Justin Elliott, portfolio manager at Caldwell Investment Management, joins BNN Bloomberg to discuss the markets as well as to share his 2026 stock picks.
Geopolitical uncertainty and concentration in a small group of large technology stocks continue to shape investor sentiment, but artificial intelligence remains a key area of conviction for some equity investors. As AI adoption expands across consumer and enterprise use cases, productivity gains could support broader participation beyond last year’s winners.
BNN Bloomberg spoke with Justin Elliott, portfolio manager at Caldwell Investment Management, about why he remains bullish on the AI trade, how GPU constraints are reinforcing competitive advantages, and why he expects continued support for equities as AI moves deeper into real-world applications.
Key Takeaways
- AI-linked stocks have driven a disproportionate share of gains in recent years, but productivity benefits could increasingly extend beyond the largest technology names.
- Ongoing GPU shortages are limiting product releases and scaling, reinforcing sustained investment across both model developers and hyperscalers.
- The AI cycle is shifting from early hype toward practical utility, with stronger enterprise and consumer adoption supporting future growth.
- Leading AI platforms are strengthening competitive moats as rising model complexity makes it harder for new entrants to compete at scale.
- AI integration into core digital products is already improving engagement and conversion, supporting revenue growth without a matching rise in headcount.
Justin Elliott, portfolio manager at Caldwell Investment Management Justin Elliott, portfolio manager at Caldwell Investment Management
Read the full transcript below:
ANDREW: Okay, let’s get back to those AI stocks. There’s plenty of noise on the geopolitical front, but our guest says investors should stay focused on the AI trade, and he remains broadly bullish on equity markets this year. We’re joined by Justin Elliott, portfolio manager at Caldwell Investment Management. Justin, thanks very much indeed for joining us.
JUSTIN: Thanks for having me on.
ANDREW: You see enough evidence of growth in demand for AI to stay broadly bullish. For example, you’ve said companies using these chips say one of the big constraints is that they still can’t get enough of them.
JUSTIN: Yeah, that’s correct. Obviously, the AI bubble narrative is front and centre for a lot of investors, and there’s a lot of concern around rising capital expenditure intensity and the return on that capex spend. But we do align with the AI bull narrative, and our optimism around continued spending, acceleration and growth in the industry is backed by a few points. The first is that existential risk still remains. The most recent demonstration of that was when ChatGPT went to code red after Google’s Gemini 3 was released. Spending needs to be maintained to hold a leadership position at the frontier. The second point is bottlenecks, to your point, on both the large language model provider side and the hyperscaler side. For LLM providers, some of the leaders, such as ChatGPT, have talked about throttling product releases and not being able to release what they’d like due to a lack of GPUs. Sam Altman has said they could potentially double revenue if they had access to more GPUs. On the hyperscaler side, we’ve heard examples at Google of internal departments competing for access to GPUs. Researchers building the models want more access, while product and sales teams want GPUs to generate revenue. The last point is that more capable models should lead to more useful agents, which would drive increased enterprise and consumer use cases. Those are three key reasons why we remain bullish on this trade heading into the new year.
ANDREW: Right on topic, Alphabet is one of your stock picks. It’s a massive buyer of GPUs — graphical processing unit chips — that power AI computations. Google has had a strong run, but you see more upside.
JUSTIN: Yeah. Google is basically the only AI player with a full vertical stack. It owns and develops its frontier models, has custom hardware at scale and some of the best distribution. That’s a huge advantage across its product suite. We see Google leveraging that advantage to lower the cost of AI, which should entice customers to switch from other cloud providers to improve their return on invested capital. That should drive accelerating growth in Google Cloud and likely market share gains from competitors like Amazon and Microsoft. As that business scales, margins have already been improving. As Google releases new generations of models and chips that boost efficiency, that should translate into continued margin expansion. Finally, Google is integrating AI benefits into its core search business. AI can lead users to stay on pages longer and convert at higher rates, which allows Google to charge more for ads because they’re more effective. That should support continued growth in search.
ANDREW: You also have a tech-adjacent idea, Huron Consulting, HURN on Nasdaq. Remind us what they do.
JUSTIN: They’re a U.S.-based consulting firm primarily focused on education and health-care markets. They’re exposed to government and government-adjacent customers. A key secular tailwind is the changing regulatory environment in the United States. The passage of the “big, beautiful bill” last year put pressure on both health care and education. Hospitals, for example, have a renewed sense of urgency to improve operations, modernize and use tools like AI to improve revenues and reduce costs. There’s a similar dynamic in education. We’re seeing strong demand for their services, and given the urgency, engagement sizes have increased over the past few quarters. We think that’s promising for future growth as organizations rush to optimize operations.
ANDREW: And finally, InterDigital, IDCC. This is a major holder of intellectual property.
JUSTIN: That’s right. InterDigital develops patents used in standard technologies many people take for granted — 4G, 5G and eventually 6G, Wi-Fi and video codecs that compress file sizes for streaming. A major upcoming catalyst is litigation with Disney over streaming services. Many streamers have been using InterDigital’s patents without properly compensating the company. Courts have recently been ruling in InterDigital’s favour, which should push negotiations forward and set a precedent for other streaming services. That would drive higher recurring revenue at very high margins, since there’s minimal incremental cost to add new licensing deals. We see continued margin expansion, durable growth and an underfollowed business with a strong outlook.
ANDREW: Justin, thanks very much indeed.
JUSTIN: Thanks for having me on.
ANDREW: Justin Elliott, portfolio manager at Caldwell Investment Management.
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This BNN Bloomberg summary and transcript of the Jan. 8, 2026 interview with Justin Elliott 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.
