Investor enthusiasm for artificial intelligence is being tested as several high-profile technology companies face harsh market reactions despite relatively modest earnings disappointments. At the same time, investors are weighing signs of a cooling U.S. labour market and shifting capital into other sectors.
BNN Bloomberg spoke with Andrew Pyle, senior investment advisor and portfolio manager at CIBC Wood Gundy, who discussed the implications of the S&P’s decision not to fast-track major IPOs into its indices, the evolving outlook for AI-related stocks, and why jobless claims may be a key indicator to watch through the summer.
Key Takeaways
- The S&P’s decision not to fast-track major IPOs into its indices may help prevent distortions and reduce forced buying by passive investment funds.
- Recent reactions to Broadcom and CrowdStrike results suggest investor expectations for AI-related companies have become increasingly demanding.
- The pullback in technology shares appears to be driving sector rotation rather than a broad retreat from equities.
- Rising U.S. jobless claims could signal labour market weakness ahead, even as payroll data remains relatively strong.
- Higher energy prices and persistent inflation pressures remain important risks that may not be fully reflected in current asset prices.
Read the full transcript below:
LINDSAY: The S&P is not fast-tracking big IPOs like SpaceX into its indices. It’s bringing up questions of whether the rules need to be rewritten. Here to talk about that and more is Andrew Pyle, senior investment advisor and portfolio manager at CIBC Wood Gundy. It’s great to have you join us. Thanks so much.
ANDREW: Great to be here, Lindsay.
LINDSAY: What do you make of this, this new kind of regulation, I guess, from some of these indices?
ANDREW: Well, I think it’s great news for investors. I think it’s good to see that we still have adults in the room when it comes to the most important benchmark stock index in the world. The fact that we’re not going to fast-track some of these mega-cap companies with IPOs like we’re doing on the Nasdaq, I think that’s good news for investors. I think it takes away some of the concern, Lindsay, that some would have had that perhaps this was going to lead to distortions in the index, would lead to active and passive managers reallocating to get these new positions into the portfolios, into the indices. So I think it’s good news. I think it’s a bit of a curveball for some, but I think it’s good news at the end of the day.
LINDSAY: We’re obviously watching for a number of big IPOs, including SpaceX, Anthropic, OpenAI. Is there any one you’re watching in particular in terms of how it moves the markets and affects things once that IPO is actually launched?
ANDREW: Well, I think we’re going to watch all of them because, obviously, we have seen situations in the past where a stock has been very much anticipated — think back to Facebook in 2012 — only to see the stock really not perform afterwards. So I think there’s going to be a ton of focus on SpaceX, a ton of focus on Anthropic, and this comes at a time when the market is starting to lose some momentum. We’ve seen a massive upsurge in markets up until this week, and that momentum, if it continues to fade, could actually speak to how successful these IPOs will be when they come through.
LINDSAY: Okay, I want to get a broader sense of the markets now in terms of what we’re seeing today, but also you say there were two notable cracks this week that might portend what’s in store for us as we wrap up the first half of this year. Explain what you mean by that. What were those two notable cracks that you saw?
ANDREW: Well, I think one crack was the results we saw from Broadcom in terms of disappointing results for the last quarter. Obviously, the stock is taking a beating in the pre-open, and I think, again, it’s just a little bit of a warning sign with respect to the AI trade that this thing cannot continue at this pace forever. It’s not to say the AI trade is going to go away, but I think that’s one potential crack in the landscape, Lindsay. The other crack was really what we saw in the jobless claims numbers yesterday. Now, of course, we had a report this morning on U.S. jobs that was absolutely fantastic, well beyond economists’ expectations, but still pretty much a lagging indicator. The claims data is going to give us a better view to what we expect on the labour market side as we work our way through June, July and August, and I think that’s a potential crack in the labour force. Again, that’s a very difficult comment for me to make this morning, obviously after these headlines, but it is something that we need to watch.
LINDSAY: Interesting. You’ve also, we saw some results come out over the last couple of days, yesterday in particular, for Broadcom and CrowdStrike, those two companies coming in below estimates. We saw markets reacting to that. I wonder, what is the market sentiment, do you think, right now on AI?
ANDREW: I think generally the market sentiment is still positive, and let’s put this into perspective. Even with the pullback that we’re seeing in Broadcom right now, Lindsay, this stock is still up more than 42 per cent from the lows that we saw simply weeks ago. So this is still a stock that has been on a tear, and some will actually look at this perhaps as a healthy pullback. We can’t see the market continue to run at this pace forever. It’s healthy to see these stocks and these markets pull back, and maybe that’s all this is, but we have to see other companies come forward to see if this was a one-off or if this is more systemic as we work our way through the third quarter.
LINDSAY: Right. I was going to ask that, right, like, is this — I was going to ask if this is a one-off, and I take your point that we need to see more companies and see market reaction to see whether it actually is. But was this just kind of a bit of a blip in the market rather than more of a correction when it comes to what we’re seeing with tech stocks moving forward, do you think?
ANDREW: Hard to say whether it’s a blip or not. I think what I would say is that the expectations have been set extremely high, right, and we go through these cycles where markets will set the bar low, making sure that we see results that come in that might be exactly what we saw for Broadcom actually move the markets higher. Today, I would argue the markets are setting this bar extremely high for companies, and therefore when you get a company like Broadcom that, you know, this really, at the end of the day, if you look at the report, was not a lousy report, it just simply was not what the markets wanted, and the markets are punishing it. I think every single company that comes out with results that are marginal will probably see this type of reaction by the Street. The question mark for us, Lindsay, is whether those reactions accumulate to the point where we actually create a trend for this market that is counter to the trend that we’ve seen in the last several weeks. Again, I’m not going to go out on a limb right now and say we’ve seen the top of this market, but I do think these results are interesting in how market psychology is going to shift and where that expectations bar is set.
LINDSAY: Where do you think we’re going to see — because you’ve mentioned that there’s a bit of a rotation to non-tech in the market right now. Where else are investors looking, or where do you think is a good place for investors to look?
ANDREW: Well, I mean, for the answer to that question, we just have to look kind of to what’s happening in the Middle East, and what is not happening in the Middle East is a resolution to a war that has put considerable strain on supply chains and obviously upward pressure on energy. I keep going back to this point that back in December, when we were kind of figuring out where do we think the S&P 500 or the TSX will be at the end of 2026, we were dealing with oil prices in the $50 to $60 range, which today, if I were to say that’s what we’re going to have next week, that would be an extremely bullish comment to make, but that’s not the reality. So I think our shift right now is to look at the macro fundamentals, how much inflation and how much demand destruction is going to take place, and I would say the markets today are not fully accounting for that demand destruction.
LINDSAY: Before we wrap up here, I wanted to ask you about Lululemon because we’re following that stock pretty closely today. That company’s stock price sinking in the premarket after cutting its annual forecast, its latest results coming out not looking exceptionally good for Lululemon. What were your key takeaways so far from what you’ve heard from that company?
ANDREW: Well, it’s kind of like a labour report, Lindsay. This is a lagging indicator. These results are basically showing us what this company was doing under the previous management. Now that management is gone, right, we have a new CEO coming into Lululemon, and I think what most analysts will tell you this morning is, with these results now in place, this company is going to be headed for a major reset under the new leadership, and the jury’s going to be out. We’re not going to buy Lululemon because of faith. We’re going to buy Lululemon if we see new management execute a reset that actually puts this company on a different course, and that’s not going to happen tomorrow morning, it’s not going to happen next week, but I do think these results also have to be treated as a lagging indicator for this company, particularly.
LINDSAY: And Lululemon also said that, you know, the drama that it’s seen with its founder, Chip Wilson, weighed on that earnings report. There is an end to that proxy battle, it seems, between the company and Chip Wilson. Do you think that will improve things as well moving forward, or is that not as big of a factor as the company is saying it is?
ANDREW: I think everything’s marginal at this point, Lindsay. Right? So every piece of news, every development for this company that is positive at the margin is going to be beneficial to the stock price going forward. Again, it’s going to take a while for these marginal incremental developments for the company to start to accumulate to a point where we can say this company is on a different path right now. So, again, we’ll have to wait and see. I don’t think investors are going to rush in and buy this as a massive opportunity, but I think they’re going to watch the leadership in terms of what happens, and if the leadership does not do a reset on this company, the stock price outlook is not going to be great.
LINDSAY: Okay, Andrew Pyle, senior investment advisor and portfolio manager at CIBC Wood Gundy. Always good to have you join us. Thanks so much.
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This BNN Bloomberg summary and transcript of the June 5, 2026 interview with Andrew Pyle 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.
