Investors looking to capitalize on the growth of artificial intelligence (AI) should explore opportunities beyond tech companies. Various industries stand to benefit from the expansion of AI infrastructure and the implementation of customized AI solutions.
One such company is TC Energy (TSX:TRP), a leader in energy infrastructure. Despite not being traditionally associated with AI, TC Energy highlighted the potential for AI growth in its recent Q2 2024 financial results. This acknowledgment has contributed to a 12% increase in TC Energy’s share price over the past month, currently trading around $60 per share.
With over 90,000 km of natural gas pipelines and 650 billion cubic feet of natural gas storage capacity across North America, TC Energy is strategically positioned to support the growing number of AI data centers in the region. These data centers are increasingly turning to on-site power generation facilities to ensure reliable operations, with natural gas emerging as a popular option due to its abundance and relatively low cost compared to traditional fuels like oil or coal.
Furthermore, TC Energy’s planned capital investments of $6 billion to $7 billion per year on growth projects are supported by reduced borrowing costs resulting from interest rate cuts. As new assets come online, investors can expect steady cash flow growth to support dividend increases. TC Energy has a track record of increasing dividends for the past 24 years, offering investors a 6.4% dividend yield at the current share price.
Similarly, Royal Bank (TSX:RY), Canada’s largest bank with a market capitalization exceeding $200 billion, is leveraging AI solutions to enhance operational efficiency and drive returns on equity. By utilizing customized AI programming, Royal Bank can analyze customer data more effectively, leading to faster processing times for financial products and services across its retail and commercial segments.
Although trading near its 12-month high, Royal Bank provides investors with a quality investment option and a 3.8% dividend yield at the current share price around $150. Both TC Energy and Royal Bank exemplify non-tech companies poised to benefit from the AI boom, making them worthy additions to a long-term investment portfolio.
