Everyone wants a piece of the artificial intelligence (AI) trade, but most investors are chasing a handful of tech stocks south of the border. But before any AI model can run, someone has to design, wire, cool, and power the building that houses it.
Tech companies are investing hundreds of billions of dollars into concrete, steel, transformers, and cooling systems. Industry estimates put global hyperscaler infrastructure spending on track to exceed US$650 billion, a figure that continues to rise as AI workloads grow more power-hungry.
A data center built for AI needs far more electricity than a typical office building, as well as advanced cooling loops and a design capable of handling enormous heat loads.
Here are two top Canadian AI stocks that are poised to benefit from the AI data centre buildout. The two companies supply the physical infrastructure that every data centre needs. Let’s dive deeper.
Source: Getty Images
The bull case for this TSX tech stock
Hammond Power Solutions (TSX: HPS.A) manufactures power transformers. These devices raise or lower electrical levels so that electricity can safely flow to servers, motors, and other industrial equipment. Data centres need a lot of these transformers, and Hammond’s recent results clearly show that demand is high.
- In the first quarter (Q1), Hammond Power reported revenue of $264.8 million, an increase of 31.5% year over year.
- Chief Executive Officer Adrian Thomas told analysts that data center activity continues to be a meaningful contributor, driving both volume and a richer mix of custom products.
- Chief Financial Officer Richard Vollering noted that gross margin improved sequentially to 30.1% from 29.2% in the fourth quarter, even as tariff-related cost pressures continue to work through the business.
Further, Hammond is expanding capacity in Mexico and evaluating where to locate its next factory, with a decision expected later this year, given the long lead time to build new plants.
Layer in the pending acquisition of AEG Power Solutions, expected to close shortly, and Hammond looks like a company scaling deliberately into a demand wave rather than reacting to it.
The bull case for this top TSX stock
Stantec (TSX: STN) is an Edmonton-based engineering and design firm, and modern data centres are among the complex projects it specializes in.
Data centres require substantial power allocations, liquid cooling systems, and structural engineering designed to handle high thermal loads.
Stantec also brings deep water management expertise, a real advantage given how much water large data centres consume for cooling and the regulatory scrutiny that comes with it. That combination positions the firm to win consulting and engineering work as hyperscalers redesign facilities for dense AI clusters.
At its annual meeting on May 14, CEO Gord Johnston told shareholders that Stantec is actively incorporating AI tools across its own operations, saying the company sees AI as enhancing its margins.
It is a useful reminder that Stantec benefits from AI in two ways: as both a service provider to the industry and an internal user of the technology.
The Foolish takeaway
I like both of these Canadian stocks, and for similar reasons. Neither one carries the sky-high valuation attached to the best-known AI chip and software stocks, yet both sit right in the path of the same spending wave.
Hammond gives investors direct exposure to the electrical equipment that data centers cannot function without, backed by record sales and a growing backlog.
Stantec offers a capital-light way to ride the same trend through design and engineering fees, without taking on the technology risk that comes with owning hardware makers.
For investors building a portfolio around the AI infrastructure theme, both TSX stocks deserve a spot on the watch list, and long-term investors may want to begin building a position while the market remains focused elsewhere.
