Artificial Intelligence (AI) stocks worldwide started experiencing a solid bull market phase once institutional and retail investors started realizing the full potential of this new tech dimension. However, the growth was especially phenomenal for certain AI giants, including Nvidia (NASDAQ:NVDA), because of their oversized impact on AI technologies.
In the case of Nvidia, the impact is tied to their hardware, which is ideally positioned to serve as the computing power needed to train new AI and Machine Learning (ML) models.
Their graphics chips, graphics processing units (GPUs), were initially developed for gamers and are now more extensively used for AI. This pushed the company into the trillion-dollar market cap club, and it has grown by over 220% in the last 12 months alone.
However, while Nvidia is still a promising prospect, Canadian investors have access to a strong contender at home – Shopify (TSX:SHOP).
The company
Shopify is one of the largest e-commerce companies in the world, and even though it has lost a significant amount of market share due to more affordable alternatives, it may be ready to make a comeback. One vital part of this comeback could be Shopify Magic, an AI product developed exclusively for e-commerce businesses.
The Shopify platform is comprehensive enough to accommodate a wide range of AI-powered business growth elements and features for their customer base. This may increase the platform’s appeal significantly, sufficiently enough to lead to another intense phase of user growth.
Another area where Shopify’s overlap with AI might benefit the company is the Shopify eco-system of applications and add-ons, which is already experiencing a surge of new AI-based apps.
The stock
Shopify stock was one of the most potent growth stocks on the TSX, at least up until 2021. The stock grew around 6,000% between its inception in 2015 and 2021 peak, and then went into a brutal correction mode, losing over 80% of its value. However, SHOP stock didn’t remain slumped and is already on a recovery journey, and while it hasn’t been smooth, it has grown by over 65% in the last 12 months.
The reason why Shopify may prove to be a more compelling pick than AI giant Nvidia is that Nvidia has already ridden the early bird AI wave while Shopify has yet to start. It is still not very well known for its AI features and strengths, but this may change, allowing the stock to start growing at a pace similar to its early years of growth or even faster.
Foolish takeaway
Shopify is not the only Canadian tech stock that’s poised for AI-fueled growth, but it’s easily one of the strongest candidates. But you should keep its weaknesses in mind as well, including its bloated valuation – as is evident from its price-to-earnings of over 760.
