What are we looking for?
Canadian stocks with artificial intelligence-focused businesses.
The screen
The U.S. stock market is at all-time highs, driven in part by technology companies capitalizing on the surge in interest for artificial intelligence. Whether it is Microsoft’s partnership with OpenAI, the operator of ChatGPT, or NVIDIA rocketing forward as the leader in AI chip manufacturing, the AI trend is only getting started. The increasing momentum in AI is not confined to the United States. According to a report published by Deloitte, “$2.57-billion was invested in Canadian AI research and development” between 2022 and 2023, outpacing that of many other countries. We began identifying Canadian AI companies by using FactSet’s universal screening tool and applying the following parameters:
- Traded on a Canadian exchange;
- FactSet business description includes one of the following terms: artificial intelligence, machine learning, natural language processing;
- Positive sales growth in the past 12 months;
- Positive forecast 2024 sales growth by sell-side analysts;
- Market capitalization greater than $1-billion.
We ranked the seven remaining companies by their one-year forecast sales growth.
More about FactSet
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What we found
Growing Canadian stocks with AI exposure
| RANK | COMPANY | TICKER | FACTSET SECTOR | FACTSET INDUSTRY | RECENT CLOSE ($) | MKT. CAP. ($ MIL.) | DIV. YLD. (%) | YTD. TTL. RTN. (%) | 1 YR. TTL. RTN. (%) | SALES ($ MIL.)* | NET INC. ($ MIL.)* | LTM. SALES GROWTH (%) | 2024 PROJ. SALES GROWTH (%) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Open Text Corporation | OTEX-T | Technology | Software | 54.88 | 14,929.8 | 2.5 | -1.5 | 19.4 | 7,688.1 | 172.2 | 67.1 | 33.8 |
| 2 | BlackBerry Limited | BB-T | Technology | Software | 3.79 | 2,218.5 | 0.0 | -19.4 | -31.0 | 1,124.7 | -767.3 | 25.9 | 25.2 |
| 3 | Lightspeed Commerce Inc | LSPD-T | Consumer Cyclicals | Other Retail | 18.61 | 2,839.6 | 0.0 | -33.1 | -16.2 | 1,165.3 | -277.9 | 28.9 | 23.4 |
| 4 | Kinaxis, Inc. | KXS-T | Technology | Software | 160.71 | 4,579.6 | 0.0 | 8.1 | -0.3 | 557.5 | 19.7 | 29.4 | 15.6 |
| 5 | Coveo Solutions, Inc. | CVO-T | Technology | Software | 11.18 | 1,122.0 | 0.0 | 16.5 | 38.4 | 165.5 | -36.2 | 17.2 | 11.3 |
| 6 | CGI Inc. Class A | GIB-A-T | Technology | Technology Consulting Services | 152.58 | 35,520.2 | 0.0 | 7.5 | 23.2 | 14,449.1 | 1,638.7 | 9.3 | 3.9 |
| 7 | TELUS Corporation | T-T | Telecommunications | Wireless and Wireline Telecommunications Services | 23.71 | 34,498.0 | 6.1 | 0.6 | -7.8 | 20,005.0 | 841.0 | 9.4 | 3.8 |
Source: Growing Canadian stocks with AI exposure
* Figures are last twelve month values
While only seven stocks passed our screen, 61 other publicly traded companies in Canada focused on AI were identified but later filtered out by the market capitalization parameter. Many of these are newly incorporated, demonstrating the strong appetite for Canadian AI. We focused on companies with a market capitalization over $1-billion as many of these smaller companies are not yet generating revenue and carry greater risk. Open Text and BlackBerry were ranked highest and projected to grow the fastest out of the group.
Open Text Corp. OTEX-T, a software-as-a-service provider catering to a wide variety of industries, ranked highest on our screen with a 33.8-per-cent projected growth rate. Open Text has a proven track record of acquiring and integrating companies into its vast ecosystem, bolstering its offerings. Magellan, its AI and analytics platform, provides businesses with a robust suite of tools that integrate data analysis and machine learning to boost productivity. Open Text reported earnings on Feb. 1 and indicated strong demand for its cloud services.
BlackBerry Ltd. BB-T, a security software and service provider, ranked No. 2 on our screen with one-year projected sales growth of 25.2 per cent. Previously known for its signature mobile phone, BlackBerry now delivers AI and machine learning service in cybersecurity, safety and data privacy. BlackBerry had a challenging past 12 months owing to a decline in its cybersecurity business and delays in closing some large government deals. BlackBerry’s share price is the lowest it has been since 2003, leaving ample room for upside. Investors can listen to the investor update from Tuesday to learn additional details on its strategic direction.
The information in this article is not investment advice. FactSet assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained above.
Arjun Deiva, CFA, is a vice-president at FactSet Canada’s consulting division.
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