AI Needs Power and Servers: 2 Stocks I’d Buy Right Now

Artificial intelligence (AI) can’t run in a vacuum. It needs electricity, servers, and data moving through complicated systems without breaking down. That’s why the AI boom may reward more than the obvious chip stocks. For Canadian investors, two TSX names offer a practical way into the same trend: Hydro One (TSX:H) and CGI (TSX:GIB.A).

H

Hydro One owns and operates electricity transmission and distribution assets across Ontario. The company doesn’t build data centres or design AI models. It moves the electricity that homes, businesses, factories, and future digital infrastructure need. As Ontario’s electricity demand rises, Hydro One’s grid becomes more important.

Ontario’s system operator now forecasts electricity demand to rise 65% over its planning period. Data centres sit among the more variable drivers, along with electric vehicles (EV) and other new sources of load. In other words, the grid needs to prepare for a future with much more power demand and far more uncertainty.

Hydro One gives investors a steadier way to invest in that buildout. In the first quarter of 2026, the company reported earnings per share (EPS) of $0.56, up from $0.49 a year earlier. It also invested $840 million in capital projects during the quarter. Those investments help maintain and expand the system, and over time they can support rate-base growth.

The dividend adds to the appeal. Hydro One pays a quarterly dividend of $0.35 per share yielding 2.5% at writing. All while trading at 25% times earnings. The risk comes from regulation and interest rates. Hydro One must work with regulators to earn returns on its assets. Higher borrowing costs can also squeeze utilities because they fund large projects with debt. The stock probably won’t deliver explosive gains but offers electricity infrastructure for a power-hungry economy.

GIB

CGI stock brings the server and software angle. The company provides IT consulting, systems integration, managed services, cloud, cybersecurity, and business-process support. That might sound less exciting than owning a chipmaker, but plenty of businesses still need help moving from old systems to modern platforms before they can use AI properly.

AI projects don’t work well if companies sit on messy data, outdated systems, weak security, or fragmented cloud tools. CGI stock helps clients modernize those systems and turn technology spending into practical business outcomes. It also works across government, financial services, health, manufacturing, utilities, and other sectors where clients need reliability more than buzzwords.

The latest quarter showed steady growth. In Q2 fiscal 2026, CGI stock reported revenue of $4.2 billion, up 3.3% from last year. Diluted EPS rose 10.6% to $2.09. Backlog also stood at $31.5 billion, or 1.9 times annual revenue. That backlog gives the business a nice cushion, especially when clients take longer to approve new projects.

CGI stock has also leaned into AI partnerships. In April, it announced a strategic collaboration with Amazon Web Services to accelerate trusted AI, secure cloud adoption, and implement digital transformation across the U.S. public sector. Meanwhile, it offers a small dividend of $0.68 annually, or a 0.8% yield.

Bottom line

AI needs more than one kind of investment. Hydro One offers the power backbone. CGI stock offers the technology backbone. One stock brings regulated infrastructure and dividends. The other brings consulting, cloud, and AI services. And even a small investment of $7,000 can be enough to start compounding returns.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTH$57.08122$1.40$170.80Quarterly$6,963.76GIB.A$85.6581$0.68$55.08Quarterly$6,937.65

For investors looking beyond the obvious names, these two Canadian stocks look like smart buys right now.

The post AI Needs Power and Servers: 2 Stocks I’d Buy Right Now appeared first on The Motley Fool Canada.

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More reading

• 5 Canadian Stocks Beginners Can Buy and Hold Forever
• Turn Your $14,000 TFSA Into a Cash-Gushing Machine
• The Dividend Stock I’d Pick Over Enbridge Stock, and Why I Keep Coming Back
• 3 Canadian Stocks That Could Be an Ideal Fit for a $7,000 TFSA Investment
• The Canadian Companies Building AI Infrastructure and Why They Matter

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Amazon and CGI. The Motley Fool has a disclosure policy.