Pro Picks: 3 Durable Stock Picks
Investment Ideas from Peter Hofstra of CI Global Asset Management
Pro Picks: Low Volatility, High Conviction Ideas
In this episode of In the Money with Amber Kanwar, CI Global Asset Management’s Peter Hofstra shares why he believes the worst of tech sector volatility is behind us and why he remains optimistic on AI. He points to strong and steady spending in the space as a sign that fundamentals are intact, and explains why AI adoption is now a “use it or fall behind” moment for investors and businesses alike. While he uses puts to manage risk when valuations run high, Hofstra makes it clear: right now, he sees more opportunity than downside.
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1. Microsoft Corporation (MSFT)
AI Infrastructure Leader: Microsoft’s Azure platform hosts various AI models, including partnerships like Grok, ensuring revenue by renting compute power regardless of the AI software used.
Stable Competitor: A reliable player in corporate software (Office Suite, Teams, cybersecurity), Microsoft’s “good enough” solutions maintain a broad, loyal customer base.
Robust Financial Strategy: Microsoft is actively buying back stock and increasing dividends while investing heavily in infrastructure, supporting long-term value creation.
2. ServiceNow, Inc. (NOW)
Sticky Software Model: ServiceNow’s subscription-based IT solutions ensure customer retention, supporting a premium valuation and stable revenue.
AI-Enhanced Efficiency: Leveraging AI (10-15% of business) to boost productivity in corporate IT, ServiceNow is well-positioned to capture growing enterprise spending.
Future Mag 7 Potential: Strong management and an acquisition strategy enable ServiceNow to expand beyond its niche, with a trajectory to gain significant market share.
3. Thermo Fisher Scientific Inc. (TMO)
Healthcare R&D Bedrock: Thermo Fisher provides essential tools for drug discovery and personalized medicine, making it indispensable for medical research and innovation.
Undervalued Opportunity: Trading at multi-year lows due to temporary spending fears, the stock offers a buying opportunity as healthcare research demand is expected to rebound.
Long-Term Demand Drivers: Aging demographics and advancements in personalized medicine (e.g., DNA-based digital twins) ensure sustained need for Thermo Fisher’s tools.
