Profit preview, top picks in the domestic technology sector from Scotiabank analyst

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

Scotiabank analyst Kevin Krishnaratne previewed earnings reports in Canadian technology and presented top picks,

“With Canadian Tech earnings within our coverage starting this week, we outline our expectations in this note. We continue to like both KXS and DSGX as Enterprise Software companies best positioned to benefit from heightened geopolitical and tariff uncertainties that should drive strong demand for Logistics and Supply Chain Management solutions. We also are positive on both VHI and WELL given their resilient Health Tech exposure across a broader uncertain backdrop. While we remain SP-rated on SHOP, largely due to valuation (approximately 25 times calendar 2026 EV/GP [enterprise value to gross profit] 2 ties peers), recent U.S. e-commerce strength and its increasing exposure to International and Enterprise markets are likely to drive a beat in GMV that should deliver upside to outlook on revenue growth (mid-20 per cent). However, we are below consensus on GP growth (for Q2, but moreso Q3) due to assumptions on softer subscription revenue due to three-month trial dynamics. Still, shares could continue to move higher depending on how tariff/trade discussions progress and the resulting impact on consumer sentiment. We moved our targets up on both SHOP ($115, prior $90) and LSPD ($12, prior $10) with Fintech peers having largely rebounded off initial Liberation Day selloffs”

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Citi chief U.S. equity strategist Scott Chronert’s top 20 list of top picks saw some changes,

“We add The Charles Schwab Corporation (SCHW), Applied Materials (AMAT), and Northrop Grumman (NOC). These additions replace LPL Financial Holdings Inc (LPLA) and Marvell Technology Inc (MRVL)”.

The stocks are Alphabet, Royal Caribbean Cruises, Amazon.com, Draftkings Inc., Walmart Inc., Schlumberger NV, Huntington Bancshares, The Charles Schwab Corporation, Intuitive Surgical, Vertex Pharmaceuticals Inc., Delta Airlines Inc., Honeywell International, Quanta Services Inc., Rockwell Automation, Northrop Grumman, Applied Materials, Snowflake, Micron Technology Inc., CRH PLC, Prologis Inc., and Southern Company.

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Evercore ISI strategist Julian Emanuel sees “moments of truth” for markets this week,

“The history of Structural Bull Market Recoveries like the current, up 32 per cent from the 4/7 low, points higher. As does the history of FOMO, like 1999 and 2021 – last week The Question, ‘Is It Different This Time?’ turned into full on Meme-stock mania … A market trading at nearly 25 times and where complacency is reflected by plunging Index volatility faces a barrage of Events in the week ahead. Bessent meeting with Chinese counterparts. The FOMC’s decision. Earnings reports. And of course, to kick off August, the Jobs report and the Tariff Deadlines (EU, Canada, Mexico, India and South Korea). All as Valuation and Trade Tensions become the top concerns for Investors”

Mr. Emanuel recommends an AI-centric portfolio tilting towards stocks with attractive valuations and strong sentiment.

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BofA Securities analyst Alec Stranahan believes Ai will increasingly penetrate the health care sector,

“Though the goal of optimal patient care may be common across stakeholders, inefficiencies exist for all members of this system, especially considering the high degree of manual input necessary today from patient forms to EHRs to insurance claims … The adoption of AI in hospital systems today remains confined to individual use cases/pilots given the difficulty in changing the well-established traditions of patient care. That said, we have seen increased uptake of these AI tools, particularly in larger hospital systems, as the benefits to time, cost, and outcomes become more well-documented. Indeed, established players such as Cigna and UNH are increasingly paying attention to the emerging use of AI, with Cigna recently backing AI startup Automize AI in a Series A funding round as just one example … Several companies are already involved in the use of AI across the healthcare ecosystem. Doximity (DOCS) is a leading networking platform which has developed a HIPAA-compliant AI assistant for clinicians to aid in drafting medical letters/appeals and facilitating patient communication. Waystar (WAY) is leveraging AI to streamline tasks like prior authorizations, payment processing, and denial appeals. HCA Healthcare (HCA) is among the first healthcare services companies to adopt AI for workforce allocation and managing accounts receivables. Astrana Health (ASTH) partners with providers to integrate AI for checking member eligibility, prior authorizations, and risk stratification”

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Bluesky post of the day:

Diversion: “A Pill That Makes Your Blood Deadly to Mosquitoes? It’s Real – And It Works” - SciTechDaily