It can be super risky to invest in pure artificial intelligence (AI) companies. Perhaps the sweet spot is to identify profitable companies for which AI can help drive higher growth for their businesses.

Here are a couple of top Canadian AI stocks with growth potential.

Open Text

Open Text (TSX:OTEX) empowers its customers to organize, integrate, and protect data and content, as it flows through business processes inside and outside their organization. Its AI-powered Intelligent Capture aims to reduce the cost and risk of labour-intensive processes, including property and casualty claims, mortgage lending, accounts payable, back-file conversion, customer onboarding, and HR management of employee documentation.

Intelligent Capture aims to learn to be smarter (and make less mistakes) over time as more and more data goes through, thereby helping companies save money and helping their staff save time.

Open Text has demonstrated a track record of growing its profits and dividend over time. It started paying a quarterly dividend in 2013, and it has raised its dividend every year since. For your reference, its five-year dividend growth rate is 10.9%. And its last dividend hike occurring earlier this month was 5.2%.

After its massive US$5.8 billion acquisition of Micro Focus in February 2023, the tech company has been focusing on reducing its debt levels. Due to its acquisitive nature and high debt levels, Open Text is a risky stock. Open Text ended fiscal 2022 with a long-term debt-to-capital ratio of 52%. The ratio jumped to 67% in fiscal 2023. It cut the ratio to 60% by the end of fiscal 2024.

The stock price is down 30% from its 2021 high of $64. Over the last decade, OTEX has delivered annual returns of only 5.7%. Its 15-year annual return of 11.3% is much more acceptable.

OTEX Dividend Yield data by YCharts

Analysts believe the stock trades at a discount of 13%. It also offers a dividend yield of 3.2%, which is relatively high compared to its historical levels. If it's able to turn around with the double-digit earnings growth it has achieved in the past, it could double investors' investment over the next five years!

Kinaxis

Kinaxis (TSX:KXS) is a tech stock that could experience substantial growth from the application of AI to empower its customers to intelligently control the supply chain digitally. It believes that machine learning and 24/7 analytics will increase efficiency and allow for confident decision-making.

In the trailing 12 months, Kinaxis generated total revenues of US$457.7 million, gross profit of US$277.3 million, operating income of US$20.6 million, and net income of US$21 million.

Kinaxis stock has been trading somewhat sideways since mid-2020. Its more recent trading activity suggests that the $140 level serves as a support. Valuation-wise, analysts believe the tech stock trades at a discount of about 19% with near-term upside potential of 23%. Holding the stock longer has the potential to double investors' money over the next few years.

For more diversification, investors can consider exchange traded funds such as the iShares U.S. Technology ETF.