AI Innovation Takes Flight in Canada

As we approach the midpoint of the year, Canadian investors are wondering if it’s time to look beyond the border for exposure to Silicon Valley darlings. However, it’s essential to recognize that artificial intelligence (AI) innovation is not limited to the U.S. Canada is home to intriguing AI innovators that shouldn’t be ignored.

One such innovator is Cohere, the AI startup behind the Coral large language model (LLM). While Cohere is a private firm, there are other AI beneficiaries worth owning, even if they’re not pure-play AI firms innovating on the cutting edge of LLM technology.

“The pace of AI innovation is expected to continue, and a great deal of spending needs to happen, regardless of where interest rates head next.” - Joey Frenette

With the Bank of Canada winding down its interest-driven fight against inflation, it will be interesting to see how the Canadian consumer and economy behave over the next 18 months. Either way, it feels a lot nicer to have the Bank of Canada on your side rather than going against them with every painful hike in interest rates.

 AI innovation is taking flight in Canada

In this article, we’ll explore two soaring Canadian stocks that make sense to own now that rates are heading lower while AI continues driving gains in productivity, efficiency, and more.

Constellation Software: A Proven Market Beater

Constellation Software (TSX:CSU) is a proven market beater that’s continued to outrun the TSX Index so far this year, with more than 18% gains year to date. Indeed, a hot start to the year could easily follow a cooling off in the second half. However, given the pace of innovation, I wouldn’t be surprised if CSU stock surges past the $4,000 level (shares go for $3,841 and change today) before winter sets in.

 Constellation Software is a proven market beater

As more AI-leveraging startups look for funding, I expect Constellation will be there with a willingness to invest. Though it’s hard to tell which startups and venture capital-esque firms will make it and which will fall flat, I do think Constellation’s managers are the best at differentiating between the long-term winners and the ones that are going nowhere fast.

As a catalyst for innovation, I view CSU stock as a great buy, even with the hefty price tag. Perhaps one share will be enough of a needle mover for your portfolio. In due time, I do hope CSU stock splits, perhaps by 20-to-1, to make the name more accessible to everyday retail investors.

 AI startups are looking for funding

In conclusion, AI innovation is taking flight in Canada, and Constellation Software is well-positioned to benefit from this trend. With its proven track record and willingness to invest in AI-leveraging startups, CSU stock is a great buy for those looking to capitalize on the AI revolution.