BNN-3267343-FullepisodeMarketCallforWednesdayDecember32025

Key Concepts

Market Volatility and Health: The market is currently experiencing healthy volatility, with recent rallies and potential for consolidation.
AI Ecosystem Evolution: The tech story is shifting from infrastructure build-out to optimization, with a significant change expected in 2026 towards autonomy, large-scale industrial deployment, and broader economic impact of AI.
Sectoral AI Adoption: AI adoption is visible across financials, healthcare, transportation, and entertainment, with large enterprises leading the way.
Specific Stock Analysis: Detailed insights and price targets are provided for Micron, Dell Technologies, Visa, Shopify, Quantum Emotion, Kraken Robotics, Snowflake, Oracle, Alphabet, Monday.com, Uber, Arista Networks, Constellation Software, Galaxy Digital, Netflix, Microsoft, Meta Platforms, and Walmart.
Investment Strategies: Recommendations include buying on dips, holding core positions, writing calls against positions, and waiting for new management to prove themselves.
AI Integration in Business: Discussion on how companies can leverage AI for operational efficiency and customer experience.
Past Picks Performance: Review of previous stock recommendations and their current performance.
New Top Picks: Identification of Microsoft, Meta Platforms, and Walmart as current top investment opportunities.

Market Outlook and Tech Story Evolution

The North American markets, typically strong at year-end, are showing more volatility this year. However, this is considered a healthy sign by Kim Bolton, President and Portfolio Manager of Black Swan Dexterity US. He notes that after a period of uncertainty where indices like the NASDAQ and S&P 500 seemed poised for deeper corrections, positive reports from the AI ecosystem have led to a rebound. The NASDAQ, for instance, has gained significantly in the past week. Bolton anticipates some consolidation in the coming weeks, partly due to the unwinding of the Yen carry trade, but expects a decent rally overall.

Evolution of the Tech Story

Over the last three years, the tech sector has seen phenomenal growth driven by the build-out of compute infrastructure for AI, data centers, and cloud services. Bolton foresees a shift towards optimization of existing resources, focusing on maximizing value per dollar and watt.

A significant sea change is anticipated for 2026, marked by a rotation within the technology arena. Key developments expected include:

Autonomy: Increased presence of robotics and software agents.
Large-Scale Industrial Deployment: Widespread adoption of technologies in industrial settings.
Economic Impact of AI: AI will start to permeate the economy and enterprises, beginning with large companies and extending to medium and small businesses, demonstrating tangible economic gains.

This AI-driven efficiency is already being observed in sectors like financials, healthcare, transportation, and entertainment, primarily by large enterprises with substantial investment capacity. The trend is expected to broaden across businesses of all sizes.

Stock Analysis and Investment Recommendations

Micron (MU)

Current Situation: Micron is performing exceptionally well, described as "on fire."
Market Dynamics: While the storage and memory segment (DRAM, NAND, High Bandwidth Memory) is typically cyclical, demand from the AI, data center, and cloud sectors is exceptionally strong and expected to persist.
Price Target: Currently trading around $233-$234, with a 12-month price target of $286, indicating a decent runway for growth.

Dell Technologies (DELL)

Recent Performance: Dell reported strong results, and Michael and Susan Dell have made a significant philanthropic donation of $6.25 billion to low-income and homeless families.
Stock Performance: Trading around $134, up only 6% year-to-date.
Outlook: Bolton's firm likes Dell and recently re-entered the position. They have a 12-month price target of $164.
Key Strengths: Dell's networking and switch/router business is a strong performer, offsetting the impact of its screen business. It's considered a good play within AI infrastructure and networking.

Visa (V)

Current Situation: The stock has been declining and trading sideways since June, showing more volatility than usual.
Business Model: Visa owns the payment systems and generates significant revenue from them.
Challenges: Visa is facing competition from digital-first consumer credit companies. While Visa is developing initiatives like Visa Direct, B2B Connect, and Visa Treasury as a Service, it's struggling to integrate AI as effectively as some competitors.
AI Application: While AI can be used for business model efficiency, Visa has not yet fully leveraged it to enhance the customer experience.

Shopify (SHOP)

Recent Performance: Shopify merchants had excellent Black Friday sales, with peak sales reaching $5.1 million per minute.
Outlook: The firm owns Shopify but considers it "pretty well priced" after a significant run-up.
Price Target: Trading around $156 (US) / $222 (CAD). The US price target is $174, which is within 10% of the current price.
Strategy: When a stock gets within 5-10% of the price target, the firm starts writing calls against the position.
Valuation: The stock is considered close to being fully valued.
Options Strategy: Short-dated calls (1-2 weeks, 1 month) with strike prices of $175-$180 can generate good premiums due to high volatility.

Quantum Emotion

Business: Involved in quantum technology, specifically focused on the security of wallets. They have developed a cutting-edge technology with no current competitors, applicable to quantum computing and crypto.
Recommendation: Always hold as a core holding, with a suggested allocation of 1-1.5% of a portfolio due to its small-cap nature.
Investment Strategy: It's a tradable stock with opportunities to buy on dips and take profits on spikes. The company has no intention of being acquired, indicating a long-term runway.

Kraken Robotics

Business: Specializes in underwater robotics.
Market Drivers: Expected to benefit from increased defense spending.
Pivot: The company has successfully pivoted from serving treasure hunters and the oil/gas exploration sector to defense applications.
Investment Strategy: Buy on dips. The stock is tradable, and a core position of 2-3% is recommended, with profit-taking as it grows towards 5%.

Snowflake (SNOW)

Business: A key player in cloud and data centers, enabling companies to maneuver efficiently through the cloud. It's a cloud-based data storage company with analytic solutions.
Valuation: Considered "rich" at current levels.
Price Targets: The firm's price target is $265-$270, while the average analyst target is $231.
Buying Opportunity: The firm would buy around $246, or just ahead of the $231-$233 range. A dip to $215-$220 would present a strong buying opportunity.

Past Picks Review

Oracle (ORCL)

Original Recommendation (Dec 31st last year): $166.60.
Current Performance: Trading at $202.28, showing a 22% upside and 23% total return.
Rationale: At the time, the focus was on compute infrastructure for AI, and Oracle was seen as an overlooked player with potential to become a leader alongside AWS, Google, and Azure.
Current Outlook: Despite volatility and a pullback from highs over $300, it's still up 20%. Bolton considers it a buy at current levels.
Concerns and Strengths: The company has borrowed heavily for data center expansion, similar to government debt burdens, but is expected to manage it. Oracle offers a comprehensive suite of software beyond just cloud and data centers, with strong potential for growth next year.

Alphabet (GOOGL)

Original Recommendation (Dec 31st last year): $189.30.
Current Performance: Trading at $319.70, a 69% upside and 69% total return.
Rationale: Despite initial concerns about its AI speed, Alphabet has excelled due to its control over "pipes" (chips like Tensor Processing Units) and "eyeballs" (search engine dominance).
Position Management: The firm has trimmed its position as it grew to 10% of the portfolio, as they never hold more than 10%.
Outlook: Considered a "miraculous story" with significant tailwinds.

Monday.com (MNDY)

Original Recommendation (Dec 31st last year): $235.40.
Current Performance: Trading at $149.80, a 36% drop.
Business: Focuses on low-code/no-code technology for work management, collaboration, and operational tools (HR, finance).
Valuation: Considered cheap, trading at around 14 times FY26 free cash flow and 4 times revenue.
Recommendation: The firm is adding to its position, finding the valuation compelling.

Stock Analysis (Continued)

Uber (UBER)

Performance: Up 24% in the last year, trading around $90-$92.
Outlook: The firm has a positive outlook with a 12-month price target of $111.50.
Growth Drivers:
- Geographic Expansion: Strong presence in North America, with potential for further expansion globally (e.g., Delhi).
- Autonomous Partnerships: Recent partnership with Hyundai on robotaxis, positioning it to compete with Tesla in the latter half of 2026.
Recommendation: It is recommended to start a position at the current level.

Arista Networks (ANET)

Performance: Up 320% over the last three years, trading around $127.
Business: A pure play in data center and cloud networking, focusing on Ethernet switches and routers. Founded by former Cisco executives.
Price Targets: Average analyst target is $160, with the firm's target at $164, indicating a decent runway.
Recommendation: The firm owns it and recommends buying at the current level, or on dips between $110-$120.

Constellation Software (CSU)

Current Situation: The stock has come down recently, and the long-time leader has stepped aside, raising questions about future leadership and the sustainability of its business model (acquiring and improving software companies).
Analogy: Compared to Berkshire Hathaway when a patriarch steps down.
Recommendation: The firm lightened its position when it went above $3500 and would love to get back in. However, it's advised to wait a couple of quarters to assess the performance of the new management.
Consensus: 73% hold, 26% buy (14 buys, 5 holds).

Galaxy Digital (GLXY)

Business: A technology-driven financial services company involved in asset management, investment banking, principal investing, and digital infrastructure services (mining, staking, custodial technology).
Market Indicator: Seen as a "mini Coinbase" and a barometer for cryptocurrencies.
Recommendation: If one believes Bitcoin has established a base around $93, buying into companies like Galaxy Digital or Coinbase is recommended because they are real companies with revenue.
Financials: A $17 billion company with Q3 revenues of $29 billion.

Netflix (NFLX)

Market Position: The dominant streaming service globally, with approximately 300 million paid subscribers.
Growth Strategy: Potential for growth through international expansion and acquisitions (e.g., Warner Brothers, though this would be costly).
Valuation: Trading around $104, considered a bit rich with a P/E in the mid-40s, and facing competition.
Recommendation: Despite being rich, it's recommended to buy some here and potentially add to the position in the mid-$90s. The recommendation is based on its leadership position in streaming.

New Top Picks

Microsoft (MSFT)

Recent News: Some clients are reportedly slowing down infrastructure additions, indicating a phase of optimization after significant build-out.
Outlook: Despite this, Microsoft's recent pullback or consolidation is seen as a great opportunity.
Key Strengths:
- Azure: Cloud segment contributes about 40% of revenue.
- Capital Expenditures: Capex is pressuring free cash flow, but a significant decline in free cash flow is expected in coming quarters.
- Valuation: Forward P/E and equity value to sales multiples are in line with 5-year averages, making it a good time to buy a leader.
- Diversification: Has multiple strengths across software, hardware, and AI.
Price Target: Current trading around $485-$490, with an average analyst price target of $625, indicating $125 or 20-25% upside.

Meta Platforms (META)

Outlook: Similar to Microsoft, Meta's current trading level is considered a great opportunity.
Price Target: Trading around $645, with an average analyst target of $805 and the firm's target at $825.
Past Concerns: The company faced a penalty call due to a $15.5 billion tax bill.
Key Strengths:
- AI Integration: Strong AI-driven engagement in ads, infrastructure, and consumer platforms.
- WhatsApp Monetization: WhatsApp is considered a "hidden gem" that has only just begun to be monetized.

Walmart (WMT)

Rationale: Despite trading at all-time highs, it's a top pick due to its effective use of AI.
Price Target: Trading at $113, with a 12-month price target of $131, offering an $18 return.
Recommendation: Get a position here and add to it on dips around $105 and $100.
AI Enablement: Walmart operates the largest AI-enabled physical and digital commerce network globally, which is expected to significantly benefit its bottom line.