Big changes to the ‘Best of BMO’ list of top analyst stock picks

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Analysts change their top stock picks

I finally got access to BMO’s quarterly “Best of BMO” report describing top analyst stock picks.

I will list the stocks, and, in the event it represents a change, I’ll put the old pick in brackets.

The stocks are Enerflex, Expand Energy Corporation, Headwater Exploration, Peyto Exploration & Development, Alamos Gold, Cameco, Constellium, Corteva Agriscience (formerly Mosaic Co.) , DuPont, Endeavour Mining, First Quantum Minerals (Newmont), G Mining Ventures Corp., Rio Tinto, Taseko Mines (Atex Resources) , Weyerhaeuser {Trex Co.), Air Canada, Canadian Pacific Kansas City Ltd., Clean Harbors, JBS N.V., Linamar, Performance Food Group (Walmart), Primo Brands Corporation, Starbucks, Thor Industries (Camping World Holdings), Disc Medicine Gilead Sciences, Korro Bio Inc. (Legend Biotech), CIBC (National Bank), Cincinnati Financial Corporation, goeasy (TMX Group), Manulife Financial (Fairfax), TransUnion (AMN Healthcare Services), Chartwell Retirement Residences, Colliers (Jamieson Wellness), Digital Realty Trust, Killam Apartment REIT, SL Green Realty, Welltower, Alphabet Inc. (Uber Technologies), Amazon.com Inc., Constellation Software, DraftKings, Intuit Inc., Palo Alto Networks, Rogers Comm. (Thomson Reuters), Take-Two Interactive Software, GE Vernova (First Solar Inc.), Keyera (Transalta) and Sempra (Entergy Corporation).

Facts About Nuclear Power

BofA Securities thematic investing strategist Felix Tran released a near-50 page report on nuclear power,

“Did you know that a glass of water can create enough nuclear fusion fuel for a person’s energy needs over their entire lifetime? And an egg-sized amount of uranium fuel can do the same? Nuclear energy holds the answer to the world’s power shortages, opening up a potential more than $10-trillion market. Exponential growth in tech and the AI revolution require ever more resources that we can’t provide at the necessary scale today. By 2030, the volume of electricity flowing through global grids could rise by 30 per cent … Data centres alone could use more energy than Japan by 2026 and India by 2030 … SMRs [small modular reactors] are an interim nuclear fission energy solution and could be a $1-trillion potential market by 2050, according to our US Cleantech team … Today, the US operates the world’s largest nuclear plant fleet, but China could surpass it as early as 2030 … Investment requirements in nuclear fission technology are already slated to reach as much as $3tn over 2025-50 (BNEF), or up to $4-trillion adding the SMR market potential. The TAM across the entire nuclear ecosystem including fusion could be >$10tn”

Oklo Inc. is BofA’s top pick in the SMR sector.

AI Spending Boom Might be Leveling Off

Morgan Stanley Wealth Management chief investment officer Lisa Shalett is worried about AI-related investment,

“The data center capex boom that began in earnest following the 2022 bear market has seen annual “hyperscaler” capex surge from about $100 billion to over $400 billion. As contextualized by Apollo Global Management, this is outsized compared to virtually anything seen in the internet bubble. From 1996 to 2000, U.S. telecom companies’ capex grew from 0.1 per cent of GDP to 0.7 per cent. Since 2021, U.S. hyperscaler capex has grown from 0.55 per cent of GDP to 1.3 per cent. Similarly, Strategas has noted that spending linked to power generation and data centers recently rose from 30 per cent of nonresidential construction to 44 per cent. This comes as Census Bureau survey data indicates that AI usage and adoption are plateauing across every enterprise size, having apparently peaked at around 14 per cent of the largest companies in June before falling to about 11 per cent in August. This confirms MIT Media Lab and Project NANDA research from August suggesting that 95 per cent of AI pilots used at companies have so far produced no measurable return or productivity improvement”

Bluesky post of the day

Diversion

“Goodbye Colonoscopy? New Poop Test Detects 90% of Colorectal Cancers” – SciTechDaily