A sharp rally in quantum computing stocks is drawing renewed investor attention to speculative tech, as markets shift focus to earnings season and capital spending trends.
BNN Bloomberg spoke with Jed Ellerbroek, portfolio manager at Argent Capital Management, about how investors are weighing opportunities across big tech, banks and industrials, and where risks may be building.
Key Takeaways
- Quantum computing stocks have surged on renewed investor interest, driven by AI developments, technical milestones and a broader rally in risk assets.
- Amazon is expected to post accelerating growth in its cloud business, with investor confidence improving around returns on data centre spending.
- Tesla faces valuation concerns despite progress in technology, with potential competition for investor capital from a possible SpaceX IPO.
- Large U.S. banks reported strong earnings, supported by resilient economic conditions, low credit losses and increasing capital returns.
- Eaton is positioned to benefit from long-term demand in data centres and infrastructure, with margin pressures expected to ease as expansion costs decline.
Read the full transcript below:
ANDREW: Xanadu Quantum Technologies just listed in Toronto, and it has surged over the past week or so, making its CEO a billionaire almost overnight. It is part of a recent surge in quantum computing stocks. Let’s get more from Jed Ellerbroek, portfolio manager at Argent Capital Management. Thanks very much indeed for joining us.
JED: Happy to be here.
ANDREW: There are a few quantum computing stocks out there, but it is obviously highly uncertain when they will ever be able to sustainably post profits.
JED: Yeah, absolutely. It is an early-stage technology. There are a handful of publicly traded companies that are trying to build hardware systems using quantum tools. But I think the big news most recently has probably been Nvidia’s announcement of an open-source quantum AI model, which really kind of reignited interest in the space.
ANDREW: Wow, open-source AI and quantum together at last. So that sounds pretty potent.
JED: Yeah, it does. It really got investors excited here over the last couple of weeks. And then we have also seen a few achievements of technical milestones related to the hardware over the last few weeks, too. And then I guess the third factor is probably that there has been a big rally in risk assets in equity markets here over the last couple of weeks. Unprofitable companies, smaller companies, pre-revenue companies have been leading the stock market over the last few weeks, and quantum stocks obviously fit into that group.
ANDREW: That is interesting. Certain market phases, investors reach out for deliberately speculative names, don’t they?
JED: Yeah, that is right. Quantum stocks have been weak over the last six months, maybe nine months, and then that resurgence here that you mentioned just within the last two weeks.
ANDREW: Let’s talk briefly about a stock that does have a substantial business — Amazon. That stock hit an all-time high. Next week, we are looking ahead to earnings. What are you going to be focusing on when they report? I believe it is Wednesday afternoon.
JED: Yeah, that is right. Amazon stock, as well as a lot of the other big tech “Magnificent Seven” stocks, have really staged a strong rebound over the last couple of weeks, as investors seem to be gaining a little bit of comfort with their capex outlook and a little bit of trust and confidence that these companies will earn a good return on that data centre construction investment. We are going to see AWS, which is Amazon’s cloud computing unit, report really strong revenue growth — accelerating revenue growth, perhaps into the high 20s per cent, compared to just 23 per cent last quarter. And then the retail business keeps chugging along, doing well.
ANDREW: One tech stock that you would be a seller of right now, though — Tesla?
JED: Yeah, I think Tesla trades at a really high valuation. They do have exciting robotic products that are hopefully coming to market. They are making progress with their self-driving vehicle technology. They have expanded to a couple of new cities in Texas, I think they announced that over the weekend. That is all good news. But the stock trades at a really high valuation. And I think for Elon Musk fans, there is going to be another publicly traded investment option that might capture dollars and take investor interest from Tesla — that being SpaceX, of course, which is planning an IPO in the June timeframe.
ANDREW: That will be interesting, won’t it, if there is cannibalization in terms of investor sentiment?
JED: Yeah, I think there might be. SpaceX is going to be a much larger company than Tesla by market cap.
ANDREW: So it will be the big brother. What about the big U.S. banks, the likes of JPMorgan, etc.? Do you see promise there? Would you be buyers of those shares?
JED: Yeah, we think JPMorgan and also PNC are outstanding companies. The U.S. economy remains incredibly resilient, and so big banks are serving that growing demand as the economy grows, while also keeping credit losses low. I think that is another big takeaway from these companies reporting their earnings last week. Additionally, we see pretty decent activity in M&A and IPOs, and there is a lot of share repurchases and dividend growth coming as U.S. banking regulations ease under the Trump administration.
ANDREW: One name we keep hearing is Eaton. It is a supplier of electrical equipment and an obvious winner if this huge data centre buildout continues.
JED: Yeah, Eaton is in the process of spinning off its automotive division, which is a slower-growing, less profitable business, so it can focus 100 per cent of its attention on its electrical units serving data centres, big non-residential construction projects, and also the aerospace and defence industry. Both aerospace and defence and the data centre end market are growing nicely, and I think they have durable, secular growth opportunities, not just cyclical strength today.
ANDREW: Are you worried, though, that this could be a crowded trade now — electricity and electrical equipment?
JED: Yeah, Eaton has actually underperformed over the last year. You are right — those investment areas are of high interest today to investors, but investors have been frustrated and disappointed that Eaton’s margins have been weaker than expected. They have been weaker because the company is investing to expand output, and that is costly, especially upfront. I think over the next year, as they move past a lot of those startup expenses, we will see margin improvement. I think Eaton’s recent strength in the stock has been a result of that. Investors are moving past the startup costs and focusing on longer-term secular demand. So I think it is a reasonably priced stock.
ANDREW: Thank you very much. I really appreciate it. Jed Ellerbroek, portfolio manager at Argent Capital Management.
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This BNN Bloomberg summary and transcript of the April 20, 2026 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.
