Don’t miss this timely episode! Tech stocks have been crushed, but Ivana Delevska believes the worst of the AI sell-off may be behind us. With some AI stocks down 30%, 40% or even 50% from their highs, is this the buying opportunity investors have been waiting for? And could the highly anticipated Anthropic IPO reignite the AI trade? On this episode of In the Money with Amber Kanwar, Ivana Delevska, Founder and Chief Investment Officer of Spear Invest, explains why rising interest rates and forced selling have hammered AI stocks, even as the underlying fundamentals remain strong.
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FROM AMBER’S DESK
Good news and bad news morning. Bad news is that I got bumped from the interview with Finance Minister Francois-Philippe Champagne. Good news for you is that you get the Monday note and our usual family-life fodder. I am proud to say we survived the post-Halloween sugar crash. In a cruel trick to parents, Halloween coincided with the time change – adding an extra hour to the longest day of our lives. I don’t know who made that decision but I’d like to speak with the manager.
Here are five things to know today
1.
Stocks indicated higher after brutal month
The first trading day of November comes with renewed hope that October’s tumult is in the rearview mirror. The Nasdaq plunged Friday extending its rout to nearly 8% from its record high and its worst monthly loss since March 2025. The TSX managed to eke out a small gain for the month of October while the equal-weight S&P 500 was up 4%. October wasn’t so much of a correction as a rotation away from tech and into everything else. This is perfectly explained by earnings. Earnings by the Magnificent Seven tech companies are growing slower than expected – and here is the important part – are growing less than the rest of the S&P 500. The Mag7’s blended earnings growth has declined to 22.6% according to FactSet while earnings for the rest of the market have increased to 32.6%.
So is the worst behind us? Ivana Delevska has a list of names to pick up amidst the sell-off. It should also be noted this is the third pull back of 8% or more for the Nasdaq this year alone. “This strikes us as more of a garden variety correction,” wrote Ajay Rajadhyaksha of Barclays this morning, “We think a mild relief rally is now the most likely near-term outcome.” US mid-term elections this week create some volatility especially because the Trump administration has been so gung-ho about AI development.
Against this backdrop, Apple and Palantir report results today after the bell. Tomorrow morning Shopify reports. Earnings kick into high gear on the TSX this week with 99 companies reporting including Thomson Reuters, Manulife & Sun Life, Suncor, Cenovus, Canadian Natural Resources, BCE and Telus just to name a few.
2.
Canada-US trade deal “very close”
US President Donald Trump offered investors a “treat” post-Halloween telling reporters a trade deal between the two countries was “very close.” The sentiment was echoed by Prime Minister Mark Carney in a post on X saying he had a “good conversation” with President Trump. Carney said any deal would “fully respect Canada’s languages, culture, and sovereignty.” And a deal would be worked on in the “coming weeks.” This is the most positive tone we’ve seen regarding the trade talks since Canada walked away in August.
“Trump is obviously motivated by his vote tomorrow. Trump likely wants his signature on a new trade deal which means if it’s a fairly comprehensive CUSMA 2.0 deal, then get it through Congress before the Democrats control at least one of the chambers come January,” wrote Scotia’s Derek Holt, “Canada holds leverage over US politics in that sense.” Although Carney would likely also want a deal ahead of six by-elections just called over the weekend which are to be held December 7th.
3.
Glass Lewis pans H&R REIT deal
The deal to break up H&R REIT looks increasingly tenuous with Glass Lewis coming out against it following ISS last week. “The preponderance of available considerations suggests the GO transaction should be seen as a firm non-starter for unaffiliated H&R investors,” according to the report. The deal to break up H&R REIT was announced in August with the industrial assets going to a group led by Blackstone, the residential assets going to GO Residential, and the remainder going to the Chairman’s family. The last two points rubbed investors the wrong way with GO Residential selling off after the deal. Frequent guest Cole Smead wrote a few days ago he was voting against the deal – something he told us he would do shortly after the deal was announced. Glass Lewis said GO shareholders should vote AGAINST the deal because it was a flawed sale process, the price has eroded, the insider deal looks lopsided, and the strategic logic is weak.
The vote on the deal is November 13 and looks set to fail. A win for the activist investor Sandpiper with the support of activist dream team Wes Hall and Walied Soliman. Whether it will be a win for long suffering H&R REIT shareholders remains to be seen.
4.
Marvell buys Lumentum in $115 billion mega-deal
The semiconductor company is buying the data centre optics maker in what is one of the biggest tech deals in history. It’s an all-stock deal so shares of Marvell are down 3% in the pre-market and Lumentum is also lower because word of the deal got out last week. It is a quick win for Ivana Delevska who had the name as one of her Pro Picks. Click here to see which other names she liked in the space which could benefit from a valuation lift after the deal. It is also a nice win for Nvidia which invested $2 billion in Lumentum back in March. While the market is nervous about the AI trade, Marvell is putting all its chips in.
5.
Check Point Software -6% after sales miss
The cybersecurity software provider saw revenue fall 1% thanks to a continued slide in its legacy commercial firewall business. Growth in software subscriptions has not been enough to offset those declines. The company is in the midst of a turnaround with a new CEO who said, “We believe revenues reached a trough in the third quarter.” However, he acknowledged the recovery is “taking longer than anticipated.” The stock has been a laggard down 18% so far this year compared to the cybersecurity ETF which is up 41%.
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