5 Canadian tech stocks to buy today as AI boom continues

By:
on Apr 19, 2024
Updated: Apr 20, 2024
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  • The TSX Composite Index has pulled back in the past few weeks.
  • The index is mostly made up of traditional companies in areas like banking and mining.
  • This article looks at some of the best Canadian technology companies to buy.

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The S&P/TSX Composite Index (TSX) has lost its recent momentum as the stock market rally faded. The index has retreated in the past six straight days and is now hovering near its lowest level since March 11th. It has crashed by about 3% from its highest level this year.

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Most publicly traded companies in Canada are in traditional industries like banking, mining, and transportation. The biggest firms in the TSX index are firms like Royal Bank of Canada, TD Bank, Canadian Natural Resources, and Canadian National Railway.

Unlike in the United States, Canada has few publicly traded technology companies. Still, there are some of the top tech stocks in Canada that you can invest in to take advantage of the artificial intelligence (AI) boom.

Shopify 

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Shopify (TSE: SHOP) is the biggest Canadian technology company with a market valuation of over $88 billion. The company provides a platform that lets users build e-commerce websites.

It makes money in various ways. The most straightforward approach is where it charges a monthly subscription fee for all shop owners. It then takes a cut for all products sold on its website. 

Shopify’s business is still growing as the number of stores on its platform rise. It is also benefiting from elevated transaction costs in the network. It has a trailing twelve-month growth rate of 26% and a forward growth of 22.30%.

Shopify’s annual revenues have jumped from $1.57 billion in 2019 to over $7 billion in 2023. Analysts expect that the company’s revenue will be over $8.5 billion this year and more than $10 billion in 2025.

Shopify is also investing in artificial intelligence to simplify its business and that of its customers.

HealWell AI

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HealWell AI (TSX: AIDX) is another top Canadian tech company to invest in because of its artificial intelligence tools. The company has already raised $33M in the past 12 months and there are signs that it is just getting started. 

HealWell AI is not a company that is well known since it does not provide consumer-facing products. Instead, it has developed AI tools focused on early identification and detection of disease. 

Healwell AI owns Khure Health which helps physicians to screen and identify patients with rare diseases. It is also a majority shareholder in Pentavere, a leading research company in the healthcare AI industry.

Most importantly, the company has an exclusive partnership with Well Health Technologies, who owns and operates the largest healthcare ecosystem in Canada. Therefore, there is a likelihood that the company will continue making great progress in the preventative healthcare space. 

Kinaxis

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Kinaxis (TSE: KXS) is another Canadian technology company that you may consider. It is a major provider of end-to-end supply chain solutions that simplifies how companies operate.

Kinaxis serves companies in most industries like automotive, consumer, industrial, and life sciences. Using its systems, companies save time and financial resources over time. Some of its top customers are firms like Diageo, Lenovo, Raytheon, and Johnson Electric.

Kinaxis’s business is growing at a quick rate. It made over $191 million in 2019 and over $427 million in 2023. The key challenge is that its profitability has not been all that good, which explains why the stock is 34% below its all-time high.

Open Text

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Open Text (TSE: OTEX) is a leading Canadian technology company that provides services to other businesses. Some of its top clients are firms like Heineken, Philips, Hyatt, and the Royal Bank of Canada. It is listed in Canada and the United States, where it has a market cap of over $9 billion.

Open Text provides numerous services, including a content cloud, a hybrid integration platform, cybersecurity tools, and an artificial intelligence cloud. Its business has been doing well as total annual revenue surged from $2.8 billion in 2019 to $4.48 billion in the last financial year. 

CGI Inc

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CGI Inc (TSE: GIB) is the other top Canadian tech company to buy. It is a consulting company that provides services like business consulting, systems integration, and application development solutions.

Unlike the other companies in this list, CGI is not growing as fast, which is in line with other consulting firms like Accenture and Infosys. Its revenue came in at $10.9 billion in the last financial year, an increase from $9.3 billion in 2022. Its profit rose slightly to $1.2 billion.

CGI is a good investment because its role in the technology industry. It has long-term contracts with some of the leading companies. Also, its revenue is still growing albeit at a slow pace. CGI stock price recently surged to a record high of $160.

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