As artificial intelligence adoption moves from experimentation to implementation, investors are increasingly shifting away from companies focused on building AI infrastructure and toward those using the technology to drive efficiency and earnings growth. The shift is coinciding with renewed interest in smaller-cap stocks as markets look for clearer returns on years of heavy AI-related spending.
BNN Bloomberg spoke with Eric Jackson, founder and president of EMJ Capital, about why markets are beginning to reward AI execution over scale, how sectors such as housing, energy and local platforms may benefit, and where he sees emerging opportunities across Canadian and U.S. stocks.
Key Takeaways
- Investor focus is shifting from AI infrastructure builders toward companies that can demonstrate measurable efficiency and earnings gains from AI adoption.
- Smaller and lesser-known companies are gaining attention as markets look for clearer payoffs from years of heavy AI-related capital spending.
- AI applications in housing and real estate are improving pricing accuracy, risk management and operating efficiency despite cautious sector sentiment.
- The intersection of AI, energy and computing power is elevating the importance of companies with flexible infrastructure beyond pure crypto exposure.
- Platforms with large, verified user bases may unlock new revenue opportunities through AI-driven local discovery and commerce.
Read the full transcript below:
ANDREW: As companies begin using artificial intelligence in their operations, our next guest is in the camp that says investors are shifting their focus from tech companies that build AI infrastructure to those that are actually using it to improve efficiency and execution. Let’s get more from Eric Jackson, founder and president of EMJ Capital. Eric, thanks very much indeed for joining us.
We have seen some selling in the Magnificent Seven stocks. They’ve been lagging. And you think people are trying to move on from the actual buildout of AI — even though it’s going to last for years yet — and instead look for companies that are really using it effectively?
ERIC: Andy, yes, I think so. One of the things that’s also been interesting just in the last six months or so has been the rise of the Russell 2000 again, much maligned. And I think those two are related — the sagging interest in the Magnificent Seven and the increased interest in the Russell 2000.
It does coincide with this 2026 trend that I’m playing for, Andy, which is basically looking for smaller, lesser-known companies that are actually taking AI, putting it into practice, and seeing the benefits pay off in their earnings in 2026.
ANDREW: Do you think — it’s the dogs in the street, of course, barking that OpenAI may well run into trouble with its big debt and minuscule revenue compared to its spending right now — if OpenAI runs into trouble, do you think that will cast a shadow over the entire AI sector?
ERIC: Well, yeah. There’s a high degree of correlation between them, and that spillover effect does affect the markets in general. So if there’s any kind of growth scare, or if there were ever signs this year of people pulling back on capital expenditures or the purchase of new Nvidia chips, that would cast a shadow for sure.
But the trend I’m suggesting people watch for is this: one of the big questions hanging over the AI space has been the payoff from these billions of dollars of capex that keep going quarter after quarter, year after year. People want to see when there’s going to be evidence that this really makes money.
I do think we’ll see evidence of that in spades. We’ve seen signs in the last few months. Traditional software firms like SAP and Salesforce have really pulled back and lagged the broader indexes. I think that’s a precursor move. AI is hurting some players immediately, but we haven’t yet seen the success stories — the case studies, the poster children — where AI is directly benefiting companies beyond Nvidia and OpenAI. I think we’re going to see that this year.
ANDREW: Can we get to some stocks? We’ve talked to you about these before. Opendoor — you’ve long been a fan of this stock. What’s your take now?
ERIC: They’re taking AI and applying it to consumer real estate, first in the U.S. and eventually worldwide. They’re led by a new CEO since September, Kaz Nejatian, a Canadian who left the number two job at Shopify.
He could have stayed there, kept his head down and eventually taken over, but he decided to leave because he saw greener pastures at this smaller upstart, Opendoor, and how it could apply AI to real estate. Imagine never having to deal with a real estate agent again — never having people walk through your house for viewings — and doing it all online. Immediate cash offers, with money showing up in your bank account days later. That’s what Opendoor is trying to unlock.
Kaz has only had one earnings call so far, and that was still reporting numbers from the prior CEO’s tenure. At the end of February, we’ll get his first quarter where he was there the entire time. He’s already alluded to the fact that it used to take about 11 people to generate an offer when someone asked for a quote. Now it’s down to one, in less than a quarter, using AI.
I think we’ll see evidence of cost reductions, headcount efficiency and improved execution. This won’t be a 100-bagger in one quarter, but I expect to see proof this is on a longer-term trajectory similar to what we saw with Carvana.
ANDREW: Your next idea is Hut 8. Before we get into that — they have been a crypto player — why is crypto down so much from its highs?
ERIC: It’s been a bit of a slap in the face for crypto investors who missed gold and silver’s run. But I am bullish on crypto. I think we saw a big pullback starting in October tied to forced deleveraging after a stablecoin mispricing on Binance. That had spillover effects, given how much margin had built up in the system.
I think it’s a pause. I do expect bitcoin to return to all-time highs in 2026. Companies like Hut 8, and others I’ve mentioned before, have diversified beyond pure-play bitcoin mining into AI data centres, leveraging their expertise in power and infrastructure. When crypto goes up, Hut 8 still benefits, but it’s no longer a one-to-one relationship like it was before.
ANDREW: We’ve only got about 30 seconds left. Nextdoor is another stock you’ve favoured. What’s the latest?
ERIC: This is another AI payoff story. It’s often thought of as a failed Yelp-style local platform, but what’s different is that it has about 100 million verified users. You have to prove you live at a specific address, which means there’s very little spam.
The opportunity is using AI to improve local discovery and commerce — matching services to neighbourhood demand in real time. That kind of lead-generation opportunity didn’t exist before AI. I think the market still values Nextdoor as a legacy social app, but it has the potential to be valued more like a utility platform. That valuation mismatch is what excites me going into 2026.
ANDREW: Always great hearing from you. Eric Jackson, founder and president of EMJ Capital.
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This BNN Bloomberg summary and transcript of the Jan. 26, 2026 interview with Eric Jackson 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.
