We’ve seen some major volatility start to build in certain pockets of the market. Various growth stocks that have tied themselves to what seemed to be rock-solid growth catalysts (such as AI, machine learning, quantum computing, and other hot areas of the market) have also seen serious volatility of late.
And while this trend appears to be reversing as I write this, with many top AI stocks surging on the back of strong results from Nvidia, I wouldn’t be surprised to see valuations be called into question in the months and quarters to come.
For those taking such a view, here are three Canadian stocks I think could be more defensive picks for investors looking to position their portfolio for some broader weakness in the tech sector in 2026.
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Suncor
The reality is that most oil and gas producers like Suncor (TSX: SU) are pretty detached from various tech-related trends we’re seeing play out in the market.
Now, energy production is very important to the overall economic growth story. And we’re going to need plenty of oil and gas moving forward to power our economy forward. Thus, the growth engine supporting this company and its sector more broadly is intact.
So, for those taking a long-term view and wanting to play broader economic growth in North America, Suncor is one of the top ways I’d play this trend. With solid upside and a current dividend yield of 3.8%, I think Suncor can provide high single-digit to double-digit annual total returns over the long haul. That’s good enough for me.
Toronto-Dominion Bank
One of Canada’s biggest and most influential banks, Toronto-Dominion Bank (TSX: TD) continues to be a top pick of mine in this sector.
As most investors may remember, past financial crises did not hit TD or other top Canadian bank stocks in the same way as they hit many U.S. and global lenders. The Canadian banking sector is about as robust as they come. Accordingly, for those looking to retain exposure to financials in this market, but do so in a defensive way, this is a top option to consider.
With a solid balance sheet and a current dividend yield of 3.7%, TD stock remains one of my top picks right now.
Alimentation Couche-Tard
For those who think commuting to work and road trips won’t completely halt come the next market downturn, Alimentation Couche-Tard (TSX: ATD) seems like a good place to hide out and wait for a market recovery.
This is another company I’d say has little exposure to the whole AI narrative. With a network of convenience stores and gas stations (more than 10,000 such locations around the world), Couche-Tard has transformed into a growth powerhouse, with its core driver being outside the tech sector.
Thus, for investors looking for exposure to a company with an impressive growth outlook that has nothing to do with AI, this is one place I’d wait out the next storm. If AI stocks drop, I think that won’t matter one bit for Couche-Tard and its future earnings reports (which I expect to show continued strength).
