BIP.UN - Q4 2025 Letter to Unitholders

BIP.UN - Q4 2025 Letter to Unitholders

Overview

2025 was another strong year for Brookfield Infrastructure. The business generated funds from operations (FFO) for the year of $3.32 per unit. Normalized for the impact of asset sales and foreign exchange, our per unit growth was 10%, in line with our target and reflective of our operational performance and the strength of our business. We executed on our strategic initiatives, generating record proceeds from asset sales to selffund our new investments that are expected to generate returns exceeding our targets.

Our key accomplishments for the year are summarized below:

• Achieved our capital recycling objective of $3 billion for 2025 and have already made progress towards 2026’s target of $3 billion.
• Invested approximately $2.2 billion of equity into growth initiatives, including $1.5 billion in five new investments diversified by sector and region.
• Executed agreements for several behind the meter (BTM) power projects totaling approximately 230 MW of capacity under our framework agreement to install up to 1 GW of power solutions to data centers and artificial intelligence (AI) factories.
• Took advantage of strong capital markets to complete $16 billion of financings.
• Ended the year with record liquidity totaling $6 billion, including just under $3 billion at the corporate level.

Supported by a conservative payout ratio of 66% and strong outlook for the business, the Board of Directors approved a quarterly distribution increase of 6% to $0.455 per unit during 2026, or $1.82 per unit on an annualized basis. This marks the 17th year of consecutive distribution increases of at least 5%.

Stock Market Performance

2025 was a solid year for our trading price in an environment that continued to be dominated by interest rate dynamics and shifting macroeconomic expectations. After two years of rapid monetary tightening, major central banks moved into a measured easing cycle. In the U.S., the Federal Reserve reduced policy rates three times during the year, supporting both “risk-on” assets and income-oriented equities.

Against this backdrop, our partnership units generated a mid-teen total return for 2025, broadly in line with leading global listed infrastructure indices. Our corporate shares performed particularly well, producing a high-teens total return over the same period and outperforming equity benchmarks. We believe the performance gap between our two securities primarily reflects differences in shareholder base and index inclusion, as well as tax preferences and relative trading liquidity. As a reminder, these securities are structured to be economically equivalent, providing exposure to a highly diversified portfolio of infrastructure assets.

While macroeconomic factors will always influence our trading price in the short term, we believe the market continues to underappreciate the resiliency of our business and the depth of our embedded growth potential. Over 60% of our FFO is generated by businesses at the center of the digitalization megatrend, including our data, midstream and utility platforms, and this exposure is increasing as we execute on a substantial backlog of organic growth projects and invest in the global megatrend to build the global backbone of AI.

Our focus remains on extending our track record of executing a full-cycle investment strategy: being disciplined in the acquisition of high quality assets, enhancing their value through operational improvements and crystalizing value by recycling capital into new opportunities at attractive returns. This approach has supported approximately mid-teens annualized total returns for our investors since inception. Over time, we are confident that the strength of our underlying business, our exposure to long-term themes and our commitment to growing the distribution by 5% to 9% annually will be reflected in our trading price.

Annualized Total Returns

As of December 31, 2025	1-Year	3-Year	Since Inception*
BIP (NYSE)	15%	9%	14%
BIP (TSX)	10%	10%	19%
BIPC (NYSE)	18%	10%	18%
BIPC (TSX)	13%	10%	15%
Alerian MLP Index	10%	20%	8%
S&P Utilities Index	16%	10%	8%
Dow Jones Global Infrastructure Index**	15%	12%	6%

Includes dividend reinvestment

*BIP (NYSE) and U.S. index data since January 2008; BIP (TSX) as of September 2009; BIPC as of spin-off on March 31, 2020

** DJBGICU Index and excludes dividend reinvestment

Operating Results

BIP generated FFO of $2.6 billion or $3.32 on a per unit basis in 2025. This was 10% above our normalized FFO and a 6% increase in total compared to 2024. Organic growth for the year was at the high end of our target range, driven by elevated levels of inflation in the countries where we operate, stronger volumes across our critical infrastructure networks and the commissioning of over $1.5 billion of new capital projects from our backlog. In addition, we completed over $1.1 billion of new acquisitions during 2025 that partially contributed to earnings, the impact of which was more than offset by earnings foregone from over $3 billion of asset sales completed during the year.

Utilities

The utilities segment generated FFO of $786 million, which on a comparable basis was up 7% year over year. The base business continued to perform well during the year, driven by inflation indexation across the portfolio and the contribution of approximately $500 million of capital commissioned into rate base over the last twelve months. Results also partially benefited from our acquisition of a South Korean industrial gas business that closed in December, and together with the strong base business performance, more than offset the loss of earnings from the sale of our Mexican regulated natural gas transmission pipelines.

Our U.K. regulated distribution business installed a record level of connections during 2025, up 14% from prior year, driven by strong performance across the majority of our utilities. Sales of new air and ground sourced heat products continues to build momentum, with approximately 9,500 sales during the year. This was triple the prior year and further strengthens the business’ value proposition to the market.

Our North American residential decarbonization platform continues to benefit from the implementation of AI within our call centers to drive margin improvements. For example, during the quarter, we deployed an AI solution that handles queries, reasons through complex billing scenarios, and integrates with the call center. This shift enables improved call response and resolution that previously required human escalation. This initiative among others to better utilize AI in our customer interactions has created approximately $10 million in annual value.

Transport

The transport segment generated FFO of $1.1 billion, which was in line with the prior year after normalizing for asset sales and foreign exchange. During the year, we completed capital recycling initiatives totaling approximately $1.8 billion of proceeds. The loss of earnings from these sales was partially offset by higher revenues across our transportation networks, particularly in our rail and toll road segments, where volumes and rates grew by an average of 2% and 3% respectively.

At our Brazilian toll road business, the regulatory environment is improving as the government looks to attract capital to an underinvested sector. As a result, we are in the process of renegotiating several of our toll road concession agreements. During the quarter, we extended the term on one concession agreement by 15 years to 2047, with higher tolls and shared transportation volume exposure. A separate toll concession was brought to auction and will result in the disposition of the concession to a new owner in the first half of this year, resulting in approximately $100 million of proceeds.

Our Australian rail network executed a commercial agreement with a new iron ore customer that commenced in November and has a planned ramp-up to 4.4 million tonnes per year in the first quarter of 2026. The contract backfills volumes from an expired agreement and is expected to contribute approximately $20 million in annual EBITDA over the multi-year contract period.

Midstream

The midstream segment generated FFO of $668 million, representing a 7% year over year increase. This growth reflects higher volumes and activity levels across our midstream assets, particularly at our Canadian natural gas gathering and processing operation and our recently acquired U.S. refined products pipeline system. This contribution more than offsets the loss of earnings from the sale of our U.S. gas pipeline.

Our Canadian diversified midstream business continues to see positive developments across its transportation segment, with the commissioning of a bolt-on pipeline project in the fourth quarter that will contribute approximately C$15 million of run-rate EBITDA. Combined with two other bolt-on projects commissioned earlier in the year, we expect to generate C$80 million in annual EBITDA at a weighted average build multiple of 4x.

Our U.S. refined products pipeline system achieved record utilization of 94% in 2025 due to the execution of operational initiatives, coupled with strong customer demand for our products. Under single ownership for the first time in the company’s history, we are advancing multiple strategic initiatives to optimize the business and generate meaningful value in the years ahead.

Data

The data segment generated FFO of $502 million, representing a step change increase of over 50% compared to the prior year period. The increase is attributable to several new investments completed over the last twelve months, the most recent being our U.S. bulk fiber network, which is now fully contributing to earnings. In addition, we achieved strong organic growth across our data storage business, which included the commissioning of 220 MW of capacity at our hyperscale data centers, 200 MW of new billings at our U.S. retail colocation data center operation and income generated by our global data center developers. Our platform now has development potential of approximately 3.6 GW, including 1.2 GW of operating capacity, a contracted project backlog of 1.1 GW, and a total land bank of 1.3 GW.

Our U.S. bulk fiber network continues to roll out its offering across the U.S., with over 50,000 units closed this quarter, bolstering its contracted backlog to nearly 320,000 units. Conversion of our contracted backlog to billable units is progressing well, with approximately 360,000 units billing at the end of the quarter, which is ahead of our plan.

Our U.S. fiber business is investing up to $300 million of equity to expand its open-access fiber infrastructure into several California markets that cover approximately 240,000 households. The business has been successful in executing construction on time and on budget across its initial markets in Colorado and Minnesota, with approximately 200,000 households passed out of a total of approximately 450,000 identified households.

Strategic Initiatives

Transaction activity accelerated in 2025, with $1.5 billion of new investments. We expect this momentum to carry into 2026 based on a robust pipeline of new investment opportunities that continues to be diversified across sectors and geographies./p>

During the quarter, we completed the inaugural project under the framework agreement with Bloom Energy, installing 55 MW of BTM power for a data center site in the U.S. We have since secured additional projects under the framework for several hyper-scaler customers, bringing the total to approximately 230 MW of power generation. These additional projects have contract terms of at least 15 years in length. BIP’s total equity investment associated with these projects to date is expected to be approximately $50 million, and fully deployed by mid-2027.

Also during the quarter, we closed the acquisition of a South Korean industrial gas business that is the leading supplier of industrial gases to investment grade semiconductor manufacturers in the country. The total equity purchase price is $500 million (BIP’s share – approximately $125 million).

On January 1, we closed the acquisition of a leading railcar leasing platform in partnership with GATX, a best-in-class railcar lessor. The business is highly cash-generative, providing stable cash flows that are supported by a diversified, and largely investment-grade, customer base. The total equity consideration is approximately $1.2 billion (BIP’s share – approximately $300 million).

Asset sales also accelerated in 2025. We achieved a record $3.1 billion in proceeds raised and we believe that the elevated pace of capital recycling will continue into the year ahead. We have two transactions already secured that crystallize attractive returns, giving us conviction in our ability to realize $3 billion of asset sale proceeds during 2026.

First, we agreed to sell the largest of four concessions within our Brazilian electricity transmission operation that spans over 1,200 kilometers. We expect proceeds of approximately $150 million net to BIP, generating an attractive IRR of 45% and an 8.5x multiple of capital, with closing anticipated in Q1 2026. Following this sale, we will have completed divestments of six of the nine concessions, with the remaining concessions expected to be sold this year.

Second, we partnered on a portfolio of stabilized and under-construction data centers in North America. Proceeds are expected to be used to support the build out of our powered land bank. An initial tranche of assets is expected to close this quarter, with the remaining under-construction projects expected to close on a programmatic basis upon completion over the next two years under a pre-agreed pricing framework.

Capital Markets and Balance Sheet

2025 was an active year for us in the capital markets. Despite periods of volatility, we maintained consistent access to capital. Over the year, we secured commitments totaling approximately $50 billion across our portfolio companies. During the quarter, the following notable initiatives were completed:

• At out U.S. semiconductor manufacturing facility, we took advantage of strong lender demand and attractive credit spreads to opportunistically issue approximately $1.8 billion of bonds. With this issuance, we fully refinanced the remaining bank facilities to establish a permanent capital structure comprised of long-term, fixed rate debt at attractive rates.
• Following the initial public offering of our North American gas storage business in October, we repriced its $1.2 billion term loan, tightening credit spreads by 50 basis points; combined with a 50 basis point tightening we completed earlier this year, we expect to achieve annual interest savings of over $12 million.
• At our U.S. retail colocation data center business, we successfully raised $1.1 billion of investment grade asset-backed securities to fully repay the acquisition credit facility and finance the purchase of a portfolio of data centers across North America. In addition, at our U.S. hyperscale data center business, we successfully raised approximately $325 million of investment grade asset-backed securities to fund contracted growth.
• Within our European telecom towers operation, we completed $5.7 billion in new financings, including a record $2.9 billion investment-grade private placement and a new $2.8 billion seven-year term loan at tighter spreads relative to in-place debt. Proceeds were used to partially repay existing credit facilities and return capital.

Our corporate balance sheet remains well capitalized. As a result of our proactive financing and risk management initiatives, our capital structure is more than 90% fixed rate, with an average term of eight years. Our maturity profile is well-laddered with approximately 5% of our non-recourse debt maturing in 2026 and no corporate debt maturities until 2027.

During the fourth quarter, we established an at the market equity program for BIPC and commenced share issuances under the program opportunistically. In total we raised approximately $40 million, issuing 833,000 shares to repurchase BIP units on a 1-for-1 basis.

Turning Tailwinds into Durable Value

AI is justifiably dominating headlines, with many bold predictions ranging from data centers in space to breakthroughs in quantum computing that could one day redefine how the world operates. At the same time, many are questioning the merits of the magnitude and velocity of capital flowing into AI, and whether demand will materialize at a level that justifies the spending, particularly given the perception of outsized risk associated with the ability to monetize AI.

The sheer scale of investment underway to build the physical backbone that makes AI possible is staggering. In 2025 alone, corporates invested approximately $500 billion, including more than $350 billion from five U.S.-based hyper-scalers, into AI-related infrastructure in the form of chips, servers, and data centers. Looking ahead, 2026 and 2027 capital investment is expected to rise further, with over $1 trillion of estimated capital spend identified.

Much of this buildout is fundamental to the development of AI, enabling power-intensive workloads to run reliably, securely, and at scale, in well-connected locations. That reality is driving a sustained wave of investment into the backbone infrastructure that enables AI, including data center capacity, grid resiliency, power generation and transmission. The sector remains exposed to overbuilding, technological change and disruption as large language models improve and compute requirements and capabilities evolve. With capital moving quickly, not all participants will be rewarded and there will be mistakes made.

Our approach is designed to protect against such exuberance. Brookfield Infrastructure is applying a prudent, risk-focused approach to participating in the build out of AI infrastructure, maintaining strict guardrails to safeguard capital while still allowing for meaningful upside in this multi-generational investment opportunity

• Contracted: Our development projects are underpinned by long-term contracts with favorable terms. We don’t build speculatively. We pursue land parcels collaboratively with customers, minimizing the drag on development returns as we contract before incurring significant capital spend. Furthermore, we structure our contracts with no cancellation for convenience clauses and a recovery of capital to earn attractive returns within the initial contract period, mitigating technology risk.
• Counterparties: We selectively focus on the strongest, investment-grade counterparties, who are some of the largest, well-capitalized and most profitable technology companies in the world. When deploying smaller workloads, we utilize prepayments and other financial assurances to protect our capital.
• Location: We concentrate on top-tier, workload-agnostic locations for our data centers that can support the full spectrum of demand, inference, content delivery, and cloud services. This reduces the risk of single-theme exposure and increases the durability of demand through cycles.
• Strategy: We are deliberate in how much land and powered shells we control and develop. At our two largest development platforms, we have created a self-funding model that provides funding for future development, returns capital and locks in attractive developer economics that enhance our investment returns. Importantly, it also reduces the size of our platforms while maintaining the benefits of scale and broadening the potential buyer universe at exit.
• Capital structure: We match capital structures to the tenor of contracted cash flows, with a focus on preserving flexibility and ensuring that we can finance growth responsibly. Our growth has been supported by strong and programmatic access to capital markets. Across our U.S. platforms alone, we successfully raised over $4 billion in the securitization market at attractive rates during 2025.

To illustrate the benefits of our approach, during 2025 we experienced exceptional demand at our data center platforms, securing record growth, commercialization, capital recycling, and capital markets activities. Several examples across our data center platforms include:

• Our U.S. colocation data center business has experienced 11 consecutive quarters of record bookings and is now fully utilized across several markets. During the quarter, we signed several large contracts at a data center site in Illinois, achieving 100% occupancy and adding approximately $45 million of annual EBITDA on a run-rate basis commencing later this year. Without investing any further equity, we acquired and added a 40-site data center portfolio in January 2024 to our existing business and subsequently increased EBITDA from a combined base of approximately $200 million to approximately $500 million on a contracted basis. The exciting part is that the growth trajectory is expected to continue, led by high-returning under-roof densification and in-footprint expansion capacity, which total over 600 MW of identified growth potential.
• Across our global data center platform, we achieved a significant lease-up of our land bank during the fourth quarter, which is expected to be commissioned over the next three years. We executed agreements for approximately 800 MW of capacity, predominately in North America. The vast majority of these leases are with investment-grade customers and underpinned by long-term contracts.
• Since acquiring our North American and European platforms, our adherence to the guardrails outlined above has allowed us to maintain a consistent greenfield data center yield-on-cost. In 2025, we partnered on almost 850 MW of stabilized and operating sites, crystalizing developer premiums and demonstrating strong demand.

Taken together, we hope these examples highlight both the strength of demand we are seeing and the importance of disciplined execution in converting demand into durable returns. As AI workloads scale, the value of well-located and powered infrastructure intensifies. In this environment, scale, reliability, and access to capital are differentiating factors to counterparties, and we believe our global operating capabilities and long-standing relationships benefit us. Our risk-focused approach and strict adherence to our guardrails will enable us to continue investing in the core infrastructure needed to deliver AI at scale while protecting our downside.

Outlook

Looking ahead to 2026, we see a highly constructive backdrop for infrastructure. The asset class has a long history of delivering resilient, growing cash flows through a variety of market environments and is now squarely positioned at the center of three powerful structural themes: digitalization, decarbonization and de-globalization. Together, these forces are driving an infrastructure investment super cycle that is broadening in both scope and scale. As investors continue to increase their allocations to the sector, we expect substantial capital to be deployed into the essential networks and assets that underpin the global economy.

We have entered 2026 from a position of considerable strength. Our base business is delivering resilient, growing cash flows, and we have clear visibility into a multi‑year runway of organic growth and capital deployment. In addition, the rapid build out of AI‑related infrastructure is materially expanding our opportunity set across data centers, power and network connectivity. As a scaled, global owner and operator of critical infrastructure, we are well-placed to deploy capital into these themes at attractive risk‑adjusted returns. These factors, combined with a stable interest rate and foreign exchange backdrop, position us well to return to our 10%+ per unit growth target in 2026.

Our proven capital recycling program gives us the flexibility to fully self-fund the growth we see ahead. With sale processes already launched across multiple segments and a deep pipeline of new investment opportunities, we are looking forward to what is shaping up to be an even more active year for our business.

On behalf of the Board and management, thank you to our unitholders and shareholders for their ongoing support.

Sincerely,

Sam Pollock
Chief Executive Officer
January 29, 2026

Michael Burry Is Probably Wrong About Timing - But Right About What Comes Next

Michael Burry Is Probably Wrong About Timing - But Right About What Comes Next

Jim Osman - Barchart - Sun Jan 25, 2:41PM CST 

When markets grind higher and volatility collapses, most investors start to believe risk has gone away. They measure portfolios by how much short-term pain they have avoided, not by how well they will compound over the next decade. That is exactly the moment when serious risk accumulates quietly and pain shows up later. I’ve heard the phrase ‘buy the dip’ way too often recently. 

That is where Michael Burry’s commentary fits in this environment. People fixate on his timing, as if predicting when prices will go down is the main skill. It is not. Timing is almost always unknowable. Markets stay irrational longer than anyone expects. Liquidity can overwhelm logic for years. But the setup he is talking about has merit because it is structural, not emotional.

When markets rise, most investors stop underwriting risk. They assume rising prices equal safety. That assumption makes the wrong things more expensive and the right things cheaper by default. Rising markets do not make businesses healthier; they make them appear healthier.

You can beat earnings expectations and still destroy value, and you can generate top-line growth and fail to create shareholder returns. Running a good P&L does not mean deploying capital well. Capital allocation becomes obvious in hindsight. That pattern has not changed, even if price charts look tidy.

Markets reward decisions, not stories. Currently, mechanical forces are driving prices more than business improvements. Passive flows, index rebalancing, and mandate-driven buying allow markets to rise without corresponding improvements in return on invested capital. That disconnect hides structural risk. Investors who focus on timing market peaks and troughs often miss the real source of future returns. Big moves in stock prices usually follow changes in capital allocation, not earnings beats. When management reassigns capital away from low-return uses into higher-return uses, that is where future returns begin. You can see earnings dictated by accounting changes. You cannot see capital discipline until it hits cash flows and balance sheets.

Part of what Burry is talking about is not valuation. It is capital inefficiency. Investors are wasting too much capital on low-return projects, dividend maintenance, acquisitions without return discipline, and buybacks executed at inflated prices. Rising markets tolerate these behaviors because the price disguises them. When liquidity tightens, those behaviors become obvious and painful. We are not there yet in price, but the structural tensions are already visible in cash deployment decisions. Markets do not break because earnings are bad. They break when capital is misallocated and liquidity is no longer there to mask it. The real risk today is that earnings are strong. The real risk is that capital allocation mistakes have become embedded in corporate strategy and will be revealed when conditions shift. This is why the ‘what next’ matters more than ‘when next.’ Reallocating capital into better opportunities is not timing. It is positioning. It is an exercise in judgment, not prediction.

The most obvious place to start looking for structural opportunity is where price action is detached from business reality because of mechanical selling and forced rebalancing. Spinoffs, breakups, and forced sellers create distorted prices. That distortion can last for a long time. Markets tend to treat these events as noise early on. They treat them as fundamentals later.

In a spinoff, price often falls not because the underlying business deteriorates, but because index funds must sell and institutions cannot hold outside their mandates. Liquidity dries up. Traders avoid names that are small or unloved. Meanwhile, the separated business often has clearer strategies, better aligned incentives, and a balance sheet that makes sense on its own. Fundamentals improve while price weakens. That is not a contradiction. It is the structure.  That is where averaging down makes sense. You are not buying because the stock is cheap. You are investing due to the strengthening of the business thesis and the price's disconnection from the cash-return profile. Time works for you because patience aligns with structure, not with sentiment.

That does not mean every spinoff works. It does not mean every structural shift creates value. Weak balance sheets, poor management discipline, debt dumps without strategic clarity, and the absence of a competitive moat all ruin otherwise promising setups. Structure is not a guarantee. It is an opportunity. What it means for investors right now is that focusing on timing and trying to predict when the broad market will peak is a distraction. The true concern lies in determining where investors are squandering capital and where they are applying it with discipline. Stocks with rising earnings but poor capital deployment are not safer than stocks with shaky earnings and excellent capital discipline. In many cases, the latter will outperform because capital is directed into higher-return uses.

This market is not yet a warning signal. It is a quietly tense one. Price is rising because of mechanical flows, not because fundamentals are uniformly improving. Liquidity still dominates sentiment. When that dynamic changes, price will follow. The point is not to guess when. The point is to be positioned where fundamental cash deployment tells you what will matter when price finally catches up.

Right now, the signal that matters is capital allocation. This is not to say that earnings are irrelevant. They are not. But they are backward-looking. Capital allocation is forward-looking. It tells you what happens next instead of what happened last quarter. Markets do not reward bravado. They reward correct positioning. Read the price, yes. But read capital decisions more closely.

On the date of publication, Jim Osman did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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Source

https://www.barchart.com/story/news/37220118/michael-burry-is-probably-wrong-about-timing-but-right-about-what-comes-next

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This summary of the Market Call featuring Javed Mirza (Quantitative/Technical Strategist at Raymond James)

This summary of the Market Call featuring Javed Mirza (Quantitative/Technical Strategist at Raymond James)

Someone on Youtube called Geunpie put together this incredible summary of the comments of Javed Mirza (Quantitative/Technical Strategist at Raymond James) who appeared on BNN-Blomberg's call in talk-show, Market Call on Thursday, January 22nd. It was so well done that I decided to post it here. I was unable to locate part 10, but I seemed able to get everything else. I found it all very insightful.

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This summary of the Market Call featuring Javed Mirza (Quantitative/Technical Strategist at Raymond James) is divided into 10 parts. Here is the first part focusing on the global macro outlook.

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Part 1: The "Boring Middle" and the Presidential Cycle

Summary: 

Javed Mirza introduces the concept of the "Boring Middle," a phase in the market cycle where leadership rotates away from the "Magnificent Seven" mega-cap tech stocks toward a broader expansion. He highlights that while the NASDAQ has struggled to break its November highs, the TSX and Russell 2000 are showing relative strength and breaking out to new highs [02:02]. Mirza also explains the U.S. Presidential Cycle, noting that the second year typically experiences seasonal weakness due to midterm uncertainty, whereas the third year often sees significant returns as policy clarity emerges [03:08]. 

Stocks & Indices Mentioned: 

TSX (Toronto Stock Exchange): Identified as a primary beneficiary of the current rotation [01:25]. Mag Seven: The seven largest U.S. tech stocks, which Mirza sees as a "source of funds" for other sectors [02:14]. Russell 2000 (IWM): Used as a benchmark for small-cap breakouts [01:47]. NASDAQ: Currently lagging behind the broader market breakout [02:02]. S&P 500: Forecasted for low double-digit returns this year [03:01]. Dow Jones Industrials & Transports: Both confirming the broader market's upward trend [01:54]. 

Further Insights: 

Mirza’s technical strategy focuses on Market Breadth. When the TSX outperforms the NASDAQ, it suggests a shift from "Growth" to "Value" and "Cyclicals." This is historically bullish for the Canadian market, which is heavily weighted in financials, energy, and industrials—the very sectors that thrive during the "Boring Middle" of a business cycle expansion. 

Fact Check: 

The Presidential Cycle: Historical data supports Mirza’s claim. Since 1950, the third year of a U.S. president's term has been the strongest on average (approx. 13.5% for the S&P 500), while the second year (midterms) often sees higher volatility and lower average returns (approx. 5.8%). 

Market Rotation: The "Magnificent Seven" (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla) dominated 2023 returns. A "rotation" into the S&P 500 Equal Weight or the Russell 2000 is a standard technical signal that a bull market is maturing and becoming healthier. 

Part 2: The Industrial Renaissance – Bombardier, WSP Global, and Stantec 

Summary: 

Mirza identifies Industrials as a leadership group in the current market rotation. He specifically highlights Bombardier as a standout performer that has undergone a significant structural turnaround. He notes that the stock has moved from a "deep value" play to a "momentum" name, consistently staying above its 200-day moving average. He also points to WSP Global and Stantec as "secular growth" stories within the industrial engineering space, benefiting from global infrastructure spending. 

Stocks Mentioned: 

Bombardier (BBD.B-T): Mirza notes its transition into a pure-play business jet company and its technical breakout from a multi-year base. WSP Global (WSP-T): Cited for its strong relative strength and ability to make new highs regardless of the macro environment. Stantec (STN-T): Mentioned as a peer to WSP that shows similar technical characteristics of a long-term uptrend. 

Further Insights: 

The "Relative Strength" (RS) line is a key tool Mirza uses here. For Bombardier, the RS line vs. the TSX has been trending upward for over 18 months, indicating that it isn't just rising with the market—it is beating it. He suggests that for industrial stocks like WSP, the "entry point" is often on small pullbacks to the 50-day moving average, as these stocks rarely provide deep discounts during a bull phase. 

Fact Check: 

Bombardier’s Turnaround: Mirza’s assessment aligns with financial data; Bombardier successfully offloaded its rail and commercial aviation divisions to focus on the high-margin Global and Challenger business jet lines, significantly improving its balance sheet and cash flow. Infrastructure Spending: The secular growth narrative for WSP and Stantec is supported by the U.S. Infrastructure Investment and Jobs Act and similar global initiatives, which have created a massive backlog of work for engineering and consulting firms. 

Part 3: Real Estate and REITs – Interest Rate Pivots and Inflation Hedges 

Summary: 

Mirza addresses a viewer's question about ZRE, noting that the Canadian real estate sector is hitting all-time highs but remains largely "under-discussed" [07:13]. His core thesis is that interest rates are shifting into a "choppy sideways" trading range rather than continuing to climb. This removes a significant headwind for REITs, which have been massive underperformers during the rate-hiking cycle [07:46]. He also advocates for REITs as a tactical tool to protect portfolios against persistent inflation [08:12].

Stocks Mentioned: 

ZRE (BMO Equal Weight REITs ETF): Mirza likes the technical breakout and the fact that "nobody is talking about them" [08:00]. Granite REIT (GRT.UN-T): Cited as one of his "best ideas" for industrial real estate exposure [08:33]. Dream Industrial REIT (DIR.UN-T): Highlighted as a top pick within the Raymond James research team [08:36]. ZEB (BMO Equal Weight Banks ETF): Mentioned briefly as a comparison for ETF structure [07:33]. Finning (FTT-T) & Toromont (TIH-T): Mentioned as industrial peers that Mirza remains bullish on alongside the REITs [06:43]. 

Further Insights: 

Mirza’s focus on Industrial REITs (Granite and Dream) is a continuation of his "Phase 2" expansion theme. While office and retail real estate face structural challenges, industrial properties (warehousing and logistics) are critical components of the supply chain that benefit from the broader economic expansion he forecasts through 2027. 

Fact Check: 

REITs and Inflation: Mirza is correct that REITs have historically acted as an inflation hedge. This is because many commercial leases include annual rent escalators tied to the Consumer Price Index (CPI), and the replacement cost of properties rises with inflation. Interest Rate Correlation: The inverse relationship between REITs and interest rates is well-documented. As rates stabilize (the "sideways" range Mirza mentions), the yield spread of REITs becomes more attractive to income-seeking investors compared to fixed-income assets.

Part 4: U.S. Mega-Cap Industrials – Honeywell and General Electric

Summary: 

Mirza analyzes Honeywell (HON) in response to a viewer question, describing it as a "sleeping giant" that is finally waking up. He explains that Honeywell spent nearly three years in a sideways consolidation pattern, which he views as a "massive base" for a future move higher. He notes that the stock is now showing positive relative strength against the S&P 500, a signal that institutional money is moving back into the name. He compares it to the recent performance of General Electric, which acted as a leading indicator for the industrial sector's revival. 

Stocks Mentioned: 

Honeywell (HON-Q): Identified as a technical "breakout" candidate from a multi-year range. General Electric (GE-N): Used as the benchmark for the "industrial renaissance" and a successful turnaround story. S&P 500 (SPY): Used to measure Honeywell's relative performance. 

Further Insights: 

Mirza uses the "Base-to-Height" principle here: the longer a stock consolidates (goes sideways), the more powerful the eventual breakout tends to be. Since Honeywell is a diversified industrial with heavy exposure to aerospace and automation, its technical breakout suggests a broader confidence in the "Boring Middle" expansion of the business cycle rather than just a niche tech rally. 

Fact Check: 

Honeywell’s Consolidation: Technically, HON traded in a range roughly between $170 and $220 for the better part of 2021 through late 2023. Mirza’s observation of a "multi-year base" is accurate. GE Performance: General Electric (now GE Aerospace) was indeed one of the top industrial performers in the 12 months leading up to this call, lending credence to Mirza's view that other legacy industrials like Honeywell often follow the leader. 

Part 5: Technology & The AI Pivot – Broadcom, Celestica, and the Mag Seven Pause

Summary: 

Mirza discusses the "exhaustion" signals appearing in the mega-cap tech space. While he remains long-term bullish on the AI theme, he notes that NVIDIA, Alphabet, and Microsoft are showing signs of a "mean-reversion" correction. He highlights Broadcom (AVGO) as a key indicator for the semiconductor space, noting its recent stock split and technical consolidation after a parabolic run. Conversely, he identifies Celestica (CLS) as a Canadian tech standout that has successfully pivoted into the AI infrastructure space, showing stronger "Relative Strength" than many of its U.S. counterparts. 

Stocks Mentioned: 

Broadcom (AVGO-Q): Viewed as a "best-in-class" semi-play that is currently digesting gains. Celestica (CLS-T): Cited for its massive technical breakout and role in the AI "pick and shovel" ecosystem. NVIDIA (NVDA-Q): Mirza cautions that the "momentum gap" between NVIDIA and its 200-day moving average is historically high, suggesting a cooling-off period. Alphabet (GOOGL-Q): Mentioned as a Mag Seven name that is entering a "sideways" phase. Microsoft (MSFT-Q): Noted for its stalling momentum despite strong fundamentals. 

Further Insights: 

Mirza’s "Phase 2" thesis suggests that while Tech led Phase 1 (The Recovery), it now acts as a "source of funds" for the broader market. He explains that institutional investors aren't necessarily "selling out" of tech, but rather "trimming" winners like NVIDIA to buy laggards in Industrials or Financials. For Celestica, he points out that its valuation multiple expansion is supported by the technical volume—indicating heavy institutional buying (accumulation). 

Fact Check: 

Broadcom Split: Broadcom executed a 10-for-1 stock split on July 15, 2024, just a week before this broadcast. Mirza’s observation of a "consolidation" phase post-split is a common technical phenomenon (sell-the-news). Celestica’s Pivot: Mirza is correct regarding Celestica's business model; the company shifted from consumer electronics to high-value "Connectivity & Cloud" solutions, becoming a primary partner for hyperscalers (like Google and Amazon) building out AI data centers.

Part 6: Basic Materials and Fertilizers – Nutrien and Mosaic 

Summary: 

Mirza pivots to the Basic Materials sector, which he classifies as a late-cycle beneficiary that often performs well during the "Boring Middle." He focuses on Nutrien (NTR), describing it as a classic "bottoming" candidate. After a steep decline from 2022 highs, Mirza points out that Nutrien has formed a multi-month base and is beginning to show positive divergence in its On-Balance Volume (OBV), suggesting that "smart money" is accumulating shares despite the flat price action. He also mentions Mosaic (MOS) as a U.S. alternative that is following a similar technical recovery path. 

Stocks Mentioned: 

Nutrien (NTR-T): Mirza notes its high dividend yield and technical support level near the $65–$70 CAD range. Mosaic (MOS-N): Identified as a peer in the fertilizer space with a high correlation to Nutrien's price moves. Teck Resources (TECK.B-T): Briefly mentioned as a representative of the broader materials sector showing resilience in a "sideways" market. 

Further Insights: 

Mirza emphasizes that Fertilizer stocks are highly cyclical and tied to crop prices (corn, soy, wheat). His bullishness is based on the "mean reversion" theory—when a sector has been hated for two years (as fertilizers have), it only needs a small catalyst (like stabilizing potash prices) to trigger a major technical breakout. He looks for a "weekly mechanical buy signal" (crossing of the 8-week and 21-week moving averages) to confirm the entry point. 

Fact Check: 

Nutrien’s Technicals: At the time of this video (July 2024), Nutrien was indeed trading near its 52-week lows, testing long-term support. The "positive divergence" in volume Mirza refers to is a standard technical lead indicator that often precedes a price trend change. Potash Market: The industry was emerging from a period of oversupply and price volatility following the initial 2022 shock. Mirza’s call for "stabilization" aligns with industry reports from late 2024 suggesting a balanced supply-demand outlook for 2025.

Part 7: Consumer Staples – Metro and Alimentation Couche-Tard 

Summary: 

Mirza identifies Consumer Staples as a defensive yet growing sector during the "Boring Middle" transition. He names Metro (MRU) as one of his Top Picks for the current cycle. He highlights that Metro has moved out of a multi-year consolidation and is now hitting new highs, supported by improving Relative Strength and institutional accumulation. He also reviews Alimentation Couche-Tard (ATD) as a "Past Pick," noting its steady 8% return since April and its technical resilience despite broader market volatility. 

Stocks Mentioned: 

Metro (MRU-T): Selected as a Top Pick for its breakout and strong volume signals. Alimentation Couche-Tard (ATD-T): A former pick that Mirza continues to monitor for its "secular compounder" status. Loblaw (L-T): Briefly mentioned as a peer that has led the sector, but Mirza prefers Metro’s current entry point. Empire Co. (EMP.A-T): Mentioned in the context of the grocery peer group. 

Further Insights: 

Mirza’s preference for Metro over Loblaw at this specific juncture is rooted in "Base-to-Height" technicals. While Loblaw has already had a significant run, Metro has just cleared its "bases," meaning it may have more "room to run" before becoming overbought. He views these companies as "all-weather" stocks that provide stability if the predicted August/September seasonal weakness occurs. 

Fact Check: 

Metro’s Performance: In July 2024, Metro’s stock price was indeed trending toward all-time highs, reflecting strong earnings and the "flight to safety" as investors rotated out of high-flying tech. Couche-Tard M&A: Mirza’s mention of ATD’s resilience is backed by its history of disciplined acquisitions. Around this time, Couche-Tard was making headlines for its massive potential bid for Seven & i Holdings (7-Eleven), which has since become a major focal point for the stock's valuation. 

Part 8: Utilities as "Bond Proxies" – Hydro One 

Summary: 

Mirza identifies Hydro One (H-T) as a Top Pick, classifying it as a premier "bond proxy." He explains that while utilities are typically sensitive to rising interest rates, the current environment of stabilizing yields is allowing these stocks to break out to new all-time highs. He emphasizes that Hydro One is showing a "bullish consolidation" pattern, where the stock price has rested long enough to build the energy for its next leg up, supported by strong institutional buying. 

Stocks Mentioned: 

Hydro One (H-T): Highlighted for its low volatility and new price highs. Fortis (FTS-T) & Emera (EMA-T): Mentioned as peers in the utility sector that often move in tandem with bond yields. Vanguard Total Stock Market ETF (VTI): Used as a benchmark for general market direction and seasonality. 

Further Insights: 

Mirza’s focus on Hydro One is a "low-beta" strategy. In a "Boring Middle" phase, investors often look for "quality" and "safety" to offset the volatility of growth stocks like the Mag Seven. From a technical standpoint, Hydro One’s On-Balance Volume (OBV) has been trending upward even during flat price periods, which Mirza interprets as a signal that major funds are quietly adding to their positions. 

Fact Check: 

Regulated Earnings: Hydro One is a regulated utility, meaning its rates and returns are largely set by the Ontario Energy Board. This creates the highly predictable cash flow that Mirza’s "bond proxy" thesis relies on. Interest Rate Sensitivity: Traditionally, when the 10-year Treasury yield rises, utility stocks fall (as their dividends become less attractive relative to "risk-free" bonds). Mirza’s observation that they are rising despite recent rate levels suggests a market shift toward defensive growth rather than just yield-chasing.

Part 9: Real Estate Top Pick – Choice Properties REIT (CHP.UN) 

Summary: 

Mirza rounds out his Top Picks with Choice Properties REIT (CHP.UN), which he views as a high-quality defensive play within the real estate sector. He highlights that the stock has been consolidating for a long period and is now showing signs of a "technical bottom." He points to the improving Relative Strength versus the TSX and increasing trading volume as indicators that institutional investors are moving back into the name to capture its yield and potential for capital appreciation as interest rates stabilize. 

Stocks Mentioned: 

Choice Properties REIT (CHP.UN-T): Mirza’s final Top Pick, chosen for its strong technical support and "base-building" phase. Loblaw (L-T): Mentioned as the "parent" and primary tenant of Choice Properties, providing the REIT with a highly stable and creditworthy income stream. RioCan REIT (REI.UN-T): Briefly contrasted as another retail-heavy REIT, though Mirza prefers the specific technical setup of Choice. 

Further Insights: 

Mirza’s interest in Choice Properties is deeply tied to its relationship with Loblaw. Since Choice owns the vast majority of the real estate where Loblaw stores operate, it has one of the highest occupancy rates in the industry. Technically, Mirza looks for a breakout above the $14.00 CAD level to confirm that the "sideways" period is over. He views this as a "total return" play: you get paid a reliable distribution while waiting for the price to revert to its historical highs. 

Fact Check: 

Occupancy and Tenants: Choice Properties is indeed Canada’s largest REIT, and its occupancy rate is consistently above 97%, primarily because its anchor tenant (Loblaw) is an essential-service provider. Technical Consolidation: In mid-2024, CHP.UN was trading in a tight range between $12.50 and $13.80. Mirza’s call for a "breakout" was timely, as the sector began to rally in late summer 2024 on expectations of Bank of Canada rate cuts.

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Source

https://www.youtube.com/watch?v=TiDyN--SSFo

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Postscript

And a big thanks to Geunpie whoever you may be...