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The artificial intelligence (AI) sector has been a major focus in the markets, particularly since the launch of advanced language models that have demonstrated the technology's transformative potential. As interest in AI continues to expand, there are opportunities beyond the well-known tech companies that provide the underlying infrastructure for AI. This article examines two Toronto Stock Exchange (TSX) growth stocks positioned to benefit from the expansion of AI through their use of the technology.
Manulife's AI-Driven Innovations
Manulife (TSX:MFC) is a prominent Canadian financial services and insurance company with a global presence. The firm has significantly invested in technology to enhance its operations and service delivery. AI plays a crucial role in these advancements, offering the potential to revolutionize both its insurance and wealth management divisions.
Manulife is integrating AI to improve customer interactions, utilizing chatbots and automated systems to streamline communication and service. Additionally, the company is exploring AI-driven tools for portfolio analysis and investment insights. By viewing client data, AI helps in creating personalized product recommendations and assessing risks. The company's efforts extend beyond insurance to its wealth management sector, which operates under the John Hancock brand.
Over the past year, Manulife's stock has increased by nearly 50%. The firm reported robust results for the second quarter of 2024 and is focusing on reducing risk while aiming for high returns. Current shareholders benefit from a dividend yield of 4.5%.
TC Energy's Role in AI and Energy Infrastructure
TC Energy (TSX:TC) is a leading player in the Energy sector, operating an extensive network of natural gas pipelines and storage facilities across North America. The company has identified AI as a key factor in meeting the future demand for natural gas, particularly with the growth of data centers that support AI technologies.
Data centers require significant energy, and as AI programs become more prevalent, the demand for reliable power sources is expected to rise. TC Energy’s infrastructure is strategically positioned near a large number of planned or developing data centers in the U.S., enhancing its role in providing the necessary energy resources.
In its second-quarter 2024 earnings report, TC Energy highlighted its proximity to many data centers, which could drive future growth in natural gas demand. Despite a 25% increase in its stock price over the past year, it remains below its 2022 peak. The current dividend yield for TC Energy stands at 6.3%.
