Too Much U.S. Tech? 1 TSX Stock I’d Add Today

Too much U.S. mega-cap tech can backfire fast, so Kinaxis offers Canadian software growth with a different risk profile.

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 February 12, 4:20 pm EST

| More on: KXS

Key Points

Kinaxis sells supply-chain planning software, giving you tech exposure tied to business operations, not consumer trends.
Its recent results showed steady growth and rising profitability, suggesting a compounding business rather than pure hype.
The next big test is Mar. 4 earnings and guidance, since the valuation needs continued progress to hold up.

Too much U.S. tech can feel like a winning strategy right up until it doesn’t. When a handful of mega-cap names drive most of your returns, your portfolio starts to behave like one crowded trade. A rate surprise, an artificial intelligence (AI) spending wobble, or a regulatory headline can hit everything at once. The problem isn’t U.S. tech itself. The problem is concentration, currency exposure, and paying peak prices for growth that must stay on track. So how do we get around it?

container trucks and cargo planes are part of global logistics system — Source: Getty Images

Consider Kinaxis

Kinaxis (TSX:KXS) offers a different flavour of tech without leaving Canada. It sells supply-chain planning software that helps large companies decide what to make, move, and stock when demand changes. That sounds dry, which is good. Businesses buy it to avoid stockouts, reduce waste, and react faster when the world gets messy. In a year when disruption still lingers, that kind of software stays relevant.

Over the last year, the story around Kinaxis has leaned into focus and product momentum. It kept positioning its platform as mission-critical for manufacturers, consumer brands, and industrial firms that cannot afford planning mistakes. It also leaned into AI features inside its tools, which gives it a way to ride the AI theme without depending on ads, phones, or chips.

The market also has a clear near-term catalyst on the calendar. Kinaxis plans to report fourth-quarter and full-year 2025 results after markets close on Mar. 4, 2026. Guidance often drives the next leg for software names. If it shows steady demand and confident targets, investors can reward it quickly. If customers hesitate, the tech stock can reprice just as fast.

Recent earnings

Now the numbers. In the third quarter of 2025, Kinaxis reported total revenue of US$134.6 million, up 11% year over year. Software as a service (SaaS) revenue rose 17% to US$92 million, which matters because SaaS tends to be stickier than services. Profit climbed to US$16.8 million, or US$0.58 per diluted share, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 13% to US$33.9 million, keeping the margin at 25%.

Those figures show why the tech stock can act like a stabilizer in a tech-heavy portfolio. The supply chain software firm is focused on renewing contracts and expanding within its existing customer base. When SaaS grows and profitability improves, it looks more like a compounding business than a momentum trade. The catch is that big deals can shift between quarters, and services can stay lumpy, so patience still matters.

Looking ahead, the thesis is straightforward. Supply chains still need rebuilding, and planning software sits at the centre of that work. If global companies keep investing in resilience, Kinaxis can keep winning new customers and expanding usage. If the economy slows, some clients can delay rollouts, which can pressure near-term bookings even if the long-term needs stay intact. This is not a “recession-proof” name, but it can be steadier than consumer-driven tech.

Foolish takeaway

So, could this tech stock be a buy for someone trying to step away from too much U.S. tech? It could, because it gives you Canadian-listed software exposure tied to enterprise operations, not consumer mood, and recent profitability trends look encouraging.

It could also be a pass if you want a bargain today, because the valuation still demands progress. If you want one simple move, adding a high-quality TSX compounder like Kinaxis can diversify your tech risk while keeping growth in the mix. Pair it with a bank or utility, and you can smooth the ride without giving up upside.