How to Invest in AI Stocks in Canada [2024] | Step-by-Step

Summary: Artificial Intelligence (AI) has emerged as one of the most transformative technologies of our time, reshaping industries, powering innovations, and altering how we live and work. In the face of AI’s grand expansion, investing in AI stocks may present a strategic and long-term opportunity for enhancing your investment portfolio. To buy AI stocks in Canada, consider utilizing Interactive Brokers, a trusted and regulated online trading platform.

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• Low commissions starting at $0 with no platform fees or account minimums

• Easily fund your account and trade assets in 26 currencies

• IBKR pays up to 4.58% interest on cash balances of $10k or more

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About AI

Artificial Intelligence (AI) refers to the simulation of human intelligence in machines, enabling them to perform tasks that typically require human cognitive functions such as learning, reasoning, problem-solving, and decision-making. AI systems employ algorithms and data-driven processes to analyze information, adapt to changing conditions, and improve their performance over time. AI finds applications in various domains, from voice assistants and self-driving vehicles to medical diagnostics and financial analysis, reshaping industries and problem-solving on a scale previously unattainable.

How to invest in AI stocks in Canada: Step-by-step

Follow these five steps to invest in AI stocks:

Step 1: Choose a company to invest in

Investing in any disruptive new sector is a risk. Plus, with growing competition, it can be challenging to pinpoint the companies that will ultimately triumph. But when it pays off, it can pay off big.

Some investors may opt to invest directly in companies specializing in AI development, seeing potential in the technology itself. Others might choose to invest in companies poised to gain the most from AI’s broader integration and application, capitalizing on how AI innovation will affect different sectors and industries. 

Here’s a look at some of the best AI stocks currently available:

1. Nvidia (NASDAQ: NVDA);
2. Microsoft (NASDAQ: MSFT);
3. Amazon (NASDAQ: AMZN).

1. NVIDIA 

The company’s AI focus: Supplier of AI hardware and software

Market capitalization: $1.19 trillion

NVIDIA has solidified its position as a linchpin in the AI industry, primarily due to its pioneering role in graphics processing unit (GPU) technology. Initially designed for rendering graphics, these GPUs have proven invaluable for AI computations, particularly in machine learning and deep learning. As AI applications have exponentially grown in complexity, the demand for NVIDIA’s high-performance microchips has surged. 

The company’s commitment to innovation, evident in collaborations with tech giants like Oracle (NYSE: ORCL), and its comprehensive AI platform encompassing chips, systems, and software, further underscore its central role in advancing and shaping the AI landscape.

NVIDIA stock price today

2. Microsoft 

The company’s AI focus: A wide range of AI products 

Market capitalization: $2.76 trillion

Microsoft is pushing the envelope with its AI ventures. A standout move was its hefty $13 billion investment into OpenAI (the mastermind behind the renowned AI model ChatGPT), which, according to the company, contributed to the 8.3% increase in shares seen last year. 

Beyond investments, AI is seamlessly integrated across Microsoft’s spectrum, from the Bing search engine and Microsoft 360 suite to sales tools, Xbox gaming platforms, and the coding utilities of GitHub. To bolster its AI commitment, Microsoft has also devised a robust framework for AI app development and copilots, expanding its footprint in the burgeoning AI plugin landscape.

Microsoft stock price today

3. Amazon

The company’s AI focus: Generative AI, e-commerce

Market capitalization: $1.55 trillion

Amazon has become a significant force in the AI industry through a multifaceted approach. Its cloud computing arm, Amazon Web Services (AWS), offers a wide range of AI tools, enabling businesses to leverage machine learning and deep learning capabilities into their existing systems.  

Indeed, Amazon’s consumer-focused AI applications, such as personalized recommendations and voice-activated virtual assistant Alexa, have redefined user experiences. Additionally, Amazon’s investments in AI-driven automation within its warehouses underscore its commitment to technological innovation.

Amazon stock price today

Beyond the well-known names, other AI companies you might consider investing in include: 

• Google Bard;
• Bing AI;
• Upstart Holdings;
• Baidu;
• C3.ai;
• Dynatrace;
• Veritone;
• Splunk;  
• Synopsys;
• BrainChip;
• UiPath;
• Snowflake;
• Deepmind;
• Databricks.

Step 2: Choose a broker and set up an account

The initial step for those new to stock trading and eager to invest in AI stocks involves setting up a brokerage account. As you evaluate potential brokers, keep these factors in mind:

• Product offering: Verify that the broker offers access to the specific AI stocks you’re interested in as well as any other assets that interest you, such as mutual funds and ETFs, bonds, and currencies, as well as more complex derivative financial instruments like options or futures;
• Cost: Understand the broker’s fee structure, including commission rates, spreads, account maintenance fees, and any hidden charges;
• Regulation and security: Make sure the broker is authorized by the relevant governing bodies and confirm they have adopted the appropriate safeguards to shield your data and funds;
• Fractional share trading: Check if the broker offers fractional shares. This will allow you to purchase shares by the dollar amount and help you set up a dollar-cost averaging (DCA) strategy.

To securely invest in AI stocks in Canada, we recommend Interactive Brokers (IBKR), which offers: 

• Commission-free stock and ETF trading;
• Trade stocks on 90+ market centers;
• Fractional stock trading;
• Earn extra income on fully paid shares;
• Lowest financing rates for margin accounts in the industry;
• No account minimum. 

Best Platform for Worldwide Stock Trading & Investing

• Highly trusted multi-asset broker with clients in over 200 countries

• Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

• Low commissions starting at $0 with no platform fees or account minimums

• Easily fund your account and trade assets in 26 currencies

• IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

Get Started

Step 3: Fund your account

After successfully registering an account, the next step involves depositing funds into it. This can generally be done through various methods, including bank transfers, debit or credit cards, or third-party payment platforms such as PayPal (PYPL). 

With your account funded, you are ready to begin investing.

Step 4: Place your order

Place your order by following these four steps:

• Step 1: Search for your desired AI stock by using its ticker symbol CVE;
• Step 2: Secondly, determine how you want your order to be executed, with a market (filled immediately) or a limit order (filled at your predetermined price point);
• Step 3: Decide the number of shares or the dollar amount you want to buy;
• Step 4: Review all the details before clicking ‘Buy’ or ‘Open Trade’ to ensure they’re correct. Once happy, submit the order to your broker for execution.

Step 5: Monitor your investment

To effectively monitor your investments in AI, periodically assess the performance and impact of your AI-related holdings within your portfolio. Additionally, stay informed about industry trends, technological advancements, and market dynamics that could influence the value of your investments. 

Pros and cons of investing in AI

Pros

• Growth potential: The integration of AI into business operations and everyday life is likely to be a long-term trend, offering the opportunity for sustained growth;
• Competitive advantage: Companies that adopt AI early and effectively may gain a competitive edge by offering improved customer experiences, personalized services, and unique solutions;
• Diversification:  Investing in AI-related stocks or funds can provide diversification within a portfolio, potentially reducing overall risk;
• Early mover advantage: Getting in on the ground floor of a promising AI venture can potentially lead to significant long-term returns as the technology matures and adoption increases.

Cons

• Valuation concerns: The hype around AI can lead to the overvaluation of certain stocks, potentially resulting in a correction when expectations aren’t met;
• Regulatory risks: The AI industry could face increased regulation as concerns around privacy, ethics, and bias in AI algorithms grow;
• Competitive landscape: The AI sector is competitive, and not all companies may succeed in bringing their AI technologies to market or generating substantial revenue;
• Lack of profitability: Some AI companies may focus more on research and development than on profitability in the short term, which could impact their stock performance.

In conclusion 

In short, to invest in AI stocks in Canada, follow these five steps:

1. Firstly, select the AI company you want to invest in;
2. Choose a broker and open an account with them;
3. Fund your account;
4. Buy the AI stock;
5. Finally, periodically monitor your position.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about how to invest in AI stocks in Canada

Best Platform for Worldwide Stock Trading & Investing

• Highly trusted multi-asset broker with clients in over 200 countries

• Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

• Low commissions starting at $0 with no platform fees or account minimums

• Easily fund your account and trade assets in 26 currencies

• IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

Get Started