AI Investing in Canada: AI Stocks vs Tools

Canadian investors are increasingly faced with two related trends: investing in AI stocks (buying shares of companies benefitting from artificial intelligence boom) versus using AI to invest (leveraging AI-driven tools to make investment decisions). 

Personally, I’m instinctually suspicious of anything that gets this much press coverage and hype behind it. I should be clear – I use language learning models (LLMs) daily these days. I get how they can greatly improve productivity. I’m just not sure I see quite the boom or world-changing use-case that real AI-bulls out there seem to be putting forward. But it probably doesn’t surprise anyone that a fan of Canadian all in one ETFs and Canadian dividend stocks isn’t a huge proponent of “the latest thing.”

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Investing in AI Stocks vs Using AI to Invest

To be clear, when I talk about “Investing in AI” I’m referring to buying into companies or sectors that stand to benefit from AI’s growth – for example, purchasing stock in a tech company developing AI products. 

I’m not talking about small- and medium-sized businesses using cash flow to pay for AI capability that will increase their corporation’s efficiency. In other words, I’m talking about individual portfolio investments, not corporate balance sheet investments.

When I talk about “using AI to invest”, I’m referring to employing artificial intelligence tools in your own investing process (such as AI-powered stock screeners). 

Investing in AI relies on traditional equity analysis (are these companies good investments, or overhyped?), whereas using AI tools involves trusting algorithms to augment or automate your decisions. A prudent investor should be cautious of hype in both cases. AI companies’ stocks can soar on optimism long before profits materialize, and AI investing tools seem to be promising market-beating results that don’t always pan out in reality.

Best Artificial Intelligence Stocks for Canadians

When it comes to investing in AI through equities, Canadian investors have a few domestic tech names with AI exposure. The companies below are among Canada’s top tech stocks, each connected to AI in different ways.

I also want to point out that it isn’t only tech companies that benefit from AI efficiencies. It may turn out for example that railway stocks and utility stocks actually decrease their costs and improve productivity in a manner that leaves them as bigger winners than the market has currently priced in. It’s difficult to project these things, but I wanted to emphasize that making use of artificial intelligence isn’t solely reserved for a handful of tech companies (although they’re obviously the most direct beneficiaries).

Shopify (SHOP)

What it does: Shopify is an Ottawa-based e-commerce platform provider enabling merchants worldwide to set up online stores. It’s one of Canada’s largest tech companies, with a market capitalization around $140+ billion USD (approximately C$200 billion).

AI connection: Shopify is not an “AI company” per se, but it has been integrating AI into its services to help merchants. For instance, Shopify recently launched Shopify Magic – an AI tool to automatically generate product descriptions and other copy – and Shopify Sidekick, an AI assistant to help merchants analyze business questions and perform tasks.

These generative AI features (powered by large language models) aim to make life easier for online store owners, and could improve Shopify’s value proposition to businesses. In short, Shopify is using AI to enhance its commerce platform (e.g. AI-written product content and AI-driven storefront tools) rather than selling AI software directly. 

Is AI growth priced in? Shopify’s stock has already rebounded strongly, suggesting that investors are optimistic. In fact, Shopify shares have nearly doubled (up ~88% year-over-year) and the stock trades at a price-to-earnings (P/E) ratio around 70 on a trailing basis. Such a high P/E implies that significant growth (including AI-driven growth) may already be baked into the price. Investors are paying a premium for Shopify – its P/E was over 68 at the end of 2024, coming down from an even loftier level in 2023.

This rich valuation means that if AI integrations don’t materially boost Shopify’s earnings in coming years, the stock could be vulnerable. Analyst sentiment on Shopify is positive but cautious – the consensus rating is a Moderate Buy, with the vast majority of analysts rating it “Buy” or “Outperform” (roughly 25 buys, 12 holds, 0 sells in one survey). 

Overall, Shopify is seen as a Canadian tech champion poised to benefit from AI adoption in e-commerce, but investors should be mindful that its valuation is high and assumes a lot of future success.

Open Text (OTEX)

What it does: Open Text is a long-established Canadian enterprise software company (headquartered in Waterloo) specializing in information management, content services, and business process tools. With a market cap near C$8 billion, Open Text is a major tech player in Canada. It sells software to large organizations for managing documents, data, and workflows – and increasingly, these offerings include AI features. 

AI connection: Open Text has been incorporating AI and machine learning into its products to help enterprise customers make sense of large amounts of unstructured data. The company recently launched OpenText Aviator, an AI platform that adds predictive analytics, AI-powered search, and generative AI capabilities across Open Text’s software suite.

For example, OpenText’s content management solutions now use AI-driven insights to automate workflows and improve decision-making. The firm is also applying AI in cybersecurity and other areas (through acquisitions and R&D). 

In short, Open Text is leveraging AI to enhance its existing software products (making it an “AI enhancer” in its industry), rather than being a pure AI developer from scratch. 

Is AI growth priced in? Unlike some flashy AI startups, Open Text’s stock has modest expectations built in. The shares trade at a trailing P/E of about 11.5 (based on the last 12 months earnings), which is far lower than many AI-themed companies. In fact, its forward P/E is around 6–7, reflecting that earnings are expected to jump (likely due to recent acquisitions and cost efficiencies).

This relatively low valuation suggests the market is not aggressively pricing in an AI revenue explosion for Open Text – if anything, investors are a bit skeptical or simply valuing it as a steady enterprise software business. The stock pays a dividend (yield ~3.7%), signaling a stable, mature company rather than a high-flying AI growth story. Analyst sentiment on Open Text is mixed to mildly positive. 

Overall, Open Text provides a cautionary contrast to AI hype – it’s using AI under the hood to make its products better, but its stock hasn’t skyrocketed on AI news. This could mean potential value if those AI enhancements drive more sales, but also reflects that AI alone hasn’t transformed Open Text’s growth narrative (at least as far as investors are concerned, so far).

Kinaxis (KXS)

What it does: Kinaxis is an Ottawa-based software company focusing on supply chain planning and logistics solutions. Its flagship platform, RapidResponse (now evolving with Kinaxis Maestro), helps large companies manage their supply chain operations in real time. Kinaxis is smaller than the names above, with a market cap around C$5–6 billion but it’s one of Canada’s tech success stories in a niche domain (supply chain management software). 

AI connection: Kinaxis has been “AI-infusing” its supply chain platform to enhance forecasting and decision-making. The company’s software uses machine learning and AI (branded as part of its AI-driven Maestro platform) to analyze supply chain data and generate insights for planners.

For example, Kinaxis offers Demand.AI for demand forecasting and uses AI/advanced analytics to optimize inventory and production schedules. In practical terms, this means Kinaxis’s tools can automatically detect anomalies, predict shortages or gluts, and recommend actions – a clear value-add for complex global supply chains. The use of AI is a selling point that helps Kinaxis remain competitive against larger global software firms. 

Is AI growth priced in? Kinaxis’s stock carries a very high valuation, implying that investors have lofty growth expectations (which likely include its AI capabilities). The stock’s trailing P/E is extremely elevated (over 400) due to very small current earnings. Essentially, Kinaxis has been reinvesting for growth and its GAAP net income is minimal, so the P/E looks sky-high.

Even on a forward basis, the P/E is around 40+. This suggests the market has already priced in robust growth (double-digit revenue growth and margin expansion) for years ahead. In 2024–25 the stock has performed well – it’s hovering near 52-week highs around $190–$200/share. Analyst sentiment leans positive: the consensus rating is between Buy and Hold.

Kinaxis’s AI story (smarter supply chain automation) is compelling, but a lot of that story is already reflected in the stock price. Future stock gains will depend on the company delivering strong results to justify the premium

Constellation Software (CSU)

What it does: Constellation Software is a Toronto-based tech conglomerate known for acquiring and holding dozens of smaller vertical market software businesses. Under CEO Mark Leonard, Constellation has for years been a serial acquirer of software companies in niche industries (from healthcare to finance to public transit systems software). This decentralized, buy-and-hold approach has turned Constellation into one of Canada’s most valuable companies – its market capitalization is over C$100 billion (around US$75–80 billion). The company’s share price has skyrocketed over the past decade as it continues to leverage its compounding acquisition model. 

AI connection: Unlike the others above, Constellation isn’t focused on a single product or technology, and it doesn’t market itself as an “AI company.” However, many of the software businesses it owns are likely implementing AI in their products on a case-by-case basis.

Constellation’s model is to let its subsidiaries operate autonomously – so if AI can improve those niche software offerings (by adding new features like predictive analytics, or automating tasks for clients), Constellation will benefit indirectly through better performance of its businesses. There’s also a strategic angle: AI could lower the cost of developing software or open new markets, which might create more acquisition opportunities for Constellation.

In short, Constellation is an AI beneficiary by osmosis – it’s not selling AI platforms itself, but its vast portfolio of software companies can adopt AI advances to enhance their mission-critical products. This should, over time, boost the value of Constellation’s holdings. (Notably, Constellation hasn’t seen an “AI hype” spike like Nvidia or Microsoft; its trajectory has been steady compounding.) 

Is AI growth priced in? Constellation Software’s stock trades at a premium valuation, but that has been more due to its reliable acquisition-driven growth than any AI excitement. Its trailing P/E is in the 100+ range , which is very high – though part of that is due to accounting (the company’s earnings are dampened by amortization of acquisition intangibles).

On an operational basis, the valuation is somewhat lower (an operating P/E around 45), but still rich. This reflects investors’ trust in Constellation’s model and management, and perhaps a scarcity premium for a company that has delivered 30% annualized returns historically. Importantly, AI is not the main driver of Constellation’s valuation today – the stock isn’t up 50% overnight on AI news.

This relatively measured market reaction means that investors aren’t assuming dramatic AI-fueled growth for Constellation in the near term. If anything, AI is a subtle tailwind: over time AI could make Constellation’s businesses more efficient or expand their markets, but the stock’s price is still grounded in the firm’s disciplined acquisition strategy

Other Major AI Stocks Canadians Can Buy

Beyond the Canadian stock market, many global tech leaders in AI are accessible to Canadian investors through U.S. markets. All of our picks for best online brokerages easily allow Canadians to purchase stocks on the New York Stock Exchange (NYSE) and/or NASDAQ. Here are three prominent examples of AI-related stocks that, while not based in Canada, can be bought by Canadians in their portfolios:

Nvidia (NVDA)

Nvidia has become synonymous with the AI boom, thanks to its graphics processing units (GPUs) that serve as the workhorses for AI computations. Nvidia’s chips are used to train and run neural networks (including the large models behind tools like ChatGPT), making the company a critical “picks-and-shovel” provider in the AI industry. 

AI connection: Virtually every major AI application today relies on Nvidia’s hardware. The explosion of demand for AI-capable cloud computing (from data centers training machine learning models) has led to a surge in orders for Nvidia’s high-end GPUs. In response, Nvidia has pivoted heavily to data-center and AI-focused products (like the A100 and H100 GPU units), and it also provides AI software frameworks (CUDA libraries, etc.) to support developers. 

This positioning made Nvidia one of the biggest winners of the generative AI trend. Nvidia’s stock has skyrocketed on AI hype and growth. The company’s market capitalization blew past US$1 trillion in 2023 and kept climbing – as of mid-2025, Nvidia is worth roughly $3.3 trillion USD (making it one of the most valuable companies in the world).

The stock price increase has been accompanied by surging financials: Nvidia’s revenue more than doubled year-over-year, and earnings jumped correspondingly Despite that, the valuation remains very high. Nvidia trades around 55 times trailing earnings and about 30+ times forward earnings.

In other words, even considering the huge profit growth expected, investors are still paying a premium for Nvidia’s future. This implies a lot of optimism that the AI demand will continue unabated (and so far, Nvidia has delivered). 

Should Canadians buy Nvidia? If you believe in the long-term AI infrastructure story, Nvidia is a core holding – but be cautious of the price you’re paying. The market may have already priced in years of AI growth. Any slowdown in AI uptake or new competition (e.g., improved chips from AMD, or AI-specific chips from Google/others, or even software that makes cutting-edge AI chips irrelevant – like China’s Deepseek) could hit Nvidia’s stock hard simply because expectations are sky-high. 

Analysts currently remain bullish (given Nvidia’s dominance and lack of real competition at the very high end), but even bullish analysts often acknowledge the stock isn’t cheap.

Microsoft (MSFT)

Microsoft might not seem like an “AI stock” at first glance. It’s a diversified tech giant known for Windows, Office, and Azure cloud services. Moreover, for many of us over 35, Microsoft might always be associated with boring spreadsheets and bad browsers!

However, Microsoft has emerged as a key player in AI, largely due to its partnership with (and heavy investment in) OpenAI, the creator of ChatGPT. Microsoft is integrating AI across its product range and using its massive distribution to bring AI to the masses. Microsoft invested billions (over $10 billion) into OpenAI and is the exclusive cloud provider for OpenAI’s services. 

In return, Microsoft has integrated OpenAI’s GPT models into products like Bing (for search with the AI-powered Bing Chat), Microsoft 365 Copilot (an AI assistant across Word, Excel, Outlook, etc.), GitHub Copilot (coding assistant), and Azure’s AI cloud offerings.

Essentially, Microsoft is weaving generative AI and machine learning into its software and cloud platform at an impressive scale. This gives it a potential competitive edge (e.g., making Office 365 more indispensable with AI features, or attracting cloud customers who want ready-made AI solutions on Azure). 

Microsoft’s Azure AI services also compete with Google and Amazon in providing AI infrastructure and APIs to enterprises. Market reaction: Microsoft’s stock has performed strongly in the past couple of years, buoyed by overall cloud growth and excitement around AI. In 2023, MSFT hit all-time highs as the market cheered its AI initiatives (with some dubbing it a new AI “arms dealer” and “platform” stock). Microsoft’s market cap is roughly $3.3-3.4 trillion USD, meaning that it is competing with Nvidia (and a couple others) for the title of most valuable company in the world.

Despite this massive size, the stock’s valuation is relatively moderate compared to pure AI plays: Microsoft trades at around 35× earnings (trailing P/E in the mid-30s). This is a premium to the broader market (the S&P 500’s P/E is about 18), but it’s nowhere near the multiple of other AI stocks. It reflects that Microsoft has a very profitable core business already, and AI is viewed as a major growth driver – but within an established company. 

Bottom line for investors: Microsoft offers a way to benefit from AI trends (like generative AI adoption) with a lot less volatility than many pure-play AI names. Its business is diverse and extremely cash-generative, which provides a cushion if certain AI bets take longer to pay off.

Taiwan Semiconductor Manufacturing Co. (TSMC)

Taiwan Semi (NYSE: TSM) is by far the world’s largest and most advanced contract semiconductor manufacturer. They build the chips that other companies design. Whenever you hear about cutting-edge AI chips (like Nvidia’s GPUs or Apple’s processors), chances are they’re made by TSMC. This makes TSMC a critical part of the AI supply chain, albeit one step removed from the flashy software applications. 

AI connection: TSMC is the foundry that produces integrated circuits for clients like Nvidia, AMD, Apple, and many others. In the context of AI, TSMC manufactures high-performance chips needed for AI computing – including Nvidia’s AI accelerators and specialized AI chips for various companies.

The surge in AI hardware demand ultimately means more business for TSMC (since Nvidia’s record-breaking orders translate into higher volume at TSMC’s fabs). TSMC’s technological leadership (especially its ability to reliably produce chips at 5nm, 3nm, and soon 2nm process nodes) is essential for the power and efficiency of AI processors. In sum, TSMC is an enabler of AI innovation behind the scenes. Without it, the AI boom would hit a manufacturing bottleneck. 

Compared to Nvidia or Microsoft, TSMC’s stock has been more tempered. It’s another very large company – its market cap is roughly US$850 billion (around C$1.1 trillion). TSMC trades at about 22-25× earnings (trailing P/E in the low-to-mid 20s), which is close to its historical average. 

Part of the reason is that TSMC’s growth, while solid, is limited by the cyclical nature of the semiconductor industry. In years of high demand (like during the pandemic and the current AI boom) it does fantastically, but it also faces cyclical downturns (PC/phone chip slowdowns, etc.).

Perhaps most importantly, TSMC has geopolitical risks that are unique amongst AI stocks. As a Taiwan-based company, there’s persistent concern over China-Taiwan tensions and what a disruption could mean. These factors keep TSMC’s valuation in check. It’s no stretch to say that TSMC is one blockade away from bankruptcy in a scenario that is looking increasingly likely.

For Canadian investors, TSMC offers exposure to the hardware foundation of AI with a relatively reasonable valuation and a dividend (TSMC yields around 1–2%). It’s listed on the NYSE as an ADR (TSM), so it’s accessible in any Canadian brokerage. The caution here is less about hype (the stock’s multiples are not outrageous) and more about understanding the unique risks: a manufacturing-heavy business requiring huge capital expenditure, and the geopolitical risk of its location.

If one is bullish that AI chip demand will stay strong and no major geopolitical event will intervene, TSMC could be a solid pick-and-shovel investment. But keep in mind, unlike a software firm, TSMC’s upside might be capped by how many chips it can physically produce and by the fact that it doesn’t capture the full high margins of the end products. It’s a crucial piece of the AI puzzle, just priced more modestly – reflecting both its stability and its risk profile.

Can I Use AI for Investing or Trading Stocks?

Beyond buying shares of companies that directly benefit from artificial intelligence, many investors wonder if AI tools can help them make better investments or trade more profitably. The short answer is: AI might be able to assist active traders with investing, but personally I don’t see much use for the average retail investor. They’re certainly no substitute for a Canadian financial advisor.

AI-Powered Stock Screeners & Trade Assistants:

A growing number of platforms claim to use AI (often machine learning or even GPT-like language models) to pick stocks or time trades. Examples include Danelfin, Tickeron, and various mobile apps that use AI to analyze news or charts. 

Some even let you chat with an AI to get stock analysis. These tools can rapidly sift through data – for instance, scanning financial reports or technical indicators – and highlight potential opportunities. Research on their performance is mixed. There are some headline-grabbing anecdotes out there such as one experiment in the UK had a portfolio of stocks selected by ChatGPT outperform top human-managed funds over a few weeks. Of course, random performance over a few weeks isn’t exactly something I’d base my personal portfolio on!

On the flip side, other AI-driven funds and tools have underwhelmed – notably, an AI-powered ETF (AIEQ) launched in 2017 has consistently underperformed the S&P 500 index in most years since inception. This suggests that while AI can crunch data, it isn’t a magic money tree; markets are complex and usually quite efficient over the long term.

To my way of thinking, the leading investment banks like Goldman Sachs, as well as the world’s largest hedge funds are pretty clearly going to be on the cutting edge of whatever artificial intelligence can do. You just have to look at high-frequency trading to support that theory. If we assume that all of these companies will continue to compete with each other, then it follows that AI will simply make them roughly equally good, and overall asset prices will continue to be priced efficiently!

Robo-Advisors and AI:

Canadian robo advisors such as Justwealth, Wealthsimple, RBC InvestEase, Questwealth (Questrade), and others, use basic algorithms to build and rebalance portfolios for clients. 

That said, I get a kick out of watching them trying to brand themselves as artificial intelligence. While following a passive investing strategy shows a high amount of human intelligence, there is nothing inherently “AI” about the rebalancing that a robo advisor does.

These companies are just trying to get their share of the AI glamour. Robo advisors are solid automated investing tools, but I don’t really see how AI helps them over the long-term. Maybe there is something there in terms of providing personalized advice at some point – but I think we are a ways away before I’d place much faith in that.

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AI Trading Bots and Signal Services:

Some fintech companies offer AI-based trading signals or even fully automated trading bots. These range from AI that does high-frequency trading, to bots that you can connect to your brokerage to execute trades based on AI pattern recognition. 

A few examples include algorithmic trading platforms that optimize strategies using machine learning, or services that use AI to analyze social media sentiment and then make trades. The key thing to understand is that markets adapt quickly, and what worked in the backtest is unlikely to work going forward. There’s also the issue of overfitting (an AI model might “learn” the past too specifically and not handle future volatility). 

To date, there’s little independent evidence that any off-the-shelf AI trading bot can reliably beat a simple index fund after fees and trading costs. Some may have hot streaks, but they can just as easily hit losing streaks. I have no plans to trust any of my personal money to them.

AI Investing Frequently Asked Questions

My Take on AI Investing In 2025

I often find myself playing “Devil’s Advocate” when it comes to just how important this AI revolution is. Look, anyone that tells you that AI doesn’t matter and it’s a fad is ill-informed and is probably scared of change.

I think it’s equally true (perhaps more so) that anyone that thinks AI is going to drastically change day-to-day life in the next three months is trying to sell something, or has bought way too far into the hype. 

By far the likeliest scenarios are somewhere in the middle. I see many instances where AI can be used to augment the best human workers in order to replace many lower-performing employees. I think many companies across broad swathes of the economy are likely to see their profit margins increase. But I don’t see AI or AI stocks quite living up to the expectations many investors seem to have right now. They certainly aren’t making it into our best low risk investments article any time soon!

Be especially skeptical of any company that seems to be inserting AI mentions into everything they do and every public statement they get just to appear trendy or “cutting edge.” I remember not to long ago when “blockchain” needed to be mentioned 10 times in every conference call, and all those pet projects have yet to yield any long-term efficiencies!

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