More than $100 trillion in global assets walked into a Toronto hotel last week. Nearly $500 billion in Canadian investment and financing commitments came out.
That was the headline from the Canada Investment Summit, where Prime Minister Mark Carney brought together investors from nearly 30 countries alongside banks, pension funds, businesses and governments.
Carney’s pitch was difficult to misunderstand: “Canada is building big. Build with us.”
For investors, however, the interesting question isn’t how impressive $500 billion looks in a press release. It’s where that money could eventually produce earnings.
Source: Getty Images
The giant number
Nearly $325 billion came from Canadian bank financing commitments. Institutional investors committed almost $100 billion, while investment managers pledged another $14 billion.
Carney summed up the new approval goal with six words: “One project. One review. One year.” Blackstone president Jon Gray called Canada “a bit of a sleeping giant economically.” The best news? These three TSX stocks could benefit if it finally wakes up.
BCE
BCE (TSX: BCE) delivered one of the summit’s largest corporate announcements. Bell’s expanded Saskatchewan AI Fabric could eventually become a 1.2-gigawatt AI infrastructure hub representing up to $52.5 billion of capital investment.
The project remains phased and depends on customer commitments, approvals and additional power generation, so investors shouldn’t pencil $52.5 billion directly into tomorrow’s revenue. Still, Bell is making a dramatic pivot toward Canadian AI infrastructure.
Second-quarter revenue rose 1.5%, adjusted earnings per share increased 3.2%, and operating cash flow climbed 11%. Free cash flow fell as Bell spent more heavily on AI data centres and fibre. At around $31, BCE trades for roughly 12 times forward earnings and yields about 5.7%. Debt and massive capital requirements remain the obvious risks. Yet investors are paying a fairly modest valuation for one of Canada’s boldest AI infrastructure bets.
CPKC
A trillion-dollar investment cycle requires plenty of stuff moving around. Canadian Pacific Kansas City (TSX: CP) operates the only railway connecting Canada, the United States and Mexico on a single network. New mines mean more minerals. More factories mean more industrial freight. Growing ports and agricultural exports mean more goods needing somewhere to go.
Then there’s the Productivity Mega Deduction. Rail infrastructure specifically qualifies for expanded immediate tax deductions, which could make CPKC’s Canadian capital spending more attractive. What’s more, the underlying business already looks healthy.
Second-quarter revenue jumped 13% to $4.2 billion, while core adjusted earnings per share (EPS) climbed 13% to $1.27. Shares recently traded around $122, or roughly 22 times forward earnings. That’s not cheap, and trade disputes could hurt freight volumes. Yet CPKC provides a wonderfully boring way to profit if Canada actually builds everything it keeps announcing. Somebody still has to move it.
Cameco
Finally, all those AI data centres, mines and factories require an uncomfortable quantity of electricity. Carney wants Canada to expand uranium production and build more nuclear power as part of becoming an energy superpower. That points directly toward Cameco (TSX: CCO).
Cameco doesn’t merely mine uranium. It also operates fuel-services businesses and owns a major stake in Westinghouse, giving it exposure across much of the nuclear value chain.
The company still expects attributable uranium production of 19.5 million to 21.5 million pounds this year. First-half uranium adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $676 million. The problem is valuation. Around $128, Cameco trades near 67 times forward earnings. Nuclear excitement has clearly not gone unnoticed.
Bottom line
Canada’s summit produced plenty of promises. BCE could provide the AI infrastructure. CPKC can move the products created by the buildout. Cameco can help provide the electricity needed to keep it running.
Now investors get to watch whether $500 billion of announcements becomes something considerably more valuable: cash flow.
