If the software program sector sell-off has you rattled, here’s a title value including to your watchlist: CGI Inc. (TSX:GIB.A).
Valued at a market cap of $21.4 billion, CGI inventory is down over 35% from its 52-week excessive, permitting you to purchase the dip. The continued sell-off has additionally raised its dividend yield to 0.7%.
The Canadian tech inventory is down from its 52-week excessive, not as a result of the enterprise is damaged, however as a result of buyers are portray each IT firm with the identical “AI disruption” brush.
CGI isn’t a standard software program vendor. It’s an IT providers and consulting powerhouse with 50 years of working historical past, a +95% shopper renewal charge, and a steadiness sheet constructed for precisely this sort of market setting.
This seems to be like a traditional buy-the-dip alternative.
Supply: Getty Photographs
The AI-powered sell-off is a chance
The broader software program sector has been hammered in 2026. iShares Expanded Tech-Software program Sector ETF is down about 27% from its current excessive, deep into bear-market territory.
Buyers are fearful that AI can erode demand for conventional software program licenses and IT workflows. Nonetheless, CGI doesn’t promote software program subscriptions that AI may exchange in a single day.
The corporate manages complicated IT environments, modernizes legacy programs, and helps governments and huge enterprises determine how you can deploy AI in the actual world.
- Within the fiscal first quarter (Q1) of 2026 (led to December), CGI reported income of $4.1 billion, a rise of seven.7% yr over yr.
- It reported $4.5 billion in bookings, ending Q1 with a book-to-bill ratio of 110%.
- On a trailing 12-month foundation, complete bookings reached almost $18 billion, up 12% from the yr earlier than.
- With $31.3 billion in backlog, CGI presents important income visibility for shareholders whereas driving bottom-line development.
CGI’s board renewed its share-buyback program, authorizing the repurchase of as much as 19 million shares by way of February 2027. The corporate spent $577 million on buybacks in Q1, and CFO Steve Perron defined: “At present share worth ranges, we count on to stay very lively in our repurchase program.”
Is AI a tailwind for this TSX dividend inventory?
CGI is promoting AI adoption providers to the world’s largest enterprises and governments.
The administration famous that the pipeline of programs integration and consulting alternatives in superior phases is up greater than 40% yr over yr.
- Managed providers bookings are up 16% on a trailing 12-month foundation.
- The federal government pipeline alone is up 30% in comparison with this time final yr.
- Roughly 40% of CGI’s consultants now have experience in superior AI, double the quantity from a yr in the past.
- The corporate lately signed multiyear go-to-market alliances with each Google Cloud and OpenAI to assist enterprise shoppers deploy AI securely and at scale.
Analysts forecast the TSX inventory to increase earnings from $8.95 per share in fiscal 2026 to $12.64 per share in 2030. If the tech inventory is priced at 15 instances ahead earningswhich has similarities to its 12-month common, it ought to acquire 90% over the following 40 months.
CGI has navigated each main expertise cycle for 50 years, from outsourcing to cloud to cybersecurity and now to AI. Every wave created extra demand for what CGI does finest: serving to massive, complicated organizations modernize and function their IT.
At 35% off its highs, with report money stream, rising bookings, and administration shopping for shares hand over fist, CGI is a prime inventory to personal in March 2026.