Stan Wong, Portfolio Manager at Scotia Wealth Management
Focus: North American Large Caps & ETFs
Top Picks: Alphabet, GE Vernova, iShares Core MSCI Emerging Markets ETF
MARKET OUTLOOK:
Markets staged a strong recovery from their March lows, with equities posting solid gains through April and May. However, June has brought renewed volatility, reminding investors that while the broader trend has improved, the path forward is unlikely to be a straight line. Some of the recent weakness likely reflects profit-taking following an overbought rebound, while renewed volatility suggests the market may be entering a normal and healthy period of consolidation.
The broader macro landscape remains constructive. Recent U.S. consumer data continues to point to resilience, while corporate fundamentals remain supportive.
Expectations for 2026 S&P 500 earnings growth have climbed to nearly 25 per cent, reinforcing the strength of the current earnings backdrop. That strength continues to be driven by investment in artificial intelligence (AI), digital infrastructure, electrification, and the capital spending cycle tied to nearshoring, reshoring, and supply-chain realignment.
However, the key risks remain clear: high energy prices, geopolitical uncertainty, sticky inflation, elevated bond yields, and the approaching U.S. midterm election cycle. Historically, midterm years have been more volatile, with the S&P 500 experiencing an average drawdown of roughly 17.5 per cent since 1950. Even so, money market fund assets remain near record levels, representing a significant pool of capital that could gradually rotate into risk assets.
At The Stan Wong Group, we continue to focus on high-quality large-cap equities, emphasizing durable cash flow, competitive advantages, and strong earnings growth within portfolios aligned with each client’s broader total wealth plan.
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TOP PICKS:
Alphabet (GOOGL NASDAQ)
Alphabet is one of the world’s dominant digital platforms, with leading positions in search, online advertising, cloud computing, and artificial intelligence. What makes the story increasingly compelling is that AI is no longer just a future promise for Alphabet; it is already helping drive stronger cloud growth, deeper user engagement, and broader monetization opportunities across its ecosystem. In its latest quarter, Google Cloud revenue rose 63 per cent to US$20 billion, highlighting how AI demand is already translating into meaningful commercial momentum. Overall, fiscal 2026 revenue is projected at over US$422 billion, reinforcing the scale of Alphabet’s business and monetization opportunities.
A key part of the investment case is the combination of a highly profitable core business and multiple AI-related growth drivers. Search and advertising remain enormously cash generative, while Google Cloud is emerging as a more important growth and margin contributor. Alphabet also benefits from its Gemini models, custom AI chips, and broad distribution across billions of users. Its ecosystem includes YouTube, Android, subscription products, and other consumer hardware products, which help deepen engagement and reinforce the reach of its platform. Alphabet now has 350 million paid subscriptions across YouTube, Google One, and other services.
The broader backdrop also remains highly supportive. Spending by the largest technology companies on AI infrastructure continues to rise rapidly, with combined outlays expected to surpass US$700 billion in 2026. That should continue to support cloud demand and Alphabet’s strategic positioning. In our view, Alphabet offers a compelling mix of durable cash flow, AI upside, and a valuation that still looks reasonable relative to its quality and long-term growth profile.
GE Vernova (GEV NYSE)
GE Vernova is a leading power and electrification company with major exposure to gas turbines, grid equipment, and other infrastructure that is becoming increasingly important as electricity demand rises. At a time when investors are looking beyond semiconductors to the physical systems needed to support AI growth, GE Vernova is emerging as one of the clearest beneficiaries. Fiscal 2026 revenue is expected to be over US$45 billion, giving it meaningful scale in one of the most important real-world infrastructure buildouts now underway.
What makes GE Vernova particularly compelling is its position at the intersection of power generation and grid infrastructure. The International Energy Agency (IEA) expects U.S. data centres to account for nearly half of electricity demand growth between now and 2030, reinforcing the need for more generation capacity, greater transmission investment, and additional grid equipment. GE Vernova’s backlog has grown to approximately US$163 billion, equivalent to nearly four years of revenue based on current 2026 sales expectations, which provides unusually strong visibility into future demand.
The operating backdrop also remains highly supportive. Demand for gas turbines and electrification equipment is being driven by AI-related data-centre expansion and broader grid investment, while management has raised both revenue and profit-margin guidance for 2026. A particularly compelling data point is that GE Vernova’s Electrification business booked US$2.4 billion of data-centre-related equipment orders in the latest quarter, more than in all of 2025. In our view, GE Vernova remains one of the most direct ways to invest in the power side of the AI and electrification buildout.
iShares Core MSCI Emerging Markets ETF (IEMG NYSE)
The iShares Core MSCI Emerging Markets ETF provides broad exposure to emerging-market equities across market capitalizations, offering investors a low-cost way to participate in long-term growth outside the developed world. The fund carries an expense ratio of just 0.09 per cent and holds more than 2,800 securities, making it an efficient vehicle for diversified emerging-markets exposure. For investors looking to add international diversification without taking single-country or single-stock risk, IEMG offers a straightforward and scalable solution.
What makes IEMG especially compelling is that it provides exposure to several of the most important growth markets and technology supply chains in the world through a single ETF. Its largest country exposures include Taiwan, South Korea, China, India, and Brazil, while top holdings include Taiwan Semiconductor, Samsung Electronics, SK hynix, Tencent, and Alibaba. This gives investors not only broad emerging-markets exposure, but also meaningful participation in semiconductors, digital platforms, and consumer growth across key developing markets.
The broader fundamental backdrop also remains favourable. The IMF expects emerging market and developing economies to grow 3.9 per cent in 2026, compared with 1.8 per cent for advanced economies, reinforcing the relative growth advantage of the asset class. IEMG has also broadly outperformed the S&P 500 Index since early 2025, reflecting improving earnings expectations and a better relative backdrop. Benefiting from favourable demographics, urbanization, and rising domestic consumption, this emerging markets ETF offers an appealing combination of improving earnings momentum, international diversification, and access to some of the world’s most important long-term growth markets, all through a low-cost and highly diversified vehicle.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| GOOGL NASDAQ | Y | Y | Y |
| GEV NYSE | Y | Y | Y |
| IEMG NYSE | Y | Y | Y |
PAST PICKS: JUNE 12, 2025
iShares Silver Bullion ETF (SVR TSX)
Then: $17.39
Now: $29.36
Return: 69%
Total Return: 69%
McKesson (MCK NYSE)
Then: US$730.80
Now: US$794.53
Return: 9%
Total Return: 9%
Nvidia (NVDA NASDAQ)
Then: US$145.00
Now: US$202.71
Return: 40%
Total Return: 40%
Total Return Average: 39%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| SVR TSX | Y | Y | Y |
| MCK NYSE | Y | Y | Y |
| NVDA NASDAQ | Y | Y | Y |
