AI Ambitions And Trade Frictions, What's Next For Canadian Stocks?
Seeking Alpha
February 13, 2026
AI-Generated Deep Dive Summary
Canadian stocks have outperformed their U.S. counterparts over the past year, but questions loom about whether this trend will persist amid shifting investor sentiment regarding artificial intelligence (AI) advancements and ongoing trade tensions between Canada and the United States. Michael O’Brien of TD Asset Management weighs in on these developments, offering insights into how Canadian markets might navigate these challenges.
One key factor behind Canada’s relative resilience has been its smaller tech sector exposure compared to the U.S., which makes it less susceptible to immediate disruptions from AI-related shifts. While this dynamic has shielded Canadian stocks so far, the long-term implications of AI on various industries remain a critical consideration for investors. Additionally, trade relations between Canada and the U.S. continue to be a significant wildcard, as both countries are deeply interconnected through trade but face ongoing political and economic uncertainties.
Looking ahead, O’Brien suggests that the Toronto Stock Exchange (TSX) could maintain its outperformance against the S&P 500 through 2026, driven by factors such as Canada’s strong resource-based economy and its strategic position in global supply chains. However, the potential for trade frictions to escalate or de-escalate will play a pivotal role in shaping market outcomes.
For investors, understanding these dynamics is crucial. The interplay between AI-driven economic shifts and geopolitical trade relations underscores the importance of a diversified investment strategy. While Canadian stocks may offer stability in certain sectors, they also present unique opportunities and risks that demand careful consideration. As global markets continue to evolve, staying attuned to these factors will be essential for navigating the financial landscape effectively.
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Originally published on Seeking Alpha on 2/13/2026