Review of 2025 and What to Expect in 2026

2025 was far from peaceful, marked by ongoing war between Russia and Ukraine and trade wars initiated by America that disrupted countries, industries and companies worldwide. After months of negotiations, several nations reached an agreement with the U.S. government, setting a minimum tariff rate of 15%. In Canada, many firms remain temporarily shielded under the USMCA (United States–Mexico–Canada Agreement). Still, the steel and lumber sectors have suffered sharp sales declines while the auto industry has seen jobs and plants migrate south. The new government, led by Carney, pledged to diversify trade partnerships and strengthen interprovincial commerce—though any benefits will take years to materialize. On a brighter note, Canada’s unemployment rate fell from 7.1% in September to 6.5% in November, aided by four interest rate cuts in 2025.

Despite tariff-related concerns, global economies and corporate earnings held up well. Artificial intelligence (AI) continued to permeate daily life, from chatbots like ChatGPT to self-driving technology and advanced analytics. Investment in AI infrastructure surged, with countries such as Saudi Arabia aggressively building data centers to expand computing capacity. While consumer spending remained cautious, business capital expenditures and government spending (especially commitments to defense) offset much of the weakness.

Nvidia, now the world’s largest company by market capitalization, reported extraordinary revenue and earnings growth, with 2026 guidance exceeding expectations. Yet this sparked debate: have customers overinvested in AI and could this trend be a bubble? The scale of capital commitments is unprecedented, with global AI infrastructure spending projected at roughly $500 billion annually through 2030. Tech giants—Microsoft, Alphabet, Meta and Amazon—have been behaving almost like utility companies, generating resilient income across crises such as COVID and high interest rates. Unlike utilities, however, they maintain massive cash reserves, making them both unique and attractive. Still, investors worry that balance sheet strength could erode if AI demand falters or monetization lags behind spending. For now, demand appears robust: ChatGPT has reached 800 million active users, while its enterprise version, Copilot, is expanding rapidly. Businesses are eager to integrate AI into workflows and design, with Palantir, Salesforce and Amazon AWS all reporting demand outpacing supply. Full self-driving, following a few updates, is closer to perfection and development of humanoid robots is leaping forward. Even with heavy investment, most leading firms remain net cash positive and capable of taking setbacks.

Innovation inevitably carries risk, but confidence in human ingenuity remains strong. Given the productivity gains and transformative potential of AI, optimism prevails. Unlike the dot-com era’s hollow ventures such as pets.com, today’s leaders are real businesses with products, customers and cash flow. The year 2026 will be pivotal in determining whether this surge in AI investment represents sustainable growth with actual customers and sales—or the makings of a bubble.

On the other extreme, gold—an asset with no inherent productivity—has seen surging demand, with prices climbing from $2,625 to $4,239 per ounce (Nov 2025). Because gold generates no earnings and has limited commercial use beyond jewelry, its fair value is difficult to assess and price volatility remains high. Central banks, particularly in China and Russia, have been active buyers as they diversify their foreign reserves. It is estimated that the value of gold above ground is now worth almost $30 trillion. This raises the question: is gold’s rally yet another bubble that few are willing to acknowledge?

As we look ahead, 2026 promises to be another dynamic year as we balance opportunities with the risks of potential bubbles.

About the Author

Alfred Lam, MBA, CFA

Alfred Lam, Senior Vice President, Co-Head of Multi-Asset, joined CI GAM in 2004. He brings over 23 years of industry experience to his portfolio design, asset allocation, portfolio construction, and risk management responsibilities, which include chairing the multi-asset investment management committee and sizing investment bets to drive added value and manage risk. Alfred holds the CFA designation and an MBA from York University Schulich School of Business. He is a recognized leader in multi-asset investing in Canada. During his tenure, his team has won multiple investment awards, including the Morningstar Best Fund of Funds, and saw assets growing four-fold.