Artificial intelligence (AI) and machine learning (ML) have increased due to the need to manage massive amounts of data for decision-making across industries and sectors. AI applications are utilized in industries such as finance, healthcare, supply chain, etc. Numerous market analysts predict that AI-based solutions and application developers will rise in the future.
Look for AI stocks that use artificial intelligence technology to enhance products or gain a competitive advantage. For many businesses, achieving a competitive advantage with artificial intelligence necessitates continuing expenditures in computation, networking, and data center infrastructure.
The best AI stocks to purchase are chipmakers, enterprise software companies, and technology behemoths that employ AI tools in several applications.
Table of Contents
What Is Artificial Intelligence?
Artificial Intelligence (AI) is a subfield of computer science that focuses on the development of intelligent machines. It comprises a collection of algorithms that can generate outputs without being specifically instructed to do so. AI is a human creation that is intelligent and capable of mimicking human actions and behaviors. In 1956, John McCarthy invented the term artificial intelligence at a Dartmouth University symposium.
AI has four main applications that can be interconnected:
Image Processing: Computers are capable of manipulating an image to either improve its quality or retrieve pertinent data from it.
Machine Learning: Without being expressly designed, machines can automatically learn and improve from experience and a big data stream.
Speech Recognition: Machines can comprehend the speaker’s voice and the words’ meaning.
Natural Language Processing (NLP): Natural Language Processing (NLP) refers to the ability of machines to not only read but also comprehend and interpret human language.
AI advancements enhanced efficiency by automating monotonous processes and replacing human labor with machines. Moreover, AI influences daily activities such as reading emails, obtaining directions, and receiving music recommendations.
What Are The Many Classifications of Artificial Intelligence?
In general, there are three types of AI:
- Narrow AI (also known as Weak AI)
- General AI (sometimes known as Strong AI)
- Super AI
Narrow AI refers to systems that have been developed and trained for a specific task. Checking weather reports, controlling smart home gadgets, and providing answers to inquiries that may be retrieved from a central database are examples of this. Siri, Apple’s virtual personal assistant, is an example of Narrow AI. On the other hand, narrow AI is incapable of independent thought, which explains why responses might often be incoherent.
In contrast, generic AI refers to a machine with human-like cognitive skills. Here, the system is able to comprehend the context and make decisions accordingly. Over time, General AI learns from experience and is able to use logic and creativity to make decisions in unknown situations or when no prior data is available.
Super AI is far more dystopian and has not yet been achieved. In this setting, machines would be capable of independent thought and consciousness.
What Are AI Stocks?
AI stocks are stocks of firms that have developed an AI-based product or provided AI-based services.
A larger definition would include all businesses that use AIs substantially to improve or add to their products or that are redefining/improving their products using AI.
This generates a significantly larger pool of prospective investments, including companies that may not be as dependent on AI as pure AI stocks. This distinction, however, is largely subjective.
What Is The Difference Between Artificial Intelligence And Robotics?
Before proceeding, we must clarify a common misunderstanding. The majority of investors consider artificial intelligence and robots to be synonymous. However, this is only partially accurate. Yes, artificial intelligence and robotics are complementary fields. However, they are not identical. Robots that can accomplish activities without human assistance or support are produced by robotics. In contrast, AI systems are designed to mimic the human mind and its decisions.
Consider a time when you were viewing a certain horror film. Next time, Amazon or Netflix will suggest comparable scary films. They are essentially employing AI to influence your decisions. However, AI is not confined to influencing what you eat, watch, and purchase. Consider the numerous applications of artificial intelligence.
Is AI A Good Investment？
One of the most frequently asked questions about AI stock is whether or not AI is a good investment. Indeed, AI is a booming industry across several sectors, and many businesses can benefit from AI. Because the AI business is expanding rapidly, investors in AI anticipate their investments will appreciate over the long run. 79% of financial bloggers are bullish about AI, compared to the average of 68% for the industry, according to recent statistics.
Whether AI is a good investment or not depends on your investment plan and the market climate. Despite the risks associated with investing in AI, a few excellent AI stocks are worth exploring.
What Particular Risks Do Artificial Intelligence Firms Face?
The greatest threat to businesses in this industry is competition. In addition to experiencing rapid development, sectors with a high growth rate also have the highest levels of competition. This type of competition might be risky for investors, as a large number of companies compete to make a profit with AI technology.
Many of the smaller and more affordable startups accessible for investment fail, and investing in the already-established names in AI is costly. You may invest in something promising in its infancy, only to have the company go out of existence six months later due to fast-moving competition.
Government regulation is a significant danger to AI stocks. As data and privacy protection rules become more stringent, certain IT organizations may be required to restructure and adapt, which may be time-consuming and costly.
Exciting as it is, artificial intelligence cannot advance without regulation. Governmental and business talks regarding consumer data privacy continue to evolve, and AI-interested investors must remain vigilant.
Best Canadian Artificial Intelligence Stocks
Fobi (TSXV)
Fobi, formerly known as Loop Insights, is an AI-powered platform that enables organizations to track, compile, and utilize customer data in real-time.
Its primary strength is its ability to correlate data across several dimensions. The platform’s AI enables businesses to leverage the data to their advantage and generate insights that can be used immediately to improve their interactions with customers.
Since its inception in 2019, the stock has grown by more than 500% in less than two and a half years, but its peak has long since passed. But knowing that this tiny micro-cap company has potential for such growth will help you make a wise investment selection.
Kinaxis Inc. (TSE: KSX)
Kinaxis is a supply chain management-focused SaaS (Software-as-a-Service) firm. The company operates on the cloud and assists clients in optimizing their supply chains, gaining a better understanding of their entire business, and increasing cost-effectiveness through the use of AI. Utilizing simulations and reducing inventory obsolescence, the software enables clients to get supply chain visibility and better organize their resources. Traditional supply chain management software consists of multiple software packages for various vendors and relies primarily on Excel. Kinaxis facilitates the integration of a company’s suppliers and logistics providers/departments under a single cloud-based software and provides an organizational view of the supply chain. As supply chains become more complex, Kinaxis AI enables businesses to better comprehend, manage, and adapt to their growing size.
Kinaxis serves clients in a variety of industries, including consumer technology, aerospace/defense, industrials, pharmaceuticals/healthcare, automotive, and FMCG. In addition, Kinaxis has numerous Fortune 500 clients, including Nikon, Qualcomm, Lockheed Martin, Toyota, and Asics, which demonstrates the product’s usefulness and real-world impact. In addition, the company has benefited from a tailwind from COVID as the world has been compelled to shift towards eCommerce, giving the supply chain and logistics business a significant boost.
VIQ Solutions (TSE: VQS)
VIQ Solutions develops digital content production and management tools powered by artificial intelligence for businesses. The business employs AI to provide services such as transcription, image recognition, and video tagging. In addition, the company enables organizations to automate operations like data collecting, categorization, and documentation, among others.
The corporation is successful in healthcare, police enforcement, the legal field, insurance, and generic enterprises. In addition, the business has benefited from COVID-19, which mandated the digitalization of court procedures, business meetings, and doctor visits.
In law enforcement and insurance, their software generates incident reports that are tagged and uploaded to the cloud for immediate processing. In addition, their product transcribes court proceedings, depositions, and meetings for the legal profession and generic enterprises. The usage of its transcription software in hospitals, which saves doctors time and boosts their efficiency, is another example of its application. Additionally, the organization offers real-time translation of dictations in forty languages.
MCloud Technologies (TSXV)
mCloud is all about power management and energy waste, a field that is growing in importance in the present ESG-oriented business environment.
The company promises to keep systems in optimal condition while minimizing energy waste and costs through AI-powered predictive maintenance of a firm’s many assets (including building-related assets such as HVACs). The tool relies heavily on AI.
The Calgary-based corporation has existed for some time, and its stock began trading on the TSX in 2017. However, its reliance on the energy industry has hindered its performance thus far.
However, additional ESG disclosure standards may increase the company’s service demand.
CGI Group (TSE:GIB.A)
CGI Group (TSE: GIB.A) is a worldwide provider of IT services. It is one of the major Canadian technology corporations and operates in over 40 countries.
CGI Group has been an exceptional stock to purchase, despite the fact that it may not receive as much attention as some of its high-flying peers. CGI Group has returned 400% over the past decade and has a compound annual growth rate of 17.30%.
CGI Group refers to itself as a “trusted AI expert” because it assists clients in implementing end-to-end AI solutions. From discovering opportunities through designing and constructing AI systems, as well as execution and quality enhancement, CGI supports clients through the AI process.
One recent example of CGI’s prowess is the contract it won from the European Space Agency (ESA). To “develop a new Artificial Intelligence (AI)-enabled platform and a set of solutions for the global satellite communications (satcom) sector,” CGI was awarded a contract in November 2020 as part of the Autonomous Satcom Solutions (AUTSS) program.
CGI Group is well-positioned to earn similar contracts across a wide range of industries for years to come, given its competence and trustworthy reputation.
Docebo (TSE: DCBO)
Docebo is a SaaS firm that employs its cloud-based AI platform to deliver service learning and upskilling organizations with customized e-learning services. As organizations adapt to evolving markets and products, technology is transforming the workplace at an unprecedented rate. This has created an enormous demand for e-learning and skill-upgrading service providers. As a result, Docebo has achieved tremendous success with A-list clients such as Netflix, Uber, and Starbucks. Investors view the presence of blue-chip clients as a positive indicator of a company’s product’s performance in the real world.
Docebo employs AI to help its customers provide individualized learning for employees and thorough progress monitoring for management. The program employs an AI-powered Virtual Coach to train employees in large-scale, real-world problem-solving. The program then proposes appropriate learning material to the trainees depending on their performance, all without the intervention of managers or administrators, who may use their time more productively while having a bird’s eye perspective of the development of all trainees.
As with the majority of IT companies, Docebo has profited handsomely from COVID, as many businesses were compelled to hire remote workers and required online training services. In addition, COVID has caused a systemic change toward work-from-home, resulting in long-term positive trends for Docebo.
Predictiv AI Stock (TSXV)
Predictive is a nano-cap firm having a modest market capitalization and price tag. It has recently reduced to a fraction of its former size.
This artificial intelligence company serves a number of markets and, as the name suggests, enables them to learn from data and produce reasonably accurate future predictions.
Although the potential appears to be rather high, neither the firm nor the stock has lived up to it thus far, and the situation has been deteriorating since its beginning.
If the company is able to expand its customer base and carve out a place for itself in this AI sector, it may one day become a formidable conglomerate.
Many Canadian-centric lists of AI stocks include Docebo, although, like Microsoft and Amazon, it is not a “true-blooded” AI business. It is an AI-powered platform for education.
The US market has a diverse assortment of AI startups. And if you are willing to invest across international borders, you can significantly expand the AI stock pool to which you have access.
OpenText (TSE: OTEX)
Open Text (TSE: OTEX), unlike many SaaS businesses that offer industry-specific products, is a SaaS powerhouse with products that support a wide range of sectors. It constantly adds to its amazing portfolio of assets through acquisitions, demonstrating its superior capital allocation skills.
Similar to CGI Group, OTEX is not a spectacular stock but consistently generates returns. The past decade has had a compound annual growth rate (CAGR) of 16.37% for total returns. In addition, it is one of the few Canadian Dividend Aristocrats listed on the TSX in the Technology sector. An uncommon combination of growth and earnings.
Magellan is Open Text’s AI and analytics platform, introduced in 2017. Magellan provides businesses with a “complete collection of AI and analytics solutions to tackle data difficulties.” It employs machine learning algorithms and incorporates all sorts of data, including speech, text, and video.
An open platform allows clients to tailor their enterprise information management systems. Open Text also offers preconfigured AI solutions for enterprises seeking rapid, out-of-the-box solutions. These solutions help firms begin their AI journey.
OTEX and CGI Group are among the most dependable TSX Index technology stocks to own. They may be less volatile than most publicly traded SaaS companies and cheaply priced. As reputable leaders, they are ideally positioned to ride the AI adoption wave in the next few years.
Goldspot Discoveries (TSXV)
AI can be utilized in a variety of imaginative ways, assuming the proper approach is taken. Goldspot uses it, and more specifically its machine learning component, to analyze photos of drill cores.
The study enables Goldspot’s proprietary imaging technique to identify geologically important data, and it provides mining corporations with far more information for something they were already doing: drilling.
And with enhanced geological knowledge, businesses can make optimal decisions. From gold to uranium, the corporation assists numerous resource exploration companies.
Conclusion
AI promises to alter how the world operates. Humans may make conclusions based on evidence much slower than algorithms. But the driving cause may be that A.I. enables corporations to increase size and production while reducing expenses. This will require businesses to invest in cognitive computing to remain competitive.
Stocks in the artificial intelligence market are unlikely to be a sure bet, but any volatility will present chances for long-term investors. Alternatively, investors could invest utilizing A.I. by investing in funds that utilize the technology.
