The artificial intelligence (AI) revolution is in full swing, and while much of the focus has been on U.S. tech giants, several Canadian AI stocks are showing considerable promise. As AI adoption accelerates across various industries, companies offering innovative AI-driven solutions could experience significant growth in the years to come.
Some Canadian companies are already harnessing AI to boost their efficiency, enhance data analysis, and drive automation, positioning them for sustained growth. In this article, I’ll highlight two top AI stocks on the TSX that could see substantial gains as the AI boom continues into 2025 and beyond.
OpenText Stock
If you’re seeking a Canadian AI stock with strong fundamentals and long-term potential, OpenText (TSX:OTEX) should be on your radar. Based in Waterloo, this tech company focuses on information management, offering enterprise software solutions that help businesses streamline operations and utilize AI-powered analytics.
Currently, OTEX stock trades at $38.07 per share, with a market cap of $10.1 billion. For income-focused investors, it also provides a quarterly dividend with an annualized yield of around 4%.
In the most recent quarter ending December 2024, OpenText reported US$1.33 billion in revenue, with cloud revenues rising 2.7% year-over-year. Although total revenue declined YoY due to a previous divestiture, the company’s profitability remained strong. Its adjusted quarterly EBITDA increased by 13% sequentially, reaching US$501.5 million, with an adjusted EBITDA margin of 37.6%. This shows OpenText’s ability to maintain strong profitability despite macroeconomic challenges.
What makes OpenText even more appealing is its continued expansion into AI and cybersecurity. The company recently launched an AI-driven security platform, Core Threat Detection and Response, designed to help businesses better defend against cyber threats. With its increasing focus on AI integration in both cloud and cybersecurity offerings, OpenText stands to benefit from the growing demand for automated threat detection and advanced data management solutions.
Kinaxis Stock
When it comes to AI-driven growth, Kinaxis (TSX:KXS) is another Canadian tech stock to watch. Based in Ottawa, Kinaxis specializes in AI-powered supply chain management, helping companies optimize logistics, forecasting, and inventory through its AI-enhanced Maestro platform. Currently, KXS stock trades at $152.66 per share, with a market cap of $4.3 billion.
Kinaxis ended 2024 on a high note, with total annual revenue increasing 13% year-over-year to US$483 million, while its software-as-a-service (SaaS) revenue jumped 17% from the previous year. The company also achieved a record number of new business wins, reflecting the growing demand for its AI-driven supply chain solutions. More importantly, Kinaxis saw significant improvements in profitability, posting a 42% YoY increase in adjusted EBITDA to US$106 million, pushing its margin from 18% to 22%.
Looking ahead, Kinaxis plans to further enhance its platform with generative AI and agentic AI capabilities to make supply chains even smarter, faster, and more predictive. As AI adoption continues to accelerate globally, KXS stock could see strong gains over the long term.
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