Wealthsimple

November 2, 2026

20th Century Studios

In This Issue

8 min read

AI earnings came in soft, and the markets hit back hard

Plus!

Binance’s ignominious mark

Toy-crazy “kidults”

The Idea of the Week

How Apple avoided getting smoked

by Peter Arkle

We’ll sort through the wreckage of last week’s big AI sell-off down below, but let’s flip the script and start with the one Magnificent 7 tech titan that didn’t get poleaxed: Apple, which dipped a bit on Friday but still managed to eke out a gain for the week. Apple was the valuation king until the AI boom began, but the Cupertino juggernaut mostly sat out the arms race, letting competitors spend trillions and then just licensing their models for its hardware. For a while there, investors chided the decision and punished the stock. Well, now Apple is the antidote to all their AI overreach fears: it keeps on vacuuming up cash while its rivals are burning through it, and AI is a complement to its business, not the bedrock. Good luck finding a better symbol for this moment in the AI economy than Apple leapfrogging Nvidia on Friday to reclaim the throne as the world’s most-valuable company. Will this dynamic persist if the AI sell-off turns into a crash that hobbles the economy? Hard to say — you still need an income to buy an iPhone.

TSX: -0.7% (+12% YTD)

S&P 500: -0.8% (+10.2% YTD)

What Happened Last Week

AI Correction 2026!

OK, let’s talk about the bonkers late-week sell-off. First, the damage report: tech stocks got creamed, with the Nasdaq 100 at one point falling 4% on Friday, before finishing the day -3.5%. That’s on par with sell-offs following the outbreak of the Iran war and 2025’s Liberation Day freakout, and it left the tech-heavy index briefly in correction territory (a 10% drop from its recent high).

Google, the hardest hit of the Magnificent 7, shed nearly half a trillion dollars in value as its shares plunged a boulder-like 13%, with investors fretting that its AI search summaries are eroding its core ad business. Chip stocks shared in the pain, giving up more than 8% on Friday. But the real star of The AI Meltdown Show was Intel, which ended Friday -29% — its worst day since the 1970s — erasing US$140 billion in value.

What triggered all this pain? The basic story is familiar: investors worry that Big Tech is spending much more than it earns and is taking on Everest-size debt loads to fund AI data centres, with few signs that its multitrillion-dollar investment will pay off soon. Investors increasingly view Altman, Pichai, Zuck, et al., as a gang of mad kings and have grown weary of hearing “trust me” from them about AI. And investors are very reluctant to lend these CEOs more money until AI delivers fatter profits.

Then earnings rolled in last week, and investors turned ruthless in a hurry when tech profit growth was projected to slow to 65% from nearly 77% the previous quarter. Cue Friday’s sell-off:

Not Jerome Powell. "Buy the dip - With what?"

The curious thing, as Random Walk’s Moses Sternstein observed, is how decidedly non-disastrous this earnings season has been. Tech profits are still way up from a year ago, and 82% of S&P 500 companies that have reported so far have beaten expectations. Which in a normal universe would all be taken as very good news. But in our current priced-to-perfection AI reality, “good news is not good enough,” wrote Sternstein.

So what’s the upshot? Friday could mark the beginning of the end of the AI boom. Declining confidence in AI’s profitability could kick-start a self-reinforcing doom loop: falling stock prices make everyone feel poorer, spending declines, profits and stocks suffer further, etc. In that case, good luck building more data centres, tech CEOs!

In another far-less-bleak scenario, investors are simply trimming their AI expectations, taking profits after four go-go years, and rotating into other assets. They’re not discounting AI entirely. To paraphrase WSJ’s James Mackintosh, investors could reasonably believe that AI will radically transform the economy and that the AI trade has gotten overheated. To that point, Google’s tumble last week still leaves its stock up an incredible 188% (or 30% annualized) since the AI rally began in late 2022. Which is not what you’d see from a company built on sand.

Investors also don’t seem worried about AI contagion spreading into the broader market — at least not at the moment. The S&P 500 sans tech fell only 0.3% on Friday, leaving it down a mere 2% from its all-time high. About 45% of S&P 500 companies actually rallied. That likely wouldn’t be the case if investors expected an AI sell-off to spiral into a broad crisis. The light-on-tech TSX, down just 3% from its peak, bolsters the point.

The fog is thick. Charts are swirling. A punch in the jaw tends to produce panic. But it’ll take some time to know which of these narratives will win out.

—Jared Sullivan

The head-spinning news week also included…

… that Binance theft — the biggest crypto heist in history. Security experts believe North Korean hackers were behind last Thursday’s record-setting US$6.3 billion Binance theft, and an internal probe found they got in through a complex attack that included at least one unfortunate Binance employee's laptop. (Binance says it’s covered 90% of the losses so far.)

The Binance hack was 22x bigger than the biggest old-school bank heist to date. Last week, hackers allegedly linked to North Korea stole US$6.3 billion from Binance, the world’s largest crypto exchange.

… and that interest-rate hike — the BoC’s first in three years. Governor Tiff Macklem bumped rates to 2.5% and skipped the BoC-speak to say, outright, that the bank might hike ’em again next month to keep inflation tamed. Markets currently think rates will climb to 3.25% by next September.

Yet even more interesting news

Adults are taking toys from children. OK, technically they’re taking toy market share from children, but still: according to this hilarious New Yorker deep dive, adults now account for the majority of U.S. toy sales, and between June 2025 and June 2026, 65% of U.S. adults spent US$100 on toys for themselves. “Kidults,” as the toy industry has dubbed them, tend to collect toys rather than, you know, play with them, and it’s become a lucrative hobby:

Unopened LEGO sets are a “passion asset” that deliver an 11% average annual return!
Rare versions of plushie brand Jellycat are so valuable they’ve become a shoplifting target!
The market for “blind box” toys (e.g., Sonny Angels) is likely to grow to $9 billion by 2035!

Congrats, Cohere — you’re Canada’s most valuable private tech firm. Not that it’s a competition or anything, right? 😉 The AI firm’s latest $7B financing round (the biggest in Canadian history, by the way) pushed its valuation up to $35.7B. One unique element of the deal: Ottawa bought a hefty $1.6B stake as part of the funding round, which, The Globe and Mail points out, is pretty unusual (for now!) and requires, among other things, that Cohere keep its HQ in Canada.

—Jenna Benchetrit

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The FOMO Index

by Stacey Woods

Important

Study finds paper straws are worse for the planet than plastic ones. Unfortunately, the only thing keeping the world together is its hatred of paper straws.
Source

Users already reporting creases and cracks in the new iPhone Duo. We finally know the answer to the question, How does it actually fold?
Source

Canada, EU tinker with the definition of their situationship but keep standing promise to hang out if neither of them has a date for New Year’s Eve.
Source

Cheerios and Ziploc team up to put first sealable bag inside a cereal box. Man on the moon, Ziploc in cereal… Guess there’s nothing left to do.
Source

Crash & Burn

To the Moon

Self-improvement app RiseGuide is hiring a “Chief Small Talk Officer.” The ideal candidate will bore people enough to pull out their phones and open a self-improvement app.
Source

N.L.’s largest jail runs out of toothbrushes. And right before the Halloween candy drone drop!
Source

Bryan Adams follows up “51st State” with new song “Lake Ontario.” Look for upcoming release “The October 23 Presidential Proclamation Modifying Section 338 Tariffs on Canada.”
Source

Canadian becomes the first woman to cliff-dive off an iceberg. Too late, all of you who were just about to do that.
Source

Who Cares?

The Big Read

You Finally Got a Wikipedia Page. Then It Vanished 🌐

An elegy to the semi-celebs and notable achievers deemed not quite famous or notable enough to keep their page on the internet’s favourite encyclopedia. | WIRED*

*Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for.

Wisdom of X

if you lost money in one of the countless recent crypto hacks, there is no need to be sad, you'd have lost it trading anyway.

Thoughts on Today’s Issue?

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This week’s newsletter contributors: Brennan Doherty (writer), Devin Gordon (writer), Stacey Woods (writer), Jenna Benchetrit (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Maude Campbell (copy editor), Sara Black McCulloch (fact checker), Eva Grace Clement Cruz (specialist, product engagement), Lauren Edwards (production coordinator), Matthew Karasz (markets editor), Jared Sullivan (editorial lead), Peter Martin (senior editor), and Devin Friedman (editor-in-chief).

Total returns shown in local currency, via TradingView.

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😬 So about that sell-off…