Markets are entering what is typically a strong stretch for equities, but high valuations in artificial intelligence stocks have some investors getting defensive. After a powerful multi-year run, many are wondering how long the rally can last.
BNN Bloomberg spoke with Kyle Taylor, wealth advisor and portfolio manager at TriDelta Private Wealth, who says AI remains a lasting investment theme but warns valuations leave little room for disappointment. He also shared his market outlook and stock ideas spanning auto parts, income and emerging-market telecoms.
Key Takeaways
- Taylor says AI remains a durable trend, but valuations are stretched and vulnerable to short-term corrections.
- He notes the Magnificent Seven are still growing but at their slowest pace since early 2023.
- Investors have turned defensive and are holding more cash amid profit-taking and tariff uncertainty.
- Taylor highlights Martinrea, Alaris Equity Partners and Millicom as opportunities for value and income seekers.
- He says any near-term correction should be viewed as healthy after years of strong equity gains.
Read the full transcript below:
ANDREW: Historically, November and December have been good months for equity markets. But what might make this year different are the high valuations in the artificial intelligence space. It seems, though, that right now nobody wants to leave the party. Let’s get more from Kyle Taylor, wealth advisor and portfolio manager at TriDelta Private Wealth. Great to see you.
KYLE: Good to see you.
ANDREW: We often hear that these hyperscalers are making loads of money, so they’re not speculative stocks.
KYLE: Well, you said it yourself. Everyone’s kind of worried about how far the party has gone, and maybe people aren’t ready to leave yet, but they’re inching closer to the door. There’s a great Morgan Housel quote that says, every valuation is just a number today multiplied by a story about tomorrow. Right now, that story is AI, and it leaves little room for disappointment given how far valuations have climbed.
One of the things we noticed in the third quarter is that even though the Magnificent Seven have continued to see excellent growth — and much of that comes with heavy spending on AI and data centres — they’ve actually seen their slowest pace of growth since early 2023. That’s something that’s causing concern among AI investors, and it’s leading some to become more defensive and build cash within their portfolios.
ANDREW: So the law of big numbers catching up, even with the hyperscalers — their growth rate is starting to level off?
KYLE: Something we’ve discussed with clients recently is that we’ve seen periods of exuberance before. The dot-com bubble is an easy example — the buildup of fibre and data centres led to bankruptcies and overspending once it became clear there was overcapacity. This decade, it was lithium related to the electric-vehicle boom, and that didn’t pan out as expected.
Even though many companies still say they lack sufficient computing power — and that’s driving further spending — valuations today leave very little room for disappointment. That’s a reason to be more active, perhaps build a more defensive buffer within your portfolio.
ANDREW: We’ll get to a few stock ideas in a second. I’m looking at some of these huge U.S. electricity generators like Constellation Energy or Vistra. Constellation is CEG — they’ve had a big run, but they’re off their highs. People thought there’d be massive power demand from AI.
KYLE: I still think there will be. It’s no secret that AI will continue to require significant power, but the concern is overcapacity and whether all the AI promises ultimately play out as expected.
ANDREW: Broadly, what kind of stocks would you go into — the old dividend-growth names, for example?
KYLE: It’s funny you ask, because if you look at the valuations of Microsoft, Meta or Amazon today, they’re actually trading cheaper than Walmart. So you really have to dig deeper into what you own and what price you’re paying, because price ultimately matters.
There’s a great example I’ve used many times, going back to the dot-com bubble with Cisco. If you bought Cisco at the peak, it took more than 20 years to get back to where you bought it. If you bought it because you thought it would triple its revenues and become the backbone of the internet revolution, you were right — but you bought it at a terrible price.
ANDREW: So it might be a great company but a bad stock. Martinrea International — you like this one, an auto-parts player?
KYLE: Yes, Martinrea is definitely the higher-risk name on my list. It’s an automotive supplier of lightweight structures and propulsion systems. Its customers include most major automakers in North America, Asia and Europe.
They reported earnings yesterday and maintained full-year guidance. Revenues were down, but that’s largely due to industry uncertainty and how tariffs will ultimately shake out. They have some good levers to pull — about 75 per cent of their revenues are in North America, and they already have strong operations in the U.S., which helps them manage tariff risk.
They could also pivot toward their European and Asian customers if opportunities open there. The low valuation, roughly a two per cent dividend, and promising growth opportunities make it a compelling entry point this year.
ANDREW: Your next idea is Alaris Equity Partners. They’ve got dozens of holdings — more than 40 businesses — across industrials, healthcare, aerospace, home retailing…
KYLE: Exactly. They’re involved in many of the economy’s core sectors and have an excellent track record. The team, based in Calgary, provides alternative financing to private businesses in North America. They’ve done an excellent job.
Investors typically buy them for the yield — about seven per cent today — but our 12-month price target is $25. We think there’s room for capital appreciation too, which should serve investors well.
ANDREW: And they’re only distributing about 60 per cent of their cash flow?
KYLE: Yes, their payout ratio is relatively low. That’s something income investors really watch for, since it gives them flexibility to maintain distributions and deploy capital into new opportunities.
ANDREW: Should companies be obliged to publish their payout ratio? Definitions of cash flow vary, but should regulators make them disclose it?
KYLE: I think it makes sense from an investment perspective, but that’s probably above my pay grade.
ANDREW: Millicom International Cellular — they offer telecom services in Latin America.
KYLE: They do. They’re based in Luxembourg but traded on the Nasdaq, with operations in smaller Latin American countries. Guatemala represents about 30 per cent of their revenues. They also operate in El Salvador, Paraguay, Panama and Colombia.
They have significant growth opportunities given the relatively low smartphone penetration in those markets — about 60 per cent of their customers have 4G smartphones. That creates upside potential for data services, but for now, wireless and fixed-line telecom remain the core profit drivers.
They’ve expanded recently into Panama and Colombia. One near-term catalyst could be a pending acquisition awaiting regulatory approval in Colombia. If it goes through, it could draw more attention to the stock, which is undercovered. More coverage could bring momentum.
ANDREW: And you get a six per cent dividend?
KYLE: You do — and that’s nothing to laugh about.
ANDREW: Thanks very much for joining us, and thanks for coming to Scarborough. Great to welcome you here. Kyle Taylor, wealth advisor and portfolio manager at TriDelta Private Wealth.
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This BNN Bloomberg summary and transcript of the Nov. 12, 2025 interview with Kyle Taylor 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.
