The Canadian Investor - 12 ETFs to Consider as Market Volatility Surges

Episode Date: March 26, 2026

Markets remain highly volatile as the Iran conflict drives one of the largest oil supply disruptions in decades. We break down what’s happening in energy markets, why this shock could last longer than expected, and how it may impact global growth, inflation, and investor portfolios. We then shift to actionable ideas, discussing ETFs and sectors that could help navigate this environment, including energy, utilities, consumer staples, and defense. We also explain why Canadian oil producers like Canadian Natural Resources, Suncor, and Cenovus may be particularly well positioned given the current backdrop. Finally, we debate Wealthsimple’s new prediction markets feature and whether it crosses the line from investing into gambling. Is this just the evolution of retail investing—or a step too far? Tickers discussed:CNQ.TO, SU.TO, CVE.TO, IMO.TO, ZEO.TO, XEG.TO, VDE, XLE, ZUT.TO, XUT.TO, VPU, XST.TO, STPL.TO, ZXLP.TO, XAD.TO, SHLD.TO   Subscribe to our Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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Welcome back to the Canadian Investor Podcast. I'm Simo Beran. I'm back with Dan Kent. We're back for some news and earnings. And of course, it's slowing down on the earnings front. But thankfully, there's still a whole lot happening in the market, especially because of what we're seeing in the Middle East, the disruptions around that. It's really, it really feels even more so now that it's a headline-driven market, right? Like the market's being affected by whatever it's perceiving as being good with the potential resolution of the conflict in Iran or not. You're just seeing some massive swings. It's almost like the stock market is really dependent on the perception of what's happening with Iran and the energy and oil disruptions. Well, I think so for sure because there's so many, I guess, short to midterm impacts from that.

Like inflation obviously is one big issue. Interest rates, price of oil. Yeah, it's earning season is wrapped up, but the market is still bouncing. Like, what is it? It's got to be one to two percent. in either direction based on, you know, whatever headline comes out that to morning. It's crazy. Yeah, exactly. And it's been affecting like all different kind of assets, whether it's, well, the one that's been relatively stable, although it did go down quite a bit since the start

of the year has been Bitcoin. Surprisingly, it's been like way less volatile than even gold. The U.S. Treasuries, the 10 year has been going up really rapidly. The last time I check it was up 40 basis point in the last month, which is absolutely massive. When, When you're talking about 10-year bonds, it's getting to the level not far from where it was at last year for Liberation Day. So you're seeing a whole lot of volatility. Of course, stocks are moving quite a bit. Some sectors are doing better. The defensive sectors are a bit more stable.

And we'll be talking about some ways to just kind of play a bit more that stability aspect in the Monday episodes. I'll be giving some ideas in terms of ETF, some of the sectors. industries to look at if you're looking to have a bit less of volatility in your portfolio, so make sure you tune in on Monday. But like we said, the S&P 500 is definitely down for the year. I think it's down around 3%. The NASDAQ is down around 4%. The TSX is hovering around flat for the year.

And again, the Warren around, like we said, is just really creating some disruption in the market and a lot of uncertainty. and I think it's just a reminder here for listeners. And I've said the time and time again, like make sure you just understand how you're feeling regarding your investments. Because emotions, unfortunately, will play a big role for a lot of people.

They'll sometimes just panic, make some quick moves because they're just feeling the emotion and they think that's the best way to handle it. So just keep a gauge on how you're feeling. But also, if you're really feeling nervous with what's happening, nervous about your portfolio, maybe it is a time to think about making sure you're well diversified. Because if you're well diversified and you're not too heavy in one specific sector, one type of investment, one type of asset,

then oftentimes your portfolio will be quite resilient versus just being a whole lot in tech, for example. Because even the Mag 7, I mean, I think all the names are down right now between around like 3% and 19%. at least that's what it was when I did my notes yesterday. So you're talking about some of the best performers over the last a few years, all the largest companies and some are close to 20% down on the year. Yeah, a lot of them are in correction territory for the most part, like 10 plus percent down. I know the TSX was almost entered that territory. Like it's flat on the year, but I know at one point it was up quite a bit.

It got close to being 10% down from the peaks on this year. But yeah, I mean, energy heavy investors have definitely enjoyed it. But I mean, ultimately, it's kind of weird because, you know, ultimately 100 plus dollar oil is good for these energy companies. But I think for the broader market and the broader economy in general, it's not good. So unless you're really, really heavy on energy, like I think it's kind of a net detriment to your portfolio overall. But yeah, it's these conflicts never really. last as long as a lot of people feel while we're in the midst of them. But I mean, as we talked about it was on a previous episode, we did talk about like conflicts that that impact

the price of oil kind of tend to drag on a bit longer in terms of market recovery. But I mean, ultimately we're eventually going to come out come out of this. Yeah, exactly. And just before we wrap up this here and we'll get into more like some recent news that have been happening. And of course, we do have some earnings to talk about. I'm sharing here for joint TCI, so sector speed ER goes over and they have a lot of ETFs that track the SMP 500, the different sectors here. For example, XLE, which would be the energy one, you might have heard quite a bit recently. So you have all the major sectors represented in the SMP 500.

And there's about half that are up and about half that are down so far. Surprisingly, real estate is flat for the year. But then you get into information technology, communication services, all that is down at least 5% with financials doing the worst in the U.S. at 10%. I think in Canada, financials are around break-even so far for this year. They are down from the peak. But if you look at year-to-date, it's about break-even for the big banks in general. But then you have sectors that are doing quite well.

So consumer staple, utilities, industrials, materials, they're all up between 4% and 7%. year today. And then of course, energy for obvious reason, that's up 36%. But just want to illustrate that, you know, some of you may be listening and may be looking at returns year to date that are negative double digits. I assume that you probably have a decent amount of exposure to technology, for example, because it's been a rough go so far for this year. And of course, things could definitely turn around. At the end of the year, it may be the complete reversal to this. But just a reminder that if you're well diversified, you're probably weathering this better than someone who's overly concentrated. Yeah, I remember when there was kind of talks of a resolution.

I believe it was last week, or maybe it was even Monday. But I mean, the biggest gainer that day in my portfolio was Eritzia. It was up like 8 or 9%. So just goes to show you like completely unpredictable right now. Tough market. No, exactly. Yeah. There is an old saying in investing.

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conservative investor or more aggressive, BMO has an all-in-one solution for you. And now, it's even more cost-effective. BMO has cut management fees to just 0.15% on select asset allocation ETFs, helping you keep more of what you earn. Simplify your investing today at BMOetifs.com. So we'll get some of the bad news out of the way, I guess. So more issues with private credit. I mean, it's like watching a slow motion train wreck at this point. I gave private credit the benefit of the doubt that, you know, there might be some really good ones out there that are just being thrown out with the bathwater. I still think it's probably true to some extent,

but it seems like we can't go a single day without seeing some bad news, some headlines, about something else private credit that's not doing well. So Moody's, the rating agency, downgraded one of KKRs, funds to junk rating. So the fund in question is FS KKR Capital Corp. KKR is a global investment firm and one of the largest private equity players. So it is something to take note here. And since we last talked about private credit a few weeks ago, there just have been more and more examples of funds that have to gate or limit redemption from investors. Usually it's capped at around 5% per quarter. That's kind of the general rule here. And what funds are,

for the most part I've been doing is they've been honoring up to that 5% but not beyond that. However, B-Cred, Blackstone largest private credit fund. If people remember, this is the fund where Blackstone executives actually chipped in to make sure that the redemptions were able to be fully fulfilled beyond that 5%. So that one reported a 0.4% loss in February. Now people may say, you know what? Okay, so why are you talking about a 0.4% loss? That's nothing.

That's true, but keep in mind that private credit and private equity are notorious for marketing themselves as being less volatile and steady as she goes and just never taking some big drops. And this was the first loss for this fund since September of 2022, where I think it was down around 2% for September of 2022. And you might think, okay, so it's not the first time. but let's think back of September 2020. There was a lot of stress in the credit markets because the Fed and obviously central banks around the world were starting to really hike aggressively after the upouts of inflation that we saw in 2021 and 2022.

And if we remember, not that long after that, it was in March of 2023 that we saw the run on the bank for Silicon Valley Bank. So clearly it was a different environment and there was definitely some stress and the credit markets at that point, and they saw a negative return back in September of 2022. And think of the beginning of the pandemic when everything crashed. Private equity and private credit was, I remember seeing some stuff saying like they were like bragging like,

well, you know, the market's down 30% but look at us. Like our portfolio is intact. It's like, okay. Yeah, but it just and people might not fully understand or like understand what I'm saying, but let's just think of it. Like, let's see you own a house and you think it's worth one million dollar because the last time a house in your neighborhood got sold that was similar to your house, it sold for a million dollar.

But you're also seeing the broad market since then crashed 20%. So is your house really worth one million dollar? Sure, you can make that argument that maybe if you wait long enough, you'll get the one familiar you think it's word, but if you need the cash relatively quickly, and the market is essentially telling you that it's probably worth closer to $800,000. And I think that's really the disconnect when you have a private versus a public market is public market, you know what it's worth right now. And the private market, it just makes these kind of assumption.

It had models. I like to think that they do their best, but sometimes it's just kind of hard to really. believe, I mean, especially when you go back to the pandemic, right? Like, can you, how can you really say that your investments didn't budge if you tried to sell them? Clearly, you would not be getting 100% on the dollar. Yeah. I mean, if you, just like you said, if you take your home and kind of compare it to the last sale price, whereas if your home was like a publicly traded home, I guess you could say, it would probably be marked the market. And it would be worth the 800,000. You'd know what it's worth. But yeah, I mean, this entire situation, like, I don't pay attention

as much to it as you do, but I mean, all this stuff happening in an asset that you just cannot get out of very easily is just a disaster. Like, imagine the activity, if this was like a publicly traded equity that was going through these types of troubles, I mean, it'd be, it'd be crazy, the amount of, like, downside. It would just be getting dumped. And now they kind of, yeah, they just limit redemptions. And like, this is nothing.

These funds have gone wrong. Like when you sign up for this, this is what you sign up for. It's just. Yeah. Well, I think that's the problem of marketing these funds to kind of more retail investors versus institutional, right? You institutional, they have very long time horizons. Oftentimes they have decades. They don't need the liquidity.

But then when you have retail investors, it's, that's the issue is they're much easier to to sway and decide to head for the exit than an institutional. manager. So something to keep in mind, but I won't stay too long on the private credit front because we do have some other things to talk about. Let's talk about Dollarama. Company that I think is probably a safe bet to keep doing well. It's not a cheap company to say in terms of valuation, but it's hard to not see them doing well, at least on the business point, maybe not as an investment, but on the business side of it. Yeah, so they reported a pretty good quarter, but the market kind of punished it due to some weak guidance. So the company did end up beating on top and bottom line estimates,

but same store sales missed the mark by a pretty small amount. And I mean, when you have the run up that that dollarama has, I think just kind of missing on anything will cause it to sell off. I mean, I don't know what this one was trading at. I haven't looked recently, but like I would have,

if I were to guess like 40x earnings, maybe anywhere from 30 to 40. So it's kind of like a defensive retailer that's growing. Oh yeah, there you go, 35x and that's after the drawdown, I would imagine. Yeah. So yeah. So you're probably looking at, it was trading at over 40x earnings.

So any tiny miss in expectations, no doubt it's going to fall, especially because there's a company that really doesn't grow all that fast compared to that valuation. So if it doesn't have a good quarter, like a sell-off is expected, I think it fell like maybe 9% yesterday. So on a quarter over quarter basis, revenue increased 11.7% earnings by 2.1% earnings by 2.1% percent and EBITA by 6.2%. And even a margins dipped by 170 basis points, so 1.7%. And it looks like the majority of this was on the Australian segment, like that reject shop

that they bought. Yeah. I know they're kind of revamping a lot of stores here in an effort to kind of install the, you know, the dollarama model there. So no doubt like short term pressure on margins. I don't really think the market cared all that much on that front for this. It was, it was kind of expected. Full year looks solid.

Revenue earnings and EBDA grew anywhere from 13 to 14% each. And again, the same store sales only came in at 1.5% and the market was expecting 2.6. So it's actually a decent size miss on that. And when you do adjust for the fact that Dollarama's quarter was, it was shorter. So same store sales would have come in at 3.5% had the quarter not been shorter. I would imagine that was factored into the market's 2.6% expectation. I don't know, but I would say it is. I don't think we see the stock down 8% if that wasn't factored in.

But yeah, transactions fell 1.6%. Average basket increased by 3.1%. And management mentioned that it was bad weather in December and January that kind of hit foot traffic, which is why transactions fell and basket size increased. They say this is kind of... They sound like the Canadian real estate industry. It's bad weather that sales are down. Every winter somehow it's bad weather.

Well, they say it's recovered. They say now it's back to normal. So I mean, bad weather. It's kind of weird to me. I don't know if you need something from the store. You're in Canada. Like, you should not be using that excuse. I'm sorry.

But like, yeah. I mean, I just, that kind of excuse to me, like, I just have no patience for that kind of excuse. I'm sorry. Like one thing for like traveling if you're actually like an airline. or something and there is actually shut downs and airports that are not operating that I can buy, but yeah, not a fan of that excuse. Yeah, I mean, if you need an essential from dollarama, you're not going like, oh, the weather's bad today.

I'll just wait till February. No, exactly. That's it. It's just, I don't know. To me, it's, yeah. They say it's recovered. So if it gets back the normal next quarter, obviously this was a reason. But if it continues the lag, yeah, the management, or sorry, the weather story.

I guess spring is around. Yes, that's correct. That's recovered. Yeah. But so the company rolled out 75 new stores, which is most it's ever opened in a year. Dollar City, which is in Latin America. So that's doing well, 47% growth in earnings, dollar ramas portion of earnings because they don't own this outright.

I can't remember what percentage they own. It's a majority by own controlling. I think it's like 51. Yeah. Yeah. They might have even increased it. Not 100% sure, but sales growth, 20.2%. in that area on the year.

Mexico posted a $11.7 million loss and they expect another 10 to 20 million next year. I think this is just a pilot project for them. Like they're rolling out them. They're rolling stores out in Mexico as kind of a pilot. So yeah, there's going to be losses there for a while. Australia, as I mentioned,

that's kind of a project there as well. And in terms of guidance, this potentially could be where it's sold off as well. So they mentioned same store sales guidance in Canada of 3% to 4% for next year. So the market expectations, were 3.9% and capital expenditures is also going to increase dramatically. I think it might be even close to doubling on the year because of a few new distribution hubs are being few new distribution hubs that are being built.

I think one of them is in Calgary actually. It kind of looks like the market is punishing the company for kind of small misses. The spending and, you know, profitability and other segments will come eventually. Like the company has proven for pretty much two decades that it can, you know, kind of implement the dollar ramma model and expand it. So not really worried on this one. Like it did get a little bit expensive. This kind of reminds me similar situation to Costco,

where it's not really necessarily anything that business has done wrong. It's just like eventually when you're trading at 45x earnings and you're only growing at, you know, a 10% pace, you better put up good quarters or yeah, you're going to see a sell off. But it seems like a decent quarter. It just got a bit pricey. Yeah, almost feels like maybe the market was expecting the tailwind from the pandemic to continue indefinitely for them.

Yeah. And I mean, it's not even necessarily just a pandemic. It's the fact that like people just can't afford groceries right now. Like, well, the tailwinds and the aftermath. Yeah. Yeah. What I wanted to say is increased cost of living and people looking to, to save wherever they can. And it's, uh, right in their wheelhouse.

Yeah. Like one of the main. bull cases for a company like dollarama, a company like La Blah is 6% food inflation. It's crazy because that that pushes people out of more expensive stores and and into stores like this because they just can't afford it anymore. So I think the long term tailwinds are there. Like I don't think this is like a few years ago,

we kind of figured, you know, once the pandemic subsides and like, you know, this high inflation subsides people like go back to kind of opening their wall. it's up a bit. Like, I don't know if that's going to be the case. I think there's like permanent tailwinds for companies like this. You know, the market's going to price those in. And it did, like 45x earnings. So, but yeah, it's, it's hard to see how these stores don't remain extremely popular. Doesn't mean they're good investments. Again, because, you know, often the market prices is in right away. But yeah, it's tough in the Canadian economy, which is ultimately good

for, for stores like this. Okay. No, that's a good overview. Let's move on to Lula Lemon. Little Lemon, it has been, I'm not going to probably surprise anyone, so it's been struggling for quite some time. I used to own Little Lemon. I do not own it anymore because it just felt like things were not kind of turning around. And things are still not improving, although I guess there's some silver lining. So, but it's probably going to take a few more quarters, which feels like it's been now. I think it's going on two years when they really started getting into issues. And of course, with the CEO departure a few months ago. Now they're looking for a CEO.

Revenue increased 1%, but it keeps struggling in Americas, so it decreased 4% for the Americas. International was up 17%. And China was really impressive, up 22%. So definitely a silver lining here for China, but it's still a smaller part of the business compared to the Americas. However, I will mention that there was a 503rd, week in that quarter last year compared to this year. So there was an additional week of revenue last

year. So they said it would have increased 6% if it wasn't for that. So not too bad. Comparable sales increased 3%, but still decreasing the Americas by 1%. For the full year, Freecastle dropped a whopping 42%. Earnings per share was down 18%. And during the call, they mentioned that they are introducing new fabrics and technology and are looking to refine their lifestyle offerings with fewer logos and a better color palette. They're also looking to get more efficient by significantly reducing the go-to market timeline for new products by at least 50%. And that's been an issue for Lulu Lemon because they originally identified some of the style

that they had in colors that were not resonating with their customers, like pretty much two years ago. So clearly there is a bit of an issue with identifying and bring that to market. And right now, their go-to-market timeline is up to 24 months. So they're trying to reduce that to make it closer to a year to, I think, a 16 months would be the ballpark that they gave there. Obviously, it takes time because you have all the logistics and getting the clothes done, designing them, and all that. So it does take some time. But if they can improve that, probably a good thing. They added Chip Bird to the board. He's a former Levi Strauss CEO, and they said he should be a good voice to help on the board. And based on his experience, and they continued their search for a new CEO,

but they have some great candidates that they're going through right now. For 2026, they expect sales growth to be between 2% and 4% while expecting a low single-digit decline in North America. So not likely to improve for North America, at least for this. here margins are expected to take a hit due to higher expenses and they didn't mention it but I assume it may also be as a result for more discounts even though they are looking to reestablish the kind of premium full price offering that Lou Lemon was known for where it was very hard to ever get Lou Lemon clothes on sale usually it was the we made too much section where there was only a few sizes that they were trying to get rid of or just, you know, the one fluorescent color

that no one wanted that they're trying to discount. But now I've noticed they do have more discount. So that is affecting the margins, unfortunately, for them. So we'll have to see. But again, it's going to be interesting when we're thinking about what's happening with the supply disruption for energy, especially these consumer companies, that, that are relying on pretty juicy margins. Like Lou Lemon still has nice margins. Like you do wonder the ripple effect of higher gasoline prices, higher shipping costs,

consumers having less to spend on things like premium clothing because they have to spend more on actually gas, on filling their car. Like you do wonder what this will happen in terms of what effect it will have as a ripple effect. effect, especially for those consumer discretionary companies. Well, yeah, that's what I was saying at the start of the podcast, like my number one stock on the day that there was a potential resolution was Eritzia.

Like, it went up. Yeah. I think it was eight or nine percent. It kind of seems like there's always an expiry date on these companies. And like, I'm saying that owning Eritzia. Yeah. I think eventually there will be an expiry date for Eritzia as well. Like obviously these companies like Lulu Lemon, Nike, went on.

for a very long time. Like, it can be decades, but it just kind of seems like eventually they run out of steam. Like, I don't know if there's ever been like a fashion company that's, that's kind of stood the test of time throughout and not. Well, Nike was a poster child for that, but even then. I mean, I think it's probably a Nike at the end of the day to have stood the test of time for so long, but I mean, I guess Nike you can't go on forever. Yeah, just can't like Nike.

Nike wiped out 12 plus years worth of returns in a matter of like three years. That's why like, again, I own Eritzia, very bullish on Eritzia right now, but I also know that it is not, you know, you have to be constantly monitoring these companies. I mean, even a small slip up. Like, I know a Lulu Lemma was talking about like the wrong product assortment for years. Yeah. A couple of years. And then again, like, as you had mentioned, like, you end up getting the wrong product assortment.

You paid to make all this product and now you got to move it out like, you know, 40% off flash sales or whatever. That just kills your margins. And then you're, you're paying to store the inventory. It's just a nightmare. So yeah,

these are, they're tough companies to invest in. I own a Ritia and I keep a keen, keen eye on absolutely anything that's going on with that one. Yeah. No, I mean, it's fashion is hard.

I'll just say that. There is a, An old saying in investing, it's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands

of dollars saved up to make a move. You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to avoid fees.

to invest, head over to Questray.com, open and fund your account with code TCI and receive $50. Conditions apply. My wife and I are planning a big spring trip to Vancouver. It'll actually be my first time visiting the West Coast. We're looking for a place on Airbnb close to the water so we can wake up to those ocean and mountain views every morning. We can already picture ourselves walking the seawall, exploring Vancouver's neighborhoods, and then make a lot of the water. And then making our way toward the Rockies for a couple of unforgettable hikes. Finding the perfect home base on Airbnb will make the trip perfect. It also got us thinking about our own place while we're away. If another family's home can be the backdrop for our first West Coast adventure, maybe ours could

be that for someone else. Hosting our home on Airbnb would let travelers make their own memories in our beautiful neighborhood, while giving us extra money to put toward all those Vancouver meals and our Rockies excursions. And the nice thing is flexibility. We can decide to host our home only when it works for our schedule. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. Smart investing doesn't have to be complicated or time consuming. With BMO All In One ETFs, you get a complete diversified portfolio wrapped up in a single ticker. It's easy. Whether you're a conservative investor or more aggressive, BMO has an all-in-one solution for you. And now, it's even more cost-effective.

BMO has cut management fees to just 0.15% on select asset allocation ETFs, helping you keep more of what you earn. Simplify your investing today at BMoetFs.com. Let's move on here for the next name on your list. Did you want to do Boyd or should we actually go over Oracle? Because we probably just have time for one of that. I mean, let's go over Oracle. I would imagine that's the one that most people know. Boyd's kind of a lot.

Yeah. So Oracle, you may remember back in September, they saw their backlog. RPAs. Yeah, exactly. Really skyrocket. And they've been definitely under pressure. I'm trying to pull the company here. So they haven't really recovered.

covered, right? The company is still way down. It's actually down probably around like 4, 30, 40% since like before actually had the big jump because of those. What's it called? Do you remember the RPO's? Remainting purchase obligations. Yeah. Yeah, like they, they're down like 50% from the highs there, but they're also down, yeah, like 45% since right before that announcement. Yeah, exactly. Yeah. So they've round trip. and then some. So total revenues, and they reported a few weeks ago, but there was a lot of people looking at their reporting just to see exactly how it was going for the AI infrastructure space. So total revenues were up 22%. Cloud infrastructure revenue was up 84% to just shy of

$5 billion and now represents about 30% of all revenue. Organic revenue grew 30% and on the call, they said the demand continues to outstrip supply as evidence with their RPO's now reaching $553 million. Cloud application deferred revenue was of 14%. Q3 AI capacity gross margin was 32%. Just because they have a weird reporting schedule. So that's why it was Q3 that they just reported. They made a point to say that Oracle has strategically positioned itself as a key player

in the AI landscape and won't be a victim of Saspocalypse. So I think they actually mentioned, if I remember correctly, because I did the notes. We were supposed to talk about it last week, but I'm pretty sure they talked about that specifically on the call. It's embedding over 1,000 AI agent into existing application, our winning customers over competitors like Word Day and SAP. I didn't realize,

but they also have a 15% equity stake in the U.S. TikTok operations that was effective in January. So just kind of interesting, I knew there was a bunch of different companies with a stake, but it just went all over. the place it seemed while a deal was like they were trying to figure out a deal so I couldn't remember who ended up. I think even Kevin O'Leary was trying to get in on it. So there was all these different people and companies that were in, but apparently they had 15%. The EPS was up 24%. They raised

30 billion worth of debt this year through bond issuance as part of a 50 billion debt and equity issuance plan. The add-to-market equity issuance has not yet been issued. So I don't know if the market is already pricing that in. You have to remember, add the market means that there's going to be dilution. The lower the stock is, the worse it's going to be for them because it's going to require them to issue even more stock to equal the same amount of money that they're looking to raise. So just something to keep in mind for those that may be looking at that as a value play, there is some risk there just because, well, just some equity issuance risk and dilution risk. They were asked about 2027 Cappex, but did not elaborate on that. It may sound early, but keep in mind that this was Oracle's Q3, 2026 calls.

So you'd kind of expect them to have some idea of what they're going to spend in 2027. So be aware that when they report Q4 and if they start giving guidance, the market could be surprised in a bad way. Unfortunately, either the market is kind of expecting it or they're going to be surprised in a bad way. I don't think they're going to be surprised in a positive way because we've seen how expensive, how much cap-ex, especially with the big tech, the hyperscalers that have been spending. It's not been going down. It's been going significantly up. So I think that's something just to keep in mind here. Yeah, like I have a feeling they know how much they're going to spend.

They probably just don't, maybe don't want to say it yet. I mean, if you look at a company like Microsoft, I mean, they're down a ton too on, you know, high spending. So and, and they're still like generating a ton of cash flow. Like I'm pretty sure Oracle is just, like literally betting the farm. Like they're dumping everything they have. Everything they have. They're burning money for sure.

Yeah. Like there's no, you know, Microsoft, I mean, I guess a lot of the big tech like the the hypers. I mean, it's kind of a ill spent situation if that, if, you know, doesn't turn out.

Whereas Oracle is like, they've gone from free cash flow positive to, to burning through a ton of cash. I noticed on their, their earnings report, like the first thing they slapped up on the, like kind of the notes of the quarter, the RPO's is the first thing you see.

Yeah. And I kind of went through. A big number. It's good. Yeah. I kind of went through previous quarters like before this whole thing. And they, they never talked about it.

So they slapped that up. to kind of make it look better. But yeah, I don't know. Big risk, I think here with Oracle, with all the spending could work out. I'm not saying it's not going to work out. It could work out. But yeah, a ton of spending. Uncomfortable amount of spending.

Yeah, exactly. And I'm just showing here for joint TSI. Just to give people an idea in terms of the CAPEX spending for Microsoft, you can really see that increase quite a bit over the years, not a surprise to anyone. months, around 20 billion if we go back four or five years ago. And now it's just been doubling, tripling. Yeah. It's around last 12 months. It's 83 billion. I can't remember what they're projecting for 2026 exactly, but it's probably going to be over 100 billion. If I had to guess, I've just. Oh, it's probably well over it. Because I'm pretty sure like Amazon's 200 billion.

Yeah. Google's up there too. Like I would, I would say it would probably be double like 150. Yeah. And Microsoft, just to give a perspective, like Microsoft. in the last 12 months had 160 billion in operating cash flow and 83 billion in CAPEX and capital expenditure. So it's still generated like close to 80 billion in free cash flow. So you have to keep that in mind. Whereas Oracle, it's the other way around is they used to produce cash flow and now they're massively free cash flow negative. So there's definitely some increased risk for Oracle as it spends more, has to issue more equity where Microsoft at least has. And I'm using Microsoft, but you could interchange this with Google or Alphabet.

Same kind of reasoning. Metas probably similar as well is these companies still have a buffer. They still generate some pretty substantial cash. So despite this massive infrastructure spend that they're doing, whereas their reality is Oracle, as good as it may sound for the RPO, they just are, they have to borrow. and they better be really executing, but they, I mean, it just increases the risk. Like, there's no other way to put it. Yeah, I mean, they're, they're all in effectively.

Like there's no going back from it. No, exactly. So I think that's a good, good spot to end it. I hopefully everyone enjoyed the episode, a little bit of everything here. So even though earnings are slowing down, we still were able to find some. It's been so busy in the last few weeks in terms of news and earnings that we were able to get some that reported. maybe a week or two ago and just do our overview of it. We appreciate all the support.

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