Is BCE actually an AI play?

Newhaven Asset Management analyst Rebecca Teltscher says BCE (BCE Stock Quote, Chart, News, Analysts, Financials TSX:BCE) is a defensive telecom name with an underappreciated AI data centre opportunity.

Speaking on BNN Bloomberg’s Market Call on July 8, Teltscher named BCE as one of her top picks, citing its stable core telecom business, high barriers to entry and growing data centre exposure.

She said BCE has diversified beyond traditional telecom through AI-related data centre deals, including sovereign data infrastructure and a large Saskatchewan data centre tied to a hyperscaler.

“If you think about it, especially with geopolitical conflicts everywhere, you want Canadian data stored in Canada,” Teltscher said.

She said BCE offers a lower-risk way to play AI data centre growth because it is not taking on hardware risk tied to chips or computing equipment.

“It is the safest way by far to play that AI data center growth because you’re not taking on that technology risk, and you’re also not paying huge valuations for it,” Teltscher said.

Teltscher said the telecom sector remains out of favour, which may explain why BCE shares have not moved more in response to its data centre announcements.

“They are expecting $2-billion in AI revenue by 2028, but the stock hasn’t moved,” she said.

The stock was down 4.02% over the previous 12 months and 50.95% over five years. Of the analysts covering the stock, nine rated it “Buy,” six rated it “Hold” and three rated it “Sell,” with a consensus target of $27.08.

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