Advertisement
Canada markets closed

  • S&P/TSX

    21,969.24
    +83.86 (+0.38%)
     

  • S&P 500

    5,099.96
    +51.54 (+1.02%)
     

  • DOW

    38,239.66
    +153.86 (+0.40%)
     

  • CAD/USD

    0.7316
    -0.0007 (-0.10%)
     

  • CRUDE OIL

    83.66
    +0.09 (+0.11%)
     

  • Bitcoin CAD

    86,334.13
    -1,896.30 (-2.15%)
     

  • CMC Crypto 200

    1,304.48
    -92.06 (-6.59%)
     

  • GOLD FUTURES

    2,349.60
    +7.10 (+0.30%)
     

  • RUSSELL 2000

    2,002.00
    +20.88 (+1.05%)
     

  • 10-Yr Bond

    4.6690
    -0.0370 (-0.79%)
     

  • NASDAQ

    15,927.90
    +316.14 (+2.03%)
     

  • VOLATILITY

    15.03
    -0.34 (-2.21%)
     

  • FTSE

    8,139.83
    +60.97 (+0.75%)
     

  • NIKKEI 225

    37,934.76
    +306.28 (+0.81%)
     

  • CAD/EUR

    0.6838
    +0.0017 (+0.25%)
     

AI Will Transform Everything: Investors, Be Early Adopters and Buy These 3 Stocks

Adam Othman
·4 min read
Businessman holding AI cloud
Image source: Getty Images

Written by Adam Othman at The Motley Fool Canada

Since the advent of apps like ChatGPT, artificial intelligence (AI) has rapidly become one of the most important trends in the tech industry. With AI-based innovations permeating across all sectors of the economy, businesses are finding faster and more efficient ways to perform tasks. Many might argue that the rise of AI can be considered the next big thing since the Industrial Revolution.

While ChatGPT is one of the most commonly known uses for AI, the technology has far more use cases and performs more essential functions for businesses otherwise. Many companies are already leveraging AI-based innovations to drive more growth. In turn, these companies offer more growth potential for investors to capitalize on.

ADVERTISEMENT

Today, I will discuss growth opportunities investors can explore with companies using AI.

U.S. tech giants in the AI space

Alphabet (NASDAQ:GOOG) is one of the biggest players in the AI space right now. With Gemini, the company has its own competitor for ChatGPT. While the company’s AI progress has been overshadowed by blunders during rollouts, it is only a matter of time before its vast resources, expert engineers, and knowledge will lead to more meaningful strides for the search giant in this space.

Besides its AI division, it owns YouTube, Google Cloud, Google Play app store, Fitbit, and several others. With its fourth-quarter (Q4) 2023 operating income jumping by 30% and revenue by 13% year over year, it can offer growth to investors through capital gains.

NVIDIA (NASDAQ:NVDA) might not be making waves in generative AI (GenAI) like Alphabet, but it is critical to the sector. The US$2.38 trillion tech giant manufactures the chips used by the GenAI industry. As an already leading chip manufacturer, NVIDIA has a monopoly over the chips being used by the industry.

Alphabet and others have tried competing with NVIDIA in this space. However, NVIDIA’s focus gives it the advantage of delivering more innovations that leave diversified companies competing in this space behind. As of this writing, NVIDIA stock is up by almost 260% in the last 12 months.

Trading at 79.63 times trailing earnings, it is not a value stock. However, TD Cowen analyst Matthew Ramsey believes that NVIDIA stock can go up to US$1,100 per share due to the growth of data centres powered by chips supplied by the company.

Kinaxis

Kinaxis (TSX:KXS) is a $4.28 billion market capitalization supply chain management and sales and management operation planning software company headquartered in Ottawa.

While it does not have anything to do directly with AI technology, the company is utilizing AI-based innovations to improve its operations. The company is using AI to help businesses track and interpret their supply chain metrics better.

Through Kinaxis’s RapidResponse AI, the company’s clients can track metrics like inputs, buying patterns, inventory, and much more, better. Additionally, data-driven AI solutions allow companies to get better supply chain metrics, such as expected inventory required. Before AI came into the picture, getting such metrics required countless hours of human labour for manual analysis.

As of this writing, Kinaxis stock trades for $150.26 per share, up 5.54% in the last 12 months.

Foolish takeaway

While giants in the U.S. tech industry are the obvious names investors think of when seeking AI stocks, more companies benefit from the AI revolution. With its presence in supply-chain sensitive and manufacturing industries, Kinaxis is an excellent example of a Canada-based AI stock you can consider adding to your self-directed portfolio to leverage growth due to AI-based innovations.

The post AI Will Transform Everything: Investors, Be Early Adopters and Buy These 3 Stocks appeared first on The Motley Fool Canada.

Should you invest $1,000 in Alphabet right now?

Before you buy stock in Alphabet, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $15,578.55!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 32 percentage points since 2013*.

See the 10 stocks * Returns as of 3/20/24

More reading

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Alphabet, Kinaxis, and Nvidia. The Motley Fool has a disclosure policy.

2024