Most of the attention of investors is rightly placed on American Artificial Intelligence (AI), given the size and importance of these companies for the global weapon race, where AI seems to be trending. For investors who are looking for more picks under the radar in this sector, there are a few Canadian AI players that I have thought for a long time are undervalued in relation to their global counterparts and look outside at the current level.
Let us dive into the market in three top such players at the moment and why these shares are worth paying attention to (or adding for those investors looking for top growth shares).
Kineraxy
Supply Chain Management and Automation Company Kineraxy (TSX: KXS) has seen strong revenue growth in recent years, which has led to a recent stock of more than 12% in the course of the past 12 months, as shown in the graph below.
The strong basic principles of the company stimulate this growth, with increasing consumer adoption of the flagship Rapidresponse platform of the company that stimulates the premium valuation of Kinaxis.
Kinaxis is profitable, but at a price ratio of approximately 150 times it is certainly not the cheapest option there is. The point is that long-term investors want to benefit from the rising demand from AI-driven solutions that are supported by strong growth in the supply chain management space to keep buying. For that reason, this remains a top choice on my list of Canadian AI shares to consider now.
Buck
A Canadian AI stock that I didn’t touch much (but probably should) are based on Quebec Buck (TSX: CVO). The company specializes in AI-driven digital experience solutions for large customers such as Climb (Nasdaq: Adbe) and Salesforce (NYSE: CRM).
As a leading supplier of his AI-driven solutions for these great global technical players, Coveo’s software platform, which offers AI-driven search and relevant possibilities at company level, must continue to collect a premium multiple. Just like the other players on this list, the reality is that investors have to pay this growth today.
Despite the fact that the last year has produced a net loss, the company expects its revenue growth to accelerate to the level of 15% of around 6% last year. That is good enough to justify that investors of almost 50% have seen in the past year.
Of the three shares on this list, Coveo is perhaps my most compelling choice. Those who are looking for one overlooked AI growth stock in this area may want to take a closer look at this name.
Shopify
Shopify (TSX: Shop) remains one of my top growth sticks for long-term investors, in particular those who are looking for exposure to the mega trends in e-commerce and online shopping.
That said, Shopify has also become an important AI integrator, with the help of AI to improve its underlying e-commerce platform growth. As more companies (in particular at the larger end of the spectrum) are attracted to the One-Stop-Shop model from Shopify, I think this is a company that could have many growthycli for investors to look forward to in the coming decades.
Again, this is another expensive shares, but get investors what they pay for. In my opinion, investing in companies such as Shopify is that improve their offer with meaningful AI improvements where the majority of the value is likely to be built on this space in the long term.
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