Technology stocks are back in focus as investors weigh the benefits of rising artificial intelligence investment, concerns around private credit and steady demand for essential software. Some companies are standing out for their ability to balance growth with disciplined capital allocation.
BNN Bloomberg spoke with Jed Ellerbroek, portfolio manager at Argent Capital Management, about technology names he believes are well positioned to benefit from AI infrastructure expansion, resilient private-market performance and long-term demand from government customers.
Key Takeaways
- Investors are increasingly focused on technology companies that can scale artificial intelligence infrastructure while preserving margins and returns on capital.
- Demand for cloud computing continues to exceed supply, supporting long-term investment in data centres and related infrastructure.
- Private credit concerns remain elevated, but consistent performance is helping alleviate fears around asset quality and defaults.
- Software providers serving governments benefit from sticky customers, limited competition and demand for cost-saving solutions.
- Valuations in parts of the tech sector appear attractive after recent underperformance despite steady growth prospects.
Read the full transcript below:
ANDREW: Time for Hot Picks in technology. Our guest has Microsoft as his top selection and says the company is a clear artificial intelligence winner. Let’s get more from Jed Ellerbroek, portfolio manager at Argent Capital Management. Jed, thanks very much for joining us. What’s the bull case for Microsoft when it comes to AI?
JED: Thanks, Andrew. The bull case for Microsoft is that Azure is the fastest-growing cloud computing business in the world. Its major customer, OpenAI, is seeing rapidly rising usage and workloads, and Azure benefits directly from that. Microsoft has also been able to maintain operating margins despite very strong growth, which is something most cloud computing companies have struggled to do. Oracle, for example, has seen margins come under pressure as revenue growth has accelerated. Microsoft hasn’t had to make that tradeoff. Its software business is also performing well and growing consistently, so the company is really firing on all cylinders — strong revenue growth, stable margins and continued heavy investment in data centres that are generating a clear return on investment.
ANDREW: You say Microsoft is aggressively building out data centres to handle enormous computing needs, but doing so in a prudent way.
JED: That’s right. All of the major cloud providers — Microsoft, Amazon and Google — have more demand today than they can satisfy. New supply comes from opening large, new AI-focused data centres that are under construction around the world. They’re chasing demand, but doing it responsibly by building centres that are flexible and usable for a wide range of workloads, rather than rushing to build wherever they can get permits.
ANDREW: Let’s move to your next pick. It may not immediately come to mind as a technology stock, but Apollo Global Management is becoming a major player in data centres.
JED: Apollo has expanded into financing data centres, and we think it’s a compelling stock. The valuation came down after the shares underperformed earlier in 2025, though they’ve begun to rebound. Demand for Apollo’s alternative investment products remains very strong, and the company is heading into a fundraising cycle that we expect will drive growth in 2026 and 2027.
ANDREW: How much of Apollo’s business is now focused on technology-related investments?
JED: It’s still a relatively small portion, but it’s growing quickly. Roughly 80 per cent of Apollo’s business is private credit lending. The infrastructure group that focuses on data centres is a smaller slice, but it’s expanding rapidly. There’s been a lot of concern around private credit following some high-profile bankruptcies, particularly tied to the auto sector, but we think those fears are overdone and will be disproven over the next few quarters through consistent execution by Apollo and other private credit managers.
ANDREW: Finally, let’s talk about Tyler Technologies. Remind us what the company does and what stands out to you.
JED: Tyler is a niche business that many people haven’t heard of. It provides software and technology services to cities, municipalities, counties and states, primarily in the United States. These customers are generally slow to adopt new technology and need help managing core operations such as utility billing, accounting, courts and public safety systems. Tyler is the best-in-class provider in this niche, with about 50 per cent market share. The company is highly profitable, which allows it to reinvest in adding AI functionality to its existing software. We think customers will be eager to adopt those tools over the next several years.
ANDREW: What does an AI add-on look like in that context?
JED: Often it’s something fairly simple. Instead of filling out a long online form to book a community facility, for example, users might interact with a chat-style interface that’s easier and faster to use. That kind of self-service functionality can reduce the need for call centres and help desks, which is appealing for cities and states focused on cost savings.
ANDREW: Some people are wary of self-service AI, especially when it comes to accuracy and reliability.
JED: Data integrity is a major issue, and it has slowed adoption. Tyler is taking a deliberate approach, focusing on accuracy and trust so users can rely on the information they receive.
ANDREW: Jed, thank you very much for your time.
JED: Thank you.
ANDREW: Jed Ellerbroek, portfolio manager at Argent Capital Management.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MSFT NASDAQ | Y | N | Y |
| APO NYSE | Y | N | Y |
| TYL NYSE | Y | N | Y |
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This BNN Bloomberg summary and transcript of the Dec. 16, 2025 interview with Jed Ellerbroek are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
