Where is the AI Gold Rush, Canada?
The tech-centric artificial intelligence (AI) investing buzz that’s causing a frenzy in the US hasn’t quite caught on in Canada yet. Yes, that’s right, the very same AI that is practically writing the future as we know it. It’s not a joke, it’s a fact. If we look at the S&P/Toronto Stock Exchange Composite Index, it’s been barely keeping up with the pack, showing a measly 2.2% gain so far this year. It’s like the kid who’s always picked last in dodgeball.
The AI Juggernaut and the American Market
Now, if we flip the script and take a gander at our friends in the United States, it’s a completely different story. The S&P 500 is riding high, showing off a robust 15% gain. The major driving force behind this stellar performance? You guessed it: AI. The information technology sector, the cool kids’ table of the stock market, is buzzing with activity, thanks to this AI investing extravaganza.
Canada: Late to the Party or Fashionably Late?
However, BofA Securities’ whiz Ohsung Kwon has a different view of things. He believes that the Canadian equities have been merely biding their time and predicts a promising upswing in the second half of 2023. The tech sector might be the flavor of the season now, but he anticipates a shift back to the tried-and-true value stocks – the Canadian markets’ bread and butter.
The Canadian market’s quiet stars, sectors like financials, materials, and energy, will reap the rewards of AI without shelling out the big bucks to develop it, according to Kwon. A clever move or an oversight? Time will tell.
A Hint of AI in the Great White North
Even though the tech sector represents a small slice of the Canadian market pie, at just 7.7%, it’s been leading the charge this year in Toronto. A ray of hope emerges from Ottawa-based Shopify Inc., which rode part of the AI wave with its new AI shopping assistant powered by OpenAI’s ChatGPT AI. Ivana Delevska of SPEAR Invest believes that this could be just the tip of the iceberg for Shopify, with AI poised to boost their fortunes in the upcoming quarters.
So, is Canada late to the AI party or is it just making a grand, fashionably late entrance? Let’s wait and see.
