Oil prices remain volatile as uncertainty over U.S.-Iran negotiations continues to drive swings, while investors shift focus toward earnings season and sector positioning.
BNN Bloomberg spoke with Allan Small, senior investment advisor at iA Private Wealth Inc., who said investors are avoiding energy exposure, favouring power generation and technology stocks, while staying selective as valuations rise.
Key Takeaways
- Oil prices remain highly sensitive to developments around U.S.-Iran negotiations, with a potential deal likely to push crude lower quickly.
- Energy stocks are less attractive at current valuations, with investors instead favouring power generation tied to data centre and electricity demand.
- Utility stocks have shifted from income plays to growth and income, driven by rising demand for electricity infrastructure.
- Technology stocks continue to offer opportunities, particularly in large-cap software and AI-linked names, despite recent rebounds.
- Elevated valuations across equities, including Canadian banks, are making stock selection more critical as earnings season unfolds.
Read the full transcript below:
ANDREW: So we’ve got something of a whipsaw going on in the oil market. Let’s put up a one-month chart. Oil up again today on signs that Iran is not keen to resume talks, but it’s not clear whether negotiations with the U.S. will resume. We’re joined by Allan Small, senior investment advisor at iA Private Wealth. Great to see you.
ALLAN: Good morning.
ANDREW: Give us your thoughts on oil first.
ALLAN: Yeah, so, you know, it’s as goes oil goes the market, of course. As goes the conflict in the Middle East goes, obviously, the price of oil. So, you know, a little concerned about the price of oil for those that are looking to buy oil stocks. Obviously, if there is some sort of deal made — and we keep going back and forth whether a deal can be made — but if a deal is made, then I would say the price of oil will drop significantly.
We’ve already seen a drop from over $100 a barrel to now into the high $80s, and we’ve seen it, I think, over prior to the weekend, late last week, get as low as $81. So, you know, a lot of people are saying the price of oil is going to take a while for it to come back down. I don’t believe that will be the case. I think the market will be, as always, forward-looking, and I would not be surprised to see oil fall even below $80 if we can see a deal done between the United States and Iran, and if the Strait of Hormuz is open.
I realize that a lot of people are saying it’s going to take a while for things to get back up and running smoothly — oil, natural gas and everything else coming out of the Strait — but the market is forward-looking, and I think it’ll price it in. I think we need to be mindful of that if you are an oil investor.
ANDREW: Would you be inclined right now to up your weighting in oil, though, or…?
ALLAN: I definitely not. Yeah, I think right now I’ve underweight energy, and I will probably remain so. I’m more into the power generation, more the grid, electricity, and that again, more for the data centre-type investment play than the oil play.
So for me, you know, names like Vistra in the U.S., GE Vernova — these are power generators. These are the names I think have room to run, especially Vistra, trading very cheaply right now. So yeah, for me, I’d rather go there than an oil name at this point, which are still pretty high in terms of valuation.
ANDREW: Vistra, VST in New York, power generator, not a big yield. That’s interesting, only about half of a per cent.
ALLAN: Yeah, more for a growth play in that case.
ANDREW: Right. That’s interesting, because the likes of Fortis in Canada — would you be attracted to Canadian utilities?
ALLAN: Yeah, I think I’ve always been more partial to Emera versus Fortis. You get better yield for a while. But these names also are at near 52-week or all-time highs.
You know, once upon a time, these utility stocks were bought just for the dividend yield, and here they are now — growth and income over the last little while, again on the back of power generation, electrical grids, things like that, to power the data centres of the future, as we say. These are the names that individual investors have migrated towards.
ANDREW: What about tech? We can be sure the software companies are scrambling to convince customers that they need to go on paying for high-priced services. Would you be interested in, say, CGI, GIB.A?
ALLAN: Yeah, I think tech is a great place to be. We’ve seen it time and time again. I think the biggest thing that I’m taking out of what’s going on right now with the conflict in the Middle East is opportunity for investors.
We know that when there is a ceasefire or this conflict comes to an end, the market gets a pretty big boost. We saw it last week, we’ve seen it over the last couple of weeks, and tech has been the benefactor of that.
You talk about software — I think a lot of these software names, especially the big-cap software names, are still undervalued. I don’t believe that AI is going to just wipe out names like Salesforce and ServiceNow, some of the bigger software companies, Microsoft. So I think they do represent good value.
I think tech in general — Canada, U.S. — Celestica is a name I was purchasing for a while. It came down quite a bit and now is back at all-time highs once again. It is, I guess, the closest thing that we have in our country as an AI play.
Celestica, once upon a time, was at 50 times earnings, dropped down to under 30 times. That is the time when you start to buy the name. Now it’s obviously back a lot higher. So a name like Celestica is probably a hold if you own it, maybe trim some off the top. But definitely tech are names that I like going forward.
ANDREW: Actually, Celestica hitting a record high today, and as we can see, up well over fourfold in the past year. Incredible.
ALLAN: Unbelievable. Again, when it gets to these prices, it gets a little lofty in terms of valuation. So I think it’s a name that you trim back some of the profits at these levels. You probably still want to own it, because of what they’re saying and how they’re performing.
They just reported results not that long ago — good numbers — and the stock was actually falling even after they reported a strong quarter. So that’s where you want to be. I think tech makes a lot of sense here at these valuations.
ANDREW: Nvidia is interesting. Obviously, they’ve got a massive franchise, but companies — big customers like Amazon and Alphabet — are anxious to reduce their reliance on Nvidia’s devices.
ALLAN: Of course, and I think that is why you’ve seen Nvidia, at least for the last 10 to 12 months, kind of in a trading range. You’ve seen companies like Amazon with their chips, Broadcom with theirs — everyone seems to be producing a chip at this point in time.
And I think maybe that is why investors have a bit of cold feet when it comes to Nvidia, although back at $200 a share again. For me, I’m actually looking at a name like Nvidia because I think they do a lot more than just chips. They have the whole stack.
So, in my opinion, I think it’s a name that can break out from this channel it’s been trading in, maybe get closer to that $225 to $230 range.
ANDREW: Certainly. October was the record high, north of $207. The Canadian bank index hitting a new record high today.
ALLAN: Unbelievable. And just a couple of years ago, we were all talking about bank stocks and how cheap they were. They were yielding over five or six per cent.
Now look at them. A couple of years later, it begs the question — should you be buying Canadian bank stocks today? At these valuations, you’re looking at around 15 times forward earnings for many of them.
So it’s tough to get in at these lofty levels. Maybe Scotiabank is one where you could take a small position, still yielding well over four per cent, but the others — the yields are just, in my opinion, too low to get excited about.
Overall, valuations are tough right now. With indexes back near all-time highs, investors really have to be selective and do their homework.
ANDREW: Allan, thank you very much.
ALLAN: Thank you.
ANDREW: Allan Small, senior investment advisor at iA Private Wealth.
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This BNN Bloomberg summary and transcript of the April 20, 2026 interview with Allan Small 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.
