Artificial intelligence (AI) is no longer science fiction. From facial recognition unlocking your phone to AI-powered grammar assistants, it's woven into our everyday lives. And this is just the beginning. 

This pushes in the question for investors: should you consider Canadian AI stocks?  In this guide, we'll delve into the Canadian AI landscape with details about Canada's top players dominating the TSX with artificial intelligence. Let’s explore their potential and help you decide if AI aligns with your investment goals. 

A leader in IT and business consulting since 1976, CGI crafts custom solutions for clients across industries. They achieve this by closely aligning an industry's specific needs with CGI's service offerings.  Their comprehensive services include business strategy, IT consulting, integrating systems, managing IT infrastructure, handling business processes, and developing intellectual property solutions. 

CGI kicked off fiscal 2024 with a strong performance. Their revenue in Q1 FY2024 hit $3.6 billion, reflecting a 4.4% increase year-over-year. Even accounting for currency fluctuations, revenue grew by 1.5% year-over-year. Profitability metrics were also positive. The company's EBIT margin increased 5.4% year-over-year to 16.2%, and net earnings reached $389.8 million, representing a 1.9% year-over-year increase. 

Technical View: The price of GIB. A has recently broken out of a rising channel pattern, which is a bullish pattern indicating a potential increase in value in the near future. This pattern suggests growing buying pressure and investor confidence, indicating a shift in market sentiment towards optimism. Moreover, the upward trend of the 14-day Relative Strength Index (RSI) also supports this positive outlook by signaling increasing buying pressure. Additionally, the stock's price is currently above both its 21-day and 50-day Simple Moving Averages (SMAs), which reinforces the positive trend and adds momentum to the potential rally. 

 

Coveo makes the digital world sing for leading brands. Their all-in-one cloud platform (SaaS) uses powerful AI and next-generation AI (GenAI) tools to completely transform your customer (CX) and employee (EX) experiences.  

From websites and e-commerce to service and the workplace, Coveo personalizes, secures, and connects every touchpoint. Their AI features, like recommendations, semantic search, and GenAI answering, empower customers, enhance employee capabilities, and ultimately drive outstanding business results. 

Coveo reported strong financial results for Q3 2024 (ended December 31, 2023). Their subscription revenue from software-as-a-service (SaaS) grew 13% year-over-year to $29.9 million. Total revenue also rose 11% to $31.8 million. Profitability improved as well, with both operating loss and adjusted operating loss showing significant reductions compared to the same period last year. 

Technical View: On the weekly chart, the stock price of CVO has broken above a long-term descending channel pattern that was established during a downtrend in July 2023. This breakout indicates a positive trend for the stock. The volumes also seem to support the next upward movement. Additionally, the leading indicator RSI (14-period) on the weekly chart is in positive territory and showing a reading of 53.70, indicating a positive trend. Prices are currently trading above both the 21-period and 50-day SMAs, which may function as dynamic support levels for the stock in the future. 

 

Feeling overwhelmed by digital transformation? OpenText has your back.  They offer comprehensive and unified Information Management platform (OTEX) available.  OTEX helps businesses tame the chaos by organizing, integrating, and securing data and content at every step, whether within your organization or across collaborations. 

OpenText delivered a banner year in fiscal 2023, achieving record revenue of $4.48 billion. This represents a significant increase of 28.4%, and an even more impressive 32.2% when adjusted for currency fluctuations. Their cloud business also thrived, hitting a record $1.7 billion in revenue, reflecting double-digit growth (10.8% as reported, 13.3% in constant currency). 

Strong momentum continued in recurring revenue, with Annual Recurring Revenue (ARR) reaching $3.6 billion. This translates to 81% of their total revenue, and represents a year-over-year increase of 26.2% (29.7% in constant currency). OpenText also maintained profitability, with a GAAP-based net income of $150 million and a net income margin of 3.4%.  

Technical View: The share price of OTEX has recently broken through its long-term downward trendline. This is supported by a surge in trading volume during a breakout, suggesting a high likelihood of further upward momentum. The 14-day Relative Strength Index (RSI) is also showing a positive market sentiment by being on an upward trajectory. Additionally, OTEX's stock price is currently above both its 21-day and 50-day Simple Moving Averages (SMAs), indicating a positive trend. All these technical factors suggest that OTEX's stock price may continue to grow. 

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Kinaxis helps businesses worldwide build lightning-fast and adaptable supply chains.  Their secret sauce?  A powerful blend of human expertise, cutting-edge AI, and a unique approach called concurrency.  This winning combo allows companies to see further, react faster, and eliminate waste.  The Kinaxis RapidResponse platform, a cloud-based powerhouse with industry-proven applications, empowers both supply chain leaders and business executives to make smarter decisions that benefit their business, customers, and the planet. 

Kinaxis goes beyond just technology.  They believe in AI that puts people first.  By expertly combining human knowledge with the power of concurrency, Kinaxis fuels intelligent supply chains that thrive in today's ever-changing world. 

Kinaxis reported a strong finish to fiscal year 2023, with their cloud business (SaaS revenue) growing 19% in Q4. This momentum carried through the entire year, resulting in overall SaaS revenue growth of 24%.  The company also maintained a healthy profit margin, with adjusted EBITDA holding steady at 18% for both the quarter and the full year. 

In addition to strong revenue growth, Kinaxis expanded its Annual Recurring Revenue (ARR) by 18% to reach $322 million by the end of Q4. This metric indicates a strong base of committed customers and predictable future revenue streams. 

Technical View: KXS's stock price has recently found support at a long-term upward trendline. This trendline is further reinforced by an increase in trading volume during a breakout from a consolidation zone. This surge in activity suggests that there is a high probability of ongoing upward movement. The 14-period Relative Strength Index (RSI) is positioned above the midpoint, which adds more weight to the optimistic forecast. Additionally, with the stock price surpassing its 21-day Simple Moving Average (SMA), this level could function as temporary support levels during upcoming price fluctuations. 

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  • Descartes Systems Group Inc. (TSE: DSG) 

Descartes has emerged as a command center for global commerce.  Their Logistics Technology Platform is like a digital bridge, connecting the world's biggest logistics network with a vast toolbox of applications and real-time trade intelligence.  The result?  Seamless movement of inventory, information, resources, and people – exactly where and when they're needed.  Safety and security are built-in, ensuring peace of mind. 

As a leader in uniting logistics businesses, the Descartes brand is a powerhouse.  Their online branding hub provides a clear view of their brand assets, guiding users on color schemes, logo options, and even offers a handy brand guide. 

Descartes reported a strong financial year in fiscal 2024, with revenue reaching $572.9 million, a significant increase of 18% year-over-year. Service revenue, their core business, grew even faster at 20%, now representing 91% of their total revenue. 

Technical View: The price of DSG has recently broken out of a symmetrical triangle pattern. This is a bullish pattern that suggests a potential increase in value in the near future. The pattern indicates growing buying pressure and investor confidence, which is a shift in market sentiment towards optimism. The upward trend of the 14-day Relative Strength Index (RSI) also supports this positive outlook by signaling increasing buying pressure. Additionally, the stock's price is currently above both its 21-day and 50-day Simple Moving Averages (SMAs). This reinforces the positive trend and adds momentum to the potential rally. 

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