Jamie Murray’s Top Picks for July 28, 2025

Jamie Murray, President, Murray Wealth Group

Focus: North American equities

Top picks: Broadcom, Qualcomm, Chemtrade Logistics

MARKET OUTLOOK:

We are believers in generative artificial intelligence (AI) and expect it will transform industries, leading to higher revenue, margins, and efficiency. Ongoing AI investments should accelerate through 2026 and it remains early for many enterprises that are still in discovery phase for what this means for their business and the opportunities available.

Companies that lean into AI will win and eat the lunch of less efficient companies. Thus, it makes sense that the market is trading at a 20+ price-earnings ratio (P/E) and the aggregate index will remain expensive even if the remaining equities face a tougher macro backdrop and lower multiples.

Inflation likely remains sticker in the face of higher U.S. deficits and stimulus from the recent tax bill.

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TOP PICKS:

Broadcom (AVGO NASD)

Broadcom is expected to grow revenue by 20 per cent per year over the next three years. The company is still early in a product cycle with more companies looking to Broadcom to design custom AI chips that offer better cost for performance vs. Nvidia GPUs. As well, the company sells the networking equipment needed to tie together large chip clusters to serve and deliver AI models.

Underpinning its revenue base is a high margin software business, that has grown quickly through acquisition and supports a higher multiple. The company spends US$10 billion on research and development (R&D) per year which is captured in profit and loss (P&L) but needs very low capex to grow its business. These support a premium P/E to the rest of Mag 7.

Qualcomm (QCOM NASD)

The smartphone chipmaker is diversifying and winning in new markets. As the Apple business is leaving for good, this is depressing profit growth through 2027. Underneath that, it has a strong performance in Android-based smartphones, setting up for next cycle.

Strong new markets are driving growth through 2030 as it doubles its automotive business which grew 67 per cent over the past year to $8 billion from $4 billion.

It has more than doubled its internet of things technology to $14 billion. This division makes laptops, data centre chips and augmented reality AR chips like on meta-ray ban glasses.

These revenue goals, if achieved, would lead to Qualcomm growing topline revenue close to eight per cent with margins expanding and an active buyback, leading to earnings per share (EPS) growth over 10 per cent plus a dividend. It trades at 12 times P/E.

Chemtrade Logistics (CHE-UN TSX)

Chemtrade is a North American diversified chemical company that is operating at a strong level under new CEO Scott Rook. The key to its growth is its water chemicals business, treating water from lakes and rivers for consumption and then wastewater treatment.

Chemtrade has invested heavily in higher margin products and gained market share. It also is a low-cost provider of sulfuric acid, regen acid and chlor-akali products owing to good hydroelectricity access used in various industrial processes from fracking, gas refining and semiconductor manufacturing.

The key to Chemtrade is its low valuation and capital return. Given the low multiple, we believe Chemtrade can return six per cent dividend plus a five per cent share buyback. This leaves upside for new growth expected from acquisitions and organic investments.

PAST PICKS: AUG. 27, 2024

Lululemon (LULU NASD)

Then: US$271.18

Now: US$217.80

Return: -20%

Total Return: -20%

Airbus SE (EADSY OTC)

Then: US$39.28

Now: US$52.03

Return: 32%

Total Return: 35%

Northwest Healthcare REIT (NWH-UN TSX)

Then: $5.22

Now: $4.81

Return: -8%

Total Return: -1%

Total Return Average: 5%