Investing in tech shares, notably AI sharesis changing into fairly the pattern nowadays for inventory market traders. Synthetic Intelligence (AI) expertise is just about in every single place now, making waves throughout each business. Healthcare, logistics, power, and even e-commerce segments are simply a number of the industries revolutionized by AI.
Amid all the thrill surrounding AI being utilized by corporations, just a few companies are leveraging the tech to create real-world options to handle urgent considerations. Whereas the AI market, as an entire, is rising, loads of alternatives exist for traders who need to capitalize on long-term development potential.
Towards this backdrop, Descartes Methods Group Inc. (TSX: DSG) is one such AI inventory that is perhaps the proper match for a lot of traders bullish on AI. Buying and selling at 18.7% beneath its 52-week excessive as of this writing, this low-flying AI inventory affords loads of causes to make it a great funding. Let’s have a look.
Descartes Methods Group
DSG is a $12.4 billion market capitalization firm headquartered in Waterloo that gives software program options for shoppers within the transport business. The International Logistics Community, which is its core providing, has quickly turn out to be the important thing issue for streamlining world provide chains. The platform lets shoppers ship/obtain messages, paperwork, and knowledge.
DSG generates income by charging shoppers for providing these companies in alternate for month-to-month or multi-year contracts. To make issues even higher, DSG affords further software program modules for extra performance for shoppers primarily based on their wants. Upselling further software program modules and providing them as a Software program-as-a-Service (SaaS) mannequin diversifies income streams for DSG.
Regardless of buying and selling at a big low cost from its 52-week excessive, DSG inventory is a stable enterprise. Its AI-powered instruments assist companies optimize transport, monitor their deliveries, enhance compliance, automate customs filings, and way more.
Latest efficiency
The worldwide financial state of affairs hasn’t been one of the best of late, however that hasn’t fazed DSG inventory and its efficiency. The enterprise is doing effectively, as mirrored in its newest earnings. The April 2025-ending Q1 for fiscal 2026 noticed the corporate’s income develop by 12% in comparison with the identical interval final 12 months. A powerful 93% of its income was from its high-margin companies, which contributed to most of its year-over-year development.
Descartes Methods’ adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) additionally rose by 12% year-over-year, and it reported a 4% internet revenue. Whereas the corporate’s sequential development was weighed down by seasonal softness and dearer restructuring, it ended the quarter with loads of liquidity and over US$176 million in money.
Silly takeaway
AI expertise has just about infinite potentialities for its real-world functions, and DSG has discovered a singular strategy to leverage the expertise to learn its shoppers and the enterprise itself, and drive shareholder worth development. The corporate is maximizing AI’s potential to enhance its choices.
From its Route Planner AI Advisor, serving to customers get one of the best configuration for supply networks, to specialised AI-powered instruments that assist customers seamlessly deal with cross-border transport logistics, it has loads of worth to supply and an enormous development runway forward.
In the event you imagine AI is the longer term, DSG inventory will be a superb holding for traders with a long-term technique.