Stan Wong, Portfolio Manager at Scotia Wealth Management
Focus: North American large caps & ETFs
Top picks: Amazon.com, Cardinal Health, DoorDash
MARKET OUTLOOK:
Equity markets enter September on the back of four consecutive months of gains, capped by a strong summer rally. Technology and artificial intelligence (AI)-related themes remain key drivers of momentum, though elevated valuations highlight the need for selectivity.
The broader growth story in semiconductors, cloud, and digital innovation continues to underpin market strength, while September’s historical volatility may amplify market swings in the weeks ahead.
In the U.S., second-quarter GDP expanded at an annualized 3.3 per cent, rebounding sharply from a contraction in the first quarter. The upside surprise reflected resilient consumer spending, solid business investment, and a sharp decline in imports. Corporate earnings were equally supportive: S&P 500 earnings grew 13 per cent year-over-year in the second quarter, with more than 81 per cent of companies beating expectations.
Looking ahead, analysts forecast almost 12 per cent earnings growth in 2026, reinforcing optimism for continued equity gains. Strong balance sheet activity is also notable, with over US$1 trillion in stock buybacks this year. Meanwhile, the US$7.2 trillion held in U.S. money market funds represents significant liquidity that could re-enter equities as interest rates move lower.
Monetary policy remains central to market direction. Investors widely expect the U.S. Federal Reserve to deliver its first rate cut in September, with easing inflation and resilient growth providing flexibility. In Canada, the economy contracted by about 1.6 per cent annualized in the second quarter, largely due to weaker exports tied to U.S. tariffs. Domestic demand, however, remained firm through consumer spending, housing, and government outlays, leaving the Bank of Canada balancing external headwinds against internal strength as it considers policy moves.
At The Stan Wong Group, we remain constructive on equities, focusing on high-quality large-cap companies in technology, financials, and healthcare, while maintaining a preference for government and investment-grade corporate bonds in fixed income.
Our approach emphasizes discipline, diversification, and tactical adjustments – anchored by a sound financial plan – to help clients navigate near-term volatility while keeping long-term goals in focus.
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TOP PICKS:
Amazon.com (AMZN NASD)
Amazon remains the global leader in e-commerce and maintains a dominant position in cloud infrastructure through Amazon Web Services (AWS). Its retail business benefits from unmatched economies of scale, Prime membership adoption, and advanced logistics capabilities, while AWS continues to deliver high-margin growth and account for the majority of operating profits. Fiscal 2026 revenue is expected to reach nearly US$780 billion, supported by strong demand across retail, cloud computing, and digital advertising.
The company continues to expand beyond its traditional retail model, with advertising emerging as one of its fastest-growing and highest-margin businesses. AWS remains the profit engine, delivering reliable double-digit growth while leveraging artificial intelligence and automation to drive efficiency gains. Amazon is also investing heavily in robotics, generative AI, and global data centre infrastructure, reinforcing its leadership in cloud services and positioning it to capture secular growth opportunities tied to AI adoption.
In its most recent quarter, Amazon exceeded both revenue and earnings estimates, underscoring the strength of its diversified model. Retail margins are improving, logistics efficiency is rising, and advertising revenues are accelerating.
Shares currently trade at about 33 times forward earnings with projected earnings growth above 17 per cent, a valuation that reflects Amazon’s dominant market position and powerful growth drivers. With leadership across e-commerce, cloud computing, and advertising, Amazon is positioned for sustained revenue expansion, rising profitability, and significant long-term shareholder value creation.
Cardinal Health (CAH NYSE)
Cardinal Health is a leading global distributor of pharmaceuticals and medical products, serving hospitals, pharmacies, and healthcare providers across the United States and worldwide. Its unmatched scale, extensive product portfolio, and disciplined cost management underpin steady revenue growth and margin expansion. Fiscal 2026 revenue is projected to approach US$250 billion, supported by resilient demand for essential healthcare products and the company’s consistent execution.
The company continues to benefit from powerful demographic tailwinds, particularly an aging population that is driving higher prescription drug usage and greater overall healthcare utilization.
Recent quarterly earnings have exceeded expectations, underscoring Cardinal’s ability to deliver improved profitability and operational discipline. Shares currently trade at roughly 16 times forward earnings with an expected growth rate of about 13 per cent, offering investors an attractive balance of value and growth relative to broader market peers.
Another key strength is the industry’s concentrated structure, where just three companies control roughly 90 per cent of U.S. pharmaceutical distribution. This limited competition creates high barriers to entry and supports the durability of Cardinal’s market position. In addition, Cardinal’s low-beta profile provides stability in volatile markets, making the stock appealing for investors seeking steady returns.
Longer term, the company is well positioned to capture structural growth from rising healthcare demand, industry consolidation, and new partnerships, while ongoing investments in technology-enabled logistics enhance efficiency and service capabilities. Supported by these durable trends, Cardinal Health is poised to generate consistent earnings growth, rising free cash flow, and meaningful long-term shareholder value.
DoorDash (DASH NASD)
DoorDash is the clear market leader in U.S. food delivery, commanding roughly 65 per cent of industry share, while expanding internationally and extending its platform into convenience, grocery, and retail categories. The company is also a leader in the on-demand economy, powering digital convenience and last-mile logistics as consumers increasingly outsource everyday needs.
Its strong brand recognition, unmatched logistics capabilities, and scale advantages underpin continued revenue growth and market share gains. Fiscal 2026 revenue is projected to reach nearly US$16 billion, supported by rising order volumes, deeper merchant relationships, and higher-margin opportunities in advertising and subscription services.
The platform has become essential for both consumers and merchants, with adoption steadily growing and merchants increasingly relying on DoorDash to generate incremental sales. Advertising and DashPass subscriptions are expanding margins and creating predictable recurring revenue, while operational efficiencies are improving unit economics. Shares trade at valuation levels that reflect DoorDash’s leadership position, supported by expectations of sustained double-digit revenue growth and an earnings growth rate forecast of about 25 per cent, highlighting a clear path toward durable profitability.
Consumer adoption of app-based delivery continues to rise, creating powerful secular tailwinds that reinforce DoorDash’s market leadership. Investments in new verticals, last-mile logistics, and international expansion strengthen its competitive moat, ensuring the company remains the leading force in on-demand delivery.
With strong growth drivers, improving financial performance, and a unique role at the intersection of digital convenience and logistics, DoorDash is well positioned to deliver meaningful long-term shareholder value.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| AMZN NASD | Y | Y | Y |
| CAH NYSE | Y | Y | Y |
| DASH NASD | Y | Y | Y |
PAST PICKS: SEPTEMBER 4, 2024
ALPHABET (GOOGL NASD)
Then: US$162.08
Now: US$227.27
Return: 40%
Total Return: 41%
LENNOX (LII NYSE)
Then: US$595.91
Now: US$559.83
Return: -6%
Total Return: -5%
ISHARES CORE S&P MID-CAP ETF (IJH NYSE)
Then: US$61.97
Now: US$65.01
Return: 5%
Total Return: 6%
Total Return Average: 14%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| GOOGL NASD | Y | Y | Y |
| LII NYSE | Y | Y | Y |
| IJH NYSE | Y | Y | Y |
