Scotiabank Lifts Telus International (TIXT) Price Target on TELUS Digital Merger Plans

Telus International (NYSE:TIXT) is one of the best AI stocks to buy under $5. On September 4, Scotiabank raised the stock’s price target to $4.50 from $3.50. It also reiterated a ‘Sector Perform’ rating as the stock is up by about 11% year to date.

The price target hike comes on the heels of TELUS announcing plans to acquire all outstanding shares of TELUS Digital that it does not own for $4.50. The merger paves the way for closer operational and integration between the two units, enhancing artificial intelligence and software-as-a-service transformation across the telecommunications, healthcare, and consumer goods sectors.

Scotiabank has described the merger deal as the best possible outcome for shareholders, given the current macroeconomic environment.

“The transaction is fully reflective of our belief that closer operational proximity between TELUS and TELUS Digital will enable enhanced AI capabilities and SaaS transformation across all lines of our business, including telecommunications, TELUS Health and TELUS Agriculture & Consumer Goods, driving positive outcomes for the customers we serve on a global basis,” said Darren Entwistle, President and CEO of TELUS.

Telus International (NYSE:TIXT) provides AI-driven digital solutions globally, specializing in computer vision, data annotation, and search relevance to support enterprise applications. Its Fuel iX platform helps organizations manage and scale generative AI, while its services span cloud, automation, and customer experience across industries like fintech, healthcare, e-commerce, and media.

While we acknowledge the potential of TIXT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.