CoreWeave’s stronger third-quarter results and increased annual guidance have brought renewed attention to the AI cloud sector following a technology sell-off.
BNN Bloomberg spoke with Lorne Steinberg, co-president of Lorne Steinberg Wealth Management, about the implications for technology shares and opportunities tied to Canada’s major project buildout.
Key Takeaways
- Strong demand supports AI cloud growth, but financing, timely data centre construction and public policy remain key risks, Steinberg says.
- Software valuations offer opportunities where concerns about AI disruption have outpaced evidence of business deterioration, he argues.
- Share buybacks, asset sales and reinvestment can help software companies unlock value, while heavy AI spending can constrain near-term free cash flow.
- Canadian equipment suppliers could benefit from infrastructure and data centre construction, with Steinberg highlighting Finning and Toromont.
- Critical minerals, transportation and data centre projects could support engineering demand, underpinning Steinberg’s interest in WSP Global.
Read the full transcript below:
ROGER: CoreWeave showed a strong third quarter, lifting its guidance for the year. The neocloud provider has been facing pressure in recent months as investors continue to weigh a volatile tech trade. Let’s get more from Lorne Steinberg, co-president of Lorne Steinberg Wealth Management. Lorne, thanks as always for joining us.
LORNE: Thank you, Roger.
ROGER: OK, it’s been a rough little while, but a good day today for CoreWeave. What do you see they did right, and what’s driving this?
LORNE: Well, I think the No. 1 thing is the stock’s been under tremendous pressure, in large part due to the amount of money they’ve had to borrow, and the bond prices for CoreWeave have been decimated, which would have made it very difficult to raise more cash. So today’s print, I think, gives investors, first of all, a lot of comfort that CoreWeave’s revenues are on track. They’ve raised their guidance that they’re going to deliver over $13 billion of revenues this year. Their margins have improved, but I think, really significantly, they’ve indicated, Roger, that they’re only going to have to raise about $5 billion through 2027 to meet their buildout capacity that they have promised to their customers, and they should be easily able to do that at bond prices that would probably be in the seven to eight per cent range. So it’s a huge sigh of relief to investors and takes the pressure off in the near term.
ROGER: So, so what does this mean then for other, other neoclouds like Nebulas — Nebius, excuse me — and IREN?
LORNE: So, I think a lot of it has to do with the guidance provided that they are massively oversubscribed on the amount of capacity they can build out, so that, to me, makes the whole sector look very stable and strong growth for the next couple of years. I think the biggest issue going forward past, you know, ’27 or ’28 is the — of course, the midterm elections in the States, you know, indicate that we may get fewer data centres built out than are — were originally, you know, on the slate, and that could have a negative impact. The biggest tough thing for CoreWeave, but they’ve shown zero problem with this, is they have to deliver these data centres on time, or else they would be subject to penalties and possibly cancellation. But thus far, there have been — there’s been zero indication of that. So I think the industry is stable for next couple of years. But really, public policy may have some impact on the industry as a whole. But pretty positive for everybody.
ROGER: So it’s going to — it sounds like it’s going to take some work. There must — there’s opportunities, though, in these moments, isn’t there?
LORNE: Absolutely. The stock is still way down from where it was, but this gives investors a lot of comfort that the company is here to stay for the next few years. That’s for sure.
ROGER: All right. Some names that pop up for you within tech: Constellation, Open Text, Adobe, Alphabet. What are you seeing there? What do you see for opportunities there?
LORNE: So first of all, let me deal with a couple of Canadian stocks first. So Constellation Software has been a spectacular growth story, growth by acquisition, delivering, you know, 15 per cent annualized revenue growth, which we see continuing going forward. The stock was under pressure and way down from where it was. Of course, because people feared AI would cut into the need for software. But they really deal with small and medium-sized businesses to a great extent. Those companies just don’t have the capacity to do it themselves. So for us, this is — remains a great opportunity to get into one of Canada’s few real growth stories, and a company with a — you know, in a pretty unique position.
The second company is Open Text. Open Text has been a zero grower for the past few years. They switched CEOs. We like what’s going on there, but Open Text, Roger, is actually the cheapest company in our portfolio, trading at about six times earnings, delivering significant free cash flow, and the new management team has been very clear that they are there to create value finally for shareholders, and that’s starting to take the form of share — significant share buybacks, as well as investing in growth, but also divesting themselves of assets which were basically going nowhere.
On the U.S. side, let me be clear: one of the cheapest stocks we own is Adobe. Adobe, also another software company under pressure because of fears of AI, but there has been absolutely zero indication that anything is being cut out of their business. Every quarter is another 10 per cent-plus revenue and earnings grower, and at 10 times free cash flow, this company is actually buying back significant stock, and, you know, we see the stock worth double the current share price.
And, and finally, when we look at Alphabet, you know, just among the best in the world at what they do, the best in many areas. Alphabet’s been under pressure because, of course, the AI spend, the capex they’re putting out, is eating up all of their free cash flow and then some for the next couple of years. That being said, Alphabet has over five — a backlog of over $500 billion. So a lot of this capex will be producing short-term return on investment very quickly. The company’s trading at the cheapest valuation it has in many years, 15 times earnings, and revenues are growing at an astounding 25 per cent, which we expect to continue per year for the next couple of years. So this is just an incredible opportune entry opportunity to get into a company of this quality.
ROGER: OK, the other big AI, at least in Canada, the other big story — AI is everywhere, of course — but the big Canadian major project buildout. You’re seeing opportunities there. Finning showing up for you. Toromont, WSP. Some quick reasons on those ones why they’ve got your attention.
LORNE: Sure. So Toromont, Toromont and Finning are the largest Caterpillar dealers. Finning’s the largest. Toromont second. And of course, to build out all of these projects, you’re going to need a lot of equipment, and you have nowhere else to go in Canada but Finning and Toromont. So these companies already have a record backlog, and these projects haven’t even started yet. They’ll both benefit from data centre buildout, infrastructure, etc.
Interestingly, Toromont also has a division that caters specifically to data centres because they sell power supplies and in — and enclosures for data centres. Canada should be somewhat of a beneficiary if there’s some pushback in the U.S. of — in communities that don’t want to build data centres, and we’re already seeing data centre approvals here in Canada, you know, from the likes of Meta, et cetera. So both these companies are primed to deliver double-digit earnings growth for years to come. They also both happen to be dividend aristocrats, with Finning having raised its dividend every year for 25 straight years, Toromont every year for 37 straight years. So these are just two incredibly fine companies.
WSP Global, of course, is the large engineering company, and they are poised to get contracts across the board. Critical minerals as they build out the Ring of Fire, transportation, data centres. The stock has been under pressure with most engineering companies because of fears that AI would require, you know, smaller contracts from large companies. There again is zero evidence of this, and we’re looking at WSP Global to be also a double-digit grower. So here are three Canadian companies that will absolutely benefit from the buildout in Canada.
ROGER: All right, we have to wrap it up there, Lorne. But thanks as always for joining us.
LORNE: Roger, thank you so much for having me.
ROGER: Lorne Steinberg, co-president of Lorne Steinberg Wealth Management.
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This BNN Bloomberg summary and transcript of the Nov. 11, 2026 interview with Lorne Steinberg 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.
