Does it have a chance to go on the AI bandwagon trend?
Are there any AI companies in Canada that have a chance to become a big success in this field?or you think its mostly hype?
The market has not liked TIXT's decline in free cash flow and profits, along with its increase in debt. Higher operating and interest expenses have been eating into margins over the past few quarters. Higher interest expense comes from an increased debt balance needed to fund the acquisition of WillowTree. We feel that the acquisition will be a good move in the long run, and do expect the debt to come down with cash flow. We continue to like the name and feel that it is well-priced at only 12X earnings, but we would certainly like to see more positive momentum. We have not seen material insider buying reported. AI has several AI initiatives and last year opened an AI data solutions centre in Ireland. It is for now a small component. There is lots of AI hype, and we would prefer US mega cap companies. The amount of money to be spent is huge and we do not think smaller companies have any advantage.