The Open for Friday, Feb. 6, 2026

Key Concepts

• AI Investment Shift: A move from focusing on AI infrastructure (chips, data centers) to recognizing the potential in software applications that integrate and extend AI capabilities.
• Canadian Economic Landscape: A mixed picture with job losses, a strong Canadian dollar, and varying performance across sectors (Stellantis restructuring, Canopy Growth gains, OpenText stagnation).
• Global Demographic Trends: The growing aging population presents investment opportunities in sectors catering to seniors.
• Commodity Value Investing: A focus on potash and iron ore producers based on a value investing approach, anticipating price increases.
• Emerging Market Challenges: Thailand’s economic stagnation is attributed to structural issues like political instability and wealth inequality.

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Market Reaction to Economic Data & Corporate Earnings (Part 1)

The broadcast began with a review of market reactions to recent economic data and corporate earnings. Canada experienced an unexpected loss of 25,000 jobs in January (Statistics Canada), despite expectations of a 5,000 job gain, with the manufacturing sector particularly affected by US tariffs. The unemployment rate fell to 6.5%, but this was largely due to a decrease in labor force participation. Earl Davis (BMO Global Asset Management) noted this jobs report slightly increased the chance of a Bank of Canada rate ease, though the split between full-time gains (45,000) and part-time losses (approximately 70,000), alongside wage inflation of 3.3% (vs. 3.7%), provided offsetting factors. The Bank of Canada remains on hold, maintaining flexibility.

US futures initially pointed to a stronger open, but the US market was down about 2% for the week. The TSX had slipped from record highs but remained up over 26% in the past year (including dividends). Oil prices were supported by stalled US-Iran talks, while gold rallied slightly but remained below $2,000/oz. The Canadian dollar was strong, trading above $0.73 USD. Bitcoin experienced volatility, briefly threatening to fall below $60,000 before recovering.

Several corporate earnings reports were highlighted: Stellantis announced a $25 billion write-down related to its EV strategy shift and is selling its stake in an Ontario battery plant to LG Energy Solution, continuing to source batteries from the facility. Canopy Growth reported net revenue and profit exceeding estimates, driving a roughly 3% share increase. OpenText’s revenue was nearly flat year-over-year, with analysts at Citi maintaining a neutral rating due to potential disruption from AI tools. Molina Healthcare’s stock plummeted after a profit miss and a significantly lower-than-expected 2026 profit forecast. Amazon’s announcement of a $200 billion capital expenditure (Capex) plan, largely focused on AI, led to a stock decline as analysts questioned the return on investment. Strategy, a Bitcoin treasury company, saw its shares move higher, with TD Securities viewing its volatility as a feature, estimating Bitcoin would need to fall to $23,000 for significant financial issues.

The Emerging AI Software Opportunity (Part 2)

A key theme emerging was the potential for investment in the software sector, specifically related to Artificial Intelligence. Kevin Burkett (Burkett Asset Management) argued that investors are overly focused on the physical infrastructure of AI (chips, AWS, data centers – exemplified by Amazon’s $200 billion Capex and similar investments from Meta and Google totaling $125-$165 billion) and are missing the significant opportunity in software applications that will extend AI capabilities. He outlined a three-phase AI development: Phase 1 (physical infrastructure), Phase 2 (software applications), and Phase 3 (business-specific AI use cases), believing Phase 2 is currently undervalued.

Specific Canadian companies were discussed in this context. Constellation Software was identified as a strong buy, benefiting from its aggregation model and ability to integrate AI. Opentext and CGI were mentioned as facing AI-related headwinds, while Pollard Banknote was presented as a value play, less directly impacted by AI hype.

Global Economic Trends & Investment Themes (Part 2)

Beyond AI, the segment explored broader economic trends. Thailand’s economic stagnation was detailed, attributed to political instability, the highest income inequality in the Asia-Pacific region, and a lack of innovation, with its reliance on tourism and exports making it vulnerable. The HBO series "The White Lotus" was referenced to highlight the contrast between Thailand’s image and its underlying economic issues.

The segment also introduced the “grey wave” – the aging global population – as a significant investment theme. With 1 in 6 people projected to be 60+ within 5 years, and 22% of the population 60+ by 2050, opportunities exist in sectors catering to seniors (senior living, home modification).

Commodity "Hot Picks" & Value Investing (Part 2)

Taylor McKenna (Kopernik Global Investors) presented commodity “hot picks” based on a value investing approach. He recommended K+S (German potash producer with Canadian assets), Nutrien (Canadian potash leader), BHP (diversified miner with potash exposure), and Vale & Glencore (iron ore producers). The investment thesis centers on potash prices currently around $350/tonne, anticipating increases above the incentive price of >$500/tonne, driven by demand and limited new supply.

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Conclusion

The broadcast highlighted a shifting investment landscape. While initial market anxieties centered on the capital expenditure required for AI infrastructure, a compelling argument was made for focusing on the software companies poised to benefit from the integration of AI into business applications. This was coupled with a broader exploration of global economic trends, including the challenges facing Thailand and the opportunities presented by an aging global population, and a value-based approach to commodity investing. The key takeaway is the need to look beyond the initial hype surrounding AI and identify companies positioned to capitalize on its broader adoption and integration across various sectors.