Market Outlook: AI execution is replacing infrastructure as investor focus shifts

The article reports that investors are shifting attention from AI infrastructure builders to companies demonstrably using AI to improve efficiency and earnings, and that smaller-cap firms are attracting renewed interest as markets seek clearer payoffs from heavy AI spending.

Investors and market commentators are observing a move from betting on large-scale AI infrastructure toward companies that apply AI to drive measurable efficiency and earnings gains. BNN Bloomberg spoke with Eric Jackson, founder and president of EMJ Capital, about this change in focus and where he sees opportunities across Canadian and U.S. stocks. The discussion highlights renewed interest in smaller and lesser-known companies as markets look for clearer returns on years of AI-related capital spending. Several sectors, including housing, energy and local platforms, were identified as areas where applied AI may produce visible benefits. Key developments: - Investor attention is shifting away from firms focused mainly on building AI infrastructure toward companies that can show concrete efficiency or earnings improvements from AI. - Smaller-cap and lesser-known companies are gaining renewed interest as markets seek clearer payoffs from past AI capital expenditure. - The article reports that AI applications in housing and real estate are improving pricing accuracy, risk management and operating efficiency, despite cautious sentiment in the sector. - The article mentions Opendoor as an example of a company applying AI to consumer real estate, with reported reductions in staff required to generate offers under a new CEO. - The article mentions Hut 8 as a firm that has diversified from bitcoin mining into AI data centre infrastructure, leveraging experience in power and computing. - The article mentions Nextdoor as a platform with a large verified user base that could use AI to improve local discovery and commerce. Summary: The article frames a market shift toward companies that can demonstrate practical AI payoffs, with attention moving to smaller firms and sector use cases in 2026. It says markets will be watching for evidence of AI-driven cost reductions and earnings improvement; the timing and scale of such results are undetermined at this time.