Tony Ciero’s Top Picks for August 1, 2025

Tony Ciero, Vice President & Senior Portfolio Manager, Caldwell Securities

Focus: North American large caps

Top picks: Berkshire Hathaway, Royal Bank, Amazon

MARKET OUTLOOK:

Despite improved equity market returns thus far in the third quarter, investor sentiment remains cautiously optimistic, with a primary focus on the ongoing global tariffs saga.

Tough to navigate with so many tariff deferrals, reversals, and limited visibility on final tariffs - Aug. 1 will be telling.

Recent Trade deals with Japan & European Union at 15 per cent has calmed investor nerves. For Canada, we believe both sides are trying to reach an agreement. Sentiment is almost like ‘just pick a number and be done with it’

Prime Minister Mark Carney can promote growth by eliminating inter-provincial trade barriers. In speaking with clients in other fields such as construction, they would benefit far more from relaxing trade barriers in Canada which can more than offset any damage caused by trade tariffs with the U.S.

In the U.S., the Federal Reserve rate decision remained unchanged. U.S. President Donald Trump wants rates to come down while Fed Chair Jerome Powell wants to hold steady given the overall economy strength and low unemployment rate, a drastic move either way can cause equity market uncertainty and heightened volatility

Also, big tech earnings (Microsoft / Meta / Apple / Amazon) have already reported. These earnings can dictate market sentiment

In Canada, high unemployment rate (approaching seven per cent) and a potential housing crises does not bold well, however internal growth can be spurred by eliminating and reducing inter-provincial trade barriers and promoting infrastructure projects.

If this were to occur, Canadian banks would be clear winners as they will provide the funding and underwriting for loans and credit.

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TOP PICKS:

Berkshire Hathaway (BRK.B NYSE)

Berkshire Hathaway has a diversified portfolio with both public and private companies

Berkshire holds anywhere between 30 to 40 per cent in private companies, Geico for example and Dairy Queen. It is a large share holder in Apple, American Express & Coca-Cola.

A large portion of investment portfolio invested in Artificial Intelligence. As of 2025, the company is poised to earn a staggering US$4.37 billion in annual dividend income, the result of decades of strategic capital allocation, brand loyalty, and long-term conviction

In May, Warren Buffett announced he will be stepping down as chairman by the end of the year. His successor Greg Abel, has been under Buffett’s tutelage since 2011.

Berkshire Hathaway shares have declined about 12 per cent since the announcement. It has a market cap of $1 Trillion and is a top 10 firm in the U.S.

Royal Bank (RY TSX)

Royal Bank is the largest company in Canada with a market cap of $250 billion. It has a strong history of consistent dividend growth. This is a ‘core’ hold in our clients’ investment portfolios.

RBC may be primed to do well going forward given the following reasons: Integration with HSBC Bank Canada/ revenue synergies still not fully priced in. Higher than expected loan loss provisions set aside for credit losses. Canadian Banks in general will reap the rewards of a ‘unified’ Canada.

Amazon.com (AMZN NASD)

Amazon is the largest e-commerce platform in the world with over 300 million users and average over a billion dollars in daily sales. They continue to expand their market place and product base.

It surpassed Walmart in quarterly revenues for first time in the fourth quarter and we believe it can over take Walmart in annual sales in 2025.

We like its cloud computing platform led by Amazon Web Services (AWS). We are paying close attention to its CAPEX spending and its commitments to AI infrastructure. They committed to a 100 billion spend in 2025.