and premium valuations into U.S. giants, Kinaxis has quietly built a powerful, AI-driven supply chain platform that’s essential to how global companies operate. It’s profitable, growing, and embedded in industries that can’t afford inefficiency. Yet, after a period of volatility, the AI stock trades well below its historical valuation, offering long-term investors an opportunity to buy a real AI leader at a discount.
Kinaxis provides supply chain management and planning software to some of the world’s largest manufacturers, retailers, and life sciences companies. Its main product, RapidResponse, uses AI and predictive analytics to simulate supply chain disruptions and optimize decisions in real time. It’s practical, profit-enhancing technology embedded into mission-critical systems for companies like Ford, Unilever, and Johnson & Johnson.
Financially, the company is solid. In its latest quarterly results, Kinaxis reported revenue of US$136.4 million, up 15% year over year, with subscription revenue up 17%. Yet the AI stock trades at just 31 times future earnings and 7.4 times sales, well below pandemic highs. With recurring revenue climbing, profitability intact, and an expanding AI edge, the current price looks disconnected from its long-term potential. Especially when you add in a sticky customer retention rate above 95%.
Bottom line
In short, Kinaxis is the rare combination of growth, profitability, and AI depth trading below fair value. It’s not speculative, and it’s not priced for perfection. Instead, it’s a Canadian software leader with proven technology, real-world demand, and a balance sheet strong enough to keep innovating. Investors continue to chase the usual AI stocks at inflated valuations. Yet Kinaxis offers a high-quality business that’s already profitable, already using AI at scale, and quietly positioned to lead one of the most essential transformations in global commerce. For long-term investors, that makes Kinaxis one of the best AI bargains in the market today.
