Amid the glorious tech rebound in the first half of the year, most of the attention was focused on the stars of mega-cap American tech. Indeed, Silicon Valley still seems to be the hotbed for all the most disruptive innovative trends, from generative artificial intelligence (AI) to the metaverse (or spatial computing, if you prefer) and more. Still, I believe Canada’s tech scene doesn’t get nearly as much respect as it deserves.
Undoubtedly, Shopify (TSX:SHOP) is one of Canada’s fastest-rising stars. Though the stock imploded during the brutal tech wreck of 2022, I still think it’s a mistake to count the e-commerce firm out of the race, as it looks to embrace next-generative technologies, including generative AI.
Undoubtedly, it’s not just Silicon Valley AI companies that can benefit from the rise of AI. Shopify and other Canadian tech firms also stand to win a great deal from its rise over the next 10 years and beyond.
In this piece, we’ll look at two intriguing Canadian companies that I think could benefit a great deal from the so-called AI revolution (or the fourth industrial revolution, as some industry pundits refer to it).
Shopify
Shopify briefly became Canada’s largest company by market cap before it nosedived off a cliff, eventually falling down the rankings. The stock plunge in excess of 80% was horrifying if you overbought at the cliff. Still, I don’t think you can classify Shopify as one of those companies to just forget about after its historic decline. Indeed, generative AI could play a major piece in the puzzle, as the company looks to invest heavily in its tech capabilities.
Mad Money host Jim Cramer recently stated that it may be better to wait for Shopify shares to pull back a bit before getting in. I think he’s right on the money. Shopify stock may be a great company, but in this kind of environment, which is starting to become less hospitable to high-multiple, high-growth names, I think a 20-30% pullback is very much possible, even with the long-term jolt of AI factored in.
You could argue SHOP stock has already fallen off, with shares off 20% from 52-week highs. Still, there’s a lot of ground to give up if shares are to surrender the year’s gains. All considered, Shopify stock is a must-buy stock that could make a big splash in the AI waters over the years.
Open Text
Open Text (TSX:OTEX), not to be confused with ChatGPT creator OpenAI, looks intriguing here. It has skin in the AI race, with the firm’s move to sprinkle a bit of AI over its already impressive enterprise software portfolio. Indeed, the IT firm has been in recovery mode (like Shopify) of late. Though shares recently slipped, I still think investors should consider the name while it’s treading water, as it’s hard not to love the recent shift into AI.
Though Open Text may be lesser known versus Silicon Valley tech firms, I’d still not be afraid to be a net buyer at below $50 per share. Personally, I think the stock is intriguing right here, even in the face of prominent rate-related industry headwinds.
