Over the last year, we’ve already begun to see rapid innovation in AI technology and, consequently, a massive rally in many AI stocks.
With so much competition in the space and the race for companies to build out their technology or adapt others’ technology to improve efficiency, it’s clear that the potential AI offers cannot be denied.
It’s also not surprising that there has been so much volatility in the space, particularly with high-growth stocks whose profits are rising rapidly each quarter.
These hot stocks attract the interest of many investors, which often sends their share prices soaring to new heights. Then, when there is a temporary impact on their operations or just a sell-off in the broader market, these stocks can begin declining rapidly in value, creating significant volatility for investors.
That’s why it’s so important for investors to understand the companies they are buying and the valuations they are paying for these stocks.
You don’t want to avoid AI stocks altogether, given their massive potential. At the same time, though, you cannot just blindly invest in these stocks and hope for a significant return.
That’s why one of the best strategies for taking advantage of the AI boom is to find reasonably valued stocks that are adopting AI into their operations to boost their efficiency and, ultimately, their profitability.
So, if you’re looking to gain exposure to AI but are worried about some of the highly volatile stocks in the sector, here are three stable Canadian stocks that can benefit from AI technology and potentially see significant growth in the coming years.
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Three top Canadian stocks to buy for exposure to AI
Every day, more and more companies continue to look for ways to adapt AI to their operations, giving investors numerous options on how to gain exposure to the high-growth sector.
However, right now, three of the best stocks to consider are Shopify (TSX:SHOP), Telus (TSX:T), and Brookfield (TSX:BN).
AI-powered eCommerce
Most investors know of Shopify by now, as it’s one of the top growth stocks in Canada, taking advantage of the booming e-commerce sector. However, in addition to the natural growth it has from the growing popularity of e-commerce, Shopify is also now leveraging the power of AI to boost business.
The stock has been consistently adding AI-powered tools to offer to its user base. For example, from AI-powered chatbots to image-editing software, merchants continue to get access to new tools to help improve their marketing capabilities and customer engagement.
So, as Shopify continues to invest in research and development and offer more AI tools to its merchants, it has a tonne of growth potential ahead, particularly as the economic environment picks up and e-commerce continues to become more popular among consumers.
A steady and reliable telecom
Meanwhile, as a massive telecom stock, Telus is already one of the least volatile and most reliable stocks on the TSX. So, as it continues to adapt AI technology to improve efficiency, it’s certainly one of the top stocks to consider buying today.
The stock is heavily investing in AI across various sectors, including digital health and smart cities. It has also received multiple awards for its AI-driven customer experience solutions. In addition, AI now represents approximately 15% of Telus Digital’s revenue, which is already up 13% year over year in the first half of 2024, showing the significant growth potential Telus has.
A green energy play
Finally, Brookfield is another massive and low-volatility stock to buy now and hold for years, both due to its status as a high-quality company and the significant revenue growth it could see as a result of AI.
Unlike most other stocks that are adapting AI to improve efficiency and, consequently, profitability, Brookfield could see a significant boost to its earnings due to the infrastructure assets it owns.
For example, with over 230 GW of renewable power, Brookfield can support the energy-intensive needs of AI operations. Furthermore, Brookfield’s significant investments in data centres provide the critical infrastructure needed to support AI technologies, positioning the company to benefit from the growing demand for AI computing power.
Therefore, if you’re looking for more exposure to the growth potential of AI but are worried about the volatility in the sector, Brookfield is undoubtedly one of the best stocks to buy now and hold for years.
