The world of artificial intelligence (AI) stocks continues to grow, with investors now presented with an array of growth stocks in this sector worth considering.
Depending on an investor’s individual views, it’s unfortunate that top Canadian and other global stocks are relatively overlooked in this AI race. In my view, there’s plenty of room for growth outside of the U.S. In fact, I’d argue that the valuations of many top global AI stocks could lead to better long-term performance, for those who are willing to be selective with their choices in this sector.
Here are three of my top picks worth considering right now for those with a truly long-term investing time horizon.
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Kinaxis
Kinaxis (TSX: KXS) has been one of the top Canadian AI picks on my radar for some time. There are good reasons for this.
First, the company’s core supply chain management solutions business has been strong, with growth continuing to come in at the high-teens in recent quarters. I’d argue that most of this growth is organic, with some uptick tied to the company’s integration of some compelling AI-driven solutions. And over the long-term, these future AI integrations could drive even more meaningful growth over time.
The company’s stock price has not necessarily reflected this growth potential, at least not yet. Thus, I’d argue that any gains the company is making right now are likely not priced into KXS stock.
So, for those looking for a company with an EBITDA margin of 25%, strong partnerships and growth potential thanks to AI-enhanced revenue streams, and solid long-term growth regardless of whether AI is a hit or not, Kinaxis is certainly worth considering.
Docebo
Shares of Docebo (TSX: DCBO) have done anything but display a surge of interest around AI of late. In fact, the company’s stock chart shown below is one I’d classify as ugly.
Some of this has to do with waning interest in online learning platforms, such as those provided by Docebo. That said, I would argue that the company’s mostly subscription-driven business is attractive, as are the company’s EBITDA margins (around 20%).
The question right now is whether its AI-powered learning platform can benefit from accelerating top-line growth. Further, the question is whether any acceleration in Docebo’s top line will bleed into its bottom line.
So, I’d say Docebo is a higher-risk pick on this list, but it’s likely the stock with the greatest upside. If Docebo can achieve new all-time highs, that’s 300% returns for patient investors willing to buy this dip.
Shopify
Last, but certainly not least on this list of Canadian AI beneficiaries, we have to talk a bit about Shopify (TSX: SHOP).
Shares of the Canadian e-commerce platform provider have absolutely skyrocketed over the course of the past year, with the company making a new all-time high. This move has once again placed Shopify atop the market capitalization leaderboards in terms of Canadian stocks, so this is a company that’s certainly not flying under the radar.
But for global investors looking for exposure to a company that may not only benefit from AI and the growth expected from this space, but also strong underlying structural growth trends driven by rising e-commerce share of overall consumer spending, this is a stock worth considering.
With incredible growth prospects (AI-powered search driving an 11 times surge in orders this past quarter), I’m more than intrigued by this company’s upside over the long term.
