AI Stocks to Consider: A Deep Dive into Kinaxis, OpenText, and Descartes

JJohn February 23, 2024 7:01 AM

Artificial Intelligence (AI) stocks have been drawing attention, with the AI market projected to reach US$1.6 trillion by 2030. This piece features three Canadian companies - Kinaxis, OpenText, and Descartes - that utilize AI for their operations and offer potential investment opportunities.

Kinaxis: A solid bet for AI-focused investment

Kinaxis (TSX:KXS) has been leveraging AI for a while now, improving supply-chain management with AI-enhanced capabilities such as demand forecasting, inventory optimization, and efficient transportation planning. Although shares have dropped from their peak, it's a stock to keep an eye on. The company's stock may seem expensive at the moment, but for long-term investors, the value proposition is strong. With a significant portion of its revenue being subscription-based, investors can bank on a steady income stream. Plus, Kinaxis's cutting-edge AI software keeps it a step ahead in the supply-chain management sector.

OpenText (TSX:OTEX) has been utilizing AI for years, and it recently stepped up its AI efforts. During the last OpenText World event, they announced plans to broaden the use of AI across several new sectors, including engineering and chat spaces. The company's long-standing application of AI for content analytics, security, and customer experience has already proven beneficial, contributing to an impressive 82% stock increase over the past decade. With further integration of AI, including already operational engineering software, we can expect improved company performance.

Descartes: An AI stock with substantial growth

Descartes Systems Group (TSX:DSG) wraps up our list of AI stocks to consider. This logistics software company provides solutions for challenges such as route optimization, freight matching, and customs compliance - all of which are much more manageable with AI. The company's shares have experienced significant growth over the past years - a whopping 159% increase in the last five years alone, a testament to how AI has optimized the company's growth. With substantial profit margins and consistent revenue and earnings growth, Descartes is another AI stock that's worth a look.

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