Sipu Jha
As artificial intelligence (AI) continues to shake up global stock markets, investors are increasingly looking to Canada, a report has said, adding that the country’s main stock index – the Toronto Stock Exchange (TSX) – has emerged as a safe haven for investors that have been impacted by the AI-driven selloff hitting American markets.According to a report by news agency Reuters, the shares of software and technology companies are considered vulnerable to being replaced or disrupted by AI have been falling for months, dragging down major indices like the S&P 500. The Canadian market, on the other hand is dominated by banks, energy companies, miners, railways, and utilities – the kind of heavy, capital-intensive industries that are far less exposed to AI disruption. This comes as advanced AI tools like Claude caused investors to rethink the value of software companies, after one of its AI-powered solutions wiped trillions of dollars from software market – essentially ‘forcing’ investors to seek ‘shelter’ in a market defined by physical assets that a computer program cannot replace – like oil sands operation or a freight railway cannot be replaced with a chatbot.
The rise of the ‘HALO’ stocks
According to the report, the current trend is all about HALO, or Heavy Assets and Low Obsolescence, stocks. Essentially, these are businesses that own “stuff” in the real world. While the US S&P 500 is heavily weighted toward technology (only 16% HALO stocks), the TSX has 51% of its value tied to energy, metals, industrials and utilities.“The knock on the TSX forever has been that we don’t have enough tech… and that now is what everyone wants to buy,” Greg Taylor, Chief Investment Officer at PenderFund Capital Management, was quoted as saying. In 2025, the Toronto market climbed 28%, nearly doubling the 16% gain seen by the S&P 500. This outperformance is driven by two main factors. The first is safety from AI disruption, and the second is productivity boost due to AI as Canada’s big companies are using the technology to become more efficient. Citing Statistics Canada, the report said that foreign investment in Canadian stocks jumped to C$17.2 billion ($12.7 billion) in the final months of 2025, which is a 132% increase from the previous quarter. Sectors like energy have been risen 28% so far this year.
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