Brendan Caldwell’s Top Picks for March 25, 2026

Brendan Caldwell, President & CEO, Caldwell Investment Management

Focus: North American large caps

Top Picks: Amphenol, Howmet Aerospace, Alphabet

MARKET OUTLOOK:

Equity markets move through 2026 with a constructive but more volatile backdrop following a strong 2025.

Global growth remains resilient, supported by last year’s rate cuts, fiscal support, and continued capital spending tied to artificial intelligence (AI) and other productivity-enhancing investment.

The near-term backdrop has become less straightforward, however, as higher energy prices and geopolitical tensions have increased inflation uncertainty and complicated the path for monetary policy.

Both the U.S. Federal Reserve and the Bank of Canada held rates unchanged recently, reflecting a more cautious, data-dependent stance. Corporate fundamentals remain generally healthy. Earnings growth is expected to be the primary driver of equity returns, particularly as valuations in several markets remain elevated and leave less room for multiple expansion.

Market leadership has also broadened beyond a narrow group of mega-cap stocks, with improving participation across sectors tied to capital investment, industrial activity, and productivity gains. Structural investment themes, particularly around AI, data infrastructure, and electrification, continue to support medium-term growth and capital spending, while also increasing sensitivity to any earnings shortfalls or delays in execution.

In Canada, market performance has been supported by firm commodity prices, with strength in banks, gold, and energy helping offset a softer domestic economy. Risks remain, as sticky inflation, slower growth, geopolitical tensions, and policy uncertainty could all contribute to higher volatility.

In this environment, we remain focused on high-quality companies with strong earnings power, disciplined capital allocation, and proven ability to navigate volatility, which we believe are best positioned to deliver sustainable returns.

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TOP PICKS:

Amphenol (APH NYSE)

What they do?

• Leading global manufacturer of high-tech interconnect, sensor, and antenna solutions.
• Their products digitize physical phenomena (e.g. sense an overheating battery, medical equipment, etc.), and enable power delivery and machine-to-machine communication.
• End markets across military, commercial aerospace, industrial, mobile networks/devices, automotive and information technology (IT) data communications.

Why we like them?

• Gross domestic product plus organic growth: driven by the secular “electrification of everything” trend across all end markets.
• Data centre buildout beneficiary: Amphenol’s high-speed copper and fiber interconnects are seeing record demand and content gains in the dana center end market supporting growth durability.
• Decentralized poster-child: 140 plus autonomous business units allows the company to maintain startup-like speed and deep customer relationships while leveraging the scale and capital of a global leader. This has led to remarkable margin stability through the cycle.
• Industry roll-up: a proven “buy-and-build” strategy consistently expands the company’s total addressable market and technological moat. Recent acquisitions bolster the company’s fibre optic capabilities allowing them to capitalize on the data center boom

Howmet Aerospace (HWM NYSE)

• Provider of advanced products for aerospace, defense, commercial transportation and power end markets.
• Benefiting from rising aerospace original equipment manufacturer (OEM) (Boeing/Airbus) production rates after a multi-year period of supply chain challenges and inventory destocking headwinds.
• This sets the company up for durable growth over the mid-to-long term supported by significant OEM backlogs.
• Very robust spares/aftermarket parts growth driven by aging aircraft fleet; Believe spare growth will remain strong given time lag between current OEM production ramp and fleet retirements.
• Datacenter and power grid expansion benefactor through their Industrial gas turbine business; one of three major global suppliers with capacity spoken for well into the late 2020’s.
• Despite deemphasizing margin expansion in the NT/MT, areas of opportunity come from:
• High incremental margins
• Recent manufacturing footprint and product rationalization efforts
• Improved profitability as new facilities ramp

Alphabet (GOOGL NASD)

• Only AI company with full vertical stack; they own both the frontier model, AI hardware and distribution at scale.
• Custom hardware drives cost advantages, helping customers improve their return on invested capital (ROIC) and positions Alphabet for share gains in cloud.
• Continued growth acceleration in GCP with upside to cons numbers driven by:
• Significant growth in backlog (US$155 billion) and number of US$1 billion plus deals.
• Growing Gemini API usage on shift from training to inference.
• Continued Google Cloud Platform margin improvement.
• AI results net positive for search, potential customers spending longer time on site and converting at higher rates.

PAST PICKS: APRIL 3, 2025

Cboe Global Markets (CBOE US)

Then: US$225.80

Now: US$281.29

Return: 25%

Total Return: 26%

Amazon.com (AMZN NASD)

Then: US$178.41

Now: US$212.21

Return: 19%

Total Return: 19%

Costco (COST NASD)

Then: US$967.08

Now: US$972.66

Return: 0.57%

Total Return: 1%

Total Return Average: 15%