AI fears sink Stantec and WSP shares, turning the high-flying engineering firms into TSX laggards
Shares of Canadian engineering firms Stantec and WSP have declined significantly due to fears that artificial intelligence will impact their profitability. Despite reporting organic revenue growth, investors remain concerned about the potential for AI to replace traditional consulting roles. This trend is not limited to Canada, as similar firms in the U.S. are experiencing stock sell-offs as well.
- ▪Stantec's shares have dropped 23.7% and WSP's shares have fallen 23.1% over the past six months.
- ▪Both companies reported organic revenue growth of 3% to 5%, indicating expansion without acquisitions.
- ▪The decline in stock prices is attributed to fears that AI will perform tasks currently charged at high fees by consultants.
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ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountFears that artificial intelligence will eat into corporate profits have hit another corner of the Toronto Stock Exchange, with shares of Canada’s leading engineering companies sinking despite solid financial results.Over the last two weeks, Montreal-based WSP Global Inc. WSP-T and Edmonton-based Stantec Inc. STN-T both reported organic revenue growth of 3 per cent to 5 per cent, meaning their existing businesses are expanding without the help of new acquisitions, yet investors continue to sell their shares over concerns that AI will eventually make a good chunk of their work evaporate.The fear is that AI will be able to cheaply, and easily, perform tasks that consultants currently charge hefty fees for.
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