AI Is Reshaping Every Industry: Why XEQT Investors Don't Need to Pick the Winners

My buddy Chris cornered me at a barbecue last month with a question I have been hearing a lot lately. He had his phone out, showing me a chart of NVIDIA’s stock price. “Dude,” he said, “AI is going to change everything. I need to be in NVIDIA. I need to be in the companies building this stuff. Should I sell my XEQT and go all in?”

I asked him one question: “Which AI companies will be the biggest winners ten years from now?”

He paused. “Well… NVIDIA. Probably Microsoft. Maybe some of the chip companies.”

“You said ‘probably’ and ‘maybe.’ That is the entire problem.”

Chris is not wrong that AI is transforming the global economy. He is absolutely right about that. What he is wrong about is the assumption that knowing a revolution is happening means you can predict who wins. History tells us the opposite. And if you hold XEQT, you do not have to predict anything at all.

1. The AI Revolution Is Real – But Nobody Knows Who Wins

Let me be clear about something: I am not dismissing AI. Artificial intelligence is arguably the most significant technological shift since the internet, and possibly since the industrial revolution. It is already transforming how businesses operate, how decisions get made, and how value is created across virtually every sector of the economy.

But here is what technology revolutions teach us, over and over again: the magnitude of the change is predictable. The winners are not.

In 1999, everyone knew the internet was going to change everything. They were right. But the biggest internet companies of 1999 – AOL, Yahoo, Excite, AltaVista, Pets.com – are mostly gone. The actual winners were a two-person Stanford research project (Google) and an online bookstore that everyone thought was overvalued (Amazon). Some of the biggest beneficiaries were companies that did not even exist yet.

The same pattern played out with:

• Smartphones: In 2007, Nokia was the world’s largest phone maker. Blackberry dominated business users. Neither survived the transition. Apple was a computer company. Samsung was known for TVs and refrigerators.
• Social media: MySpace was the dominant platform in 2007. Facebook was a college-only network. TikTok did not exist. Twitter (now X) seemed like a joke.
• Electric vehicles: In 2010, the “obvious” EV winner was not obvious at all. Traditional automakers were supposed to crush upstarts like Tesla. That is not what happened.

The lesson is not that technology revolutions are fake. They are very real. The lesson is that picking the winners in advance is nearly impossible, even for experts.

2. How AI Is Transforming Every Sector

To understand why this matters for your portfolio, look at how broad AI’s reach actually is. This is not a technology that affects one industry. It is reshaping all of them.

Here is what that table tells you: there is no sector that AI will not touch. That means the winners could come from anywhere. The company that benefits most from AI might be a healthcare firm that uses it to cut drug development costs by 80%. Or a logistics company that uses it to optimize global supply chains. Or a financial institution that builds an AI-powered lending platform that dominates a market.

You do not know. I do not know. Nobody does. And that is exactly why owning the entire market through XEQT is such a powerful strategy right now.

3. The Dot-Com Lesson: Why Picking Technology Winners Is Harder Than You Think

Let me take you back to March 2000. The NASDAQ was at an all-time high. Technology companies were the obvious future. Everyone “knew” that the internet was going to change everything (they were right), and so they piled into the companies they thought would lead that revolution.

Here is a table that should make you uncomfortable if you are thinking about going all-in on AI stocks:

The dot-com crash did not happen because the internet was fake. It happened because investors were right about the technology but wrong about the companies. The same risk exists today with AI.

NVIDIA might be the next Amazon (painful drawdown but eventual dominance). Or it might be the next Cisco (dominant position today, irrelevant tomorrow). The honest answer is that nobody knows.

4. How XEQT Automatically Adjusts to AI Winners

Here is the part of this story that makes me sleep well at night.

XEQT uses market cap weighting. That means the companies in your portfolio are weighted by their total market value. As a company grows, it automatically becomes a larger portion of your portfolio. As a company shrinks, it automatically becomes a smaller portion.

This is not a feature. It is a superpower.

Think about what this means in the context of AI:

• If NVIDIA turns out to be the dominant AI platform for the next 20 years, its market cap will grow, and it will automatically become a larger portion of your XEQT holdings. You do not have to do anything.
• If some company you have never heard of – maybe a Canadian startup, maybe a European firm, maybe a Chinese tech giant – becomes the next big AI winner, it will enter the indexes that XEQT tracks and grow in your portfolio automatically. You do not have to pick it.
• If a current tech giant stumbles because it bet on the wrong AI strategy, it will shrink in your portfolio automatically. You do not have to sell it.

Market cap weighting is an automatic winner-picker. It does not care about your predictions, your hunches, or your uncle’s hot tip. It follows the money. And over time, the money flows to the companies that actually deliver value.

The Magnificent Seven – Apple, Microsoft, NVIDIA, Amazon, Alphabet, Meta, and Tesla – currently make up a significant portion of XEQT’s holdings because they are among the most valuable companies on earth. If AI creates a new group of dominant companies, those companies will rise in the index and the old guard will fall. Your portfolio adjusts without you lifting a finger.

5. The “Picks and Shovels” Myth: Why Even the Obvious Bets Are Risky

There is a popular investing narrative that goes like this: “During the Gold Rush, the people who got rich were not the miners – they were the ones selling picks and shovels. So buy the picks-and-shovels companies of AI: NVIDIA, TSMC, the cloud providers.”

It sounds clever. It is also dangerously oversimplified.

First, let us deal with the historical accuracy: the picks-and-shovels story is partly true, but it ignores the fact that most picks-and-shovels companies during the actual Gold Rush also went bankrupt. The survivors are what we remember. That is survivorship bias in action.

Second, the “obvious” picks-and-shovels companies in AI come with their own serious risks:

• Valuation risk: NVIDIA trades at a massive premium to its earnings. If AI adoption slows even slightly, or if competition emerges, the stock could drop 40-60% in months – even if the company is still growing.
• Competition risk: Every major tech company is developing its own AI chips. Google has TPUs. Amazon has Trainium and Inferentia. Apple, Microsoft, and Meta are all building custom silicon. NVIDIA’s dominance is not guaranteed.
• Concentration risk: Putting 20% or 30% of your portfolio into a single stock – even a great one – violates the most basic principle of portfolio construction. If you own XEQT, you already own NVIDIA in the appropriate, market-cap-weighted proportion.
• Regulatory risk: Governments around the world are starting to regulate AI. Export controls on chips, data privacy laws, and antitrust actions could reshape the competitive landscape in ways nobody can predict.

The picks-and-shovels strategy sounds smart, but it is still stock picking with extra steps. And the data is clear: stock picking underperforms indexing for the vast majority of investors over the long term.

6. Your Career vs. Your Portfolio: The Hidden AI Diversification Play

Here is an angle that almost nobody talks about: your career is an asset, and AI affects it too.

Financial planners call this human capital – the present value of all your future earnings. For most working-age Canadians, human capital is their single largest asset. It dwarfs their investment portfolio.

If you work in financial services, for example, your career earnings are heavily tied to the health of the financial sector. If AI disrupts that sector – automating analysis, replacing advisors, restructuring lending – your income could be affected. Your job might change. Your earning power might shrink.

Now think about what happens if your investment portfolio is also concentrated in financial stocks or AI stocks related to your industry. Both your income and your investments are exposed to the same risk. That is the opposite of diversification.

XEQT fixes this. Because it owns every sector across 49 countries, your investment portfolio is not correlated with any single industry. If AI disrupts your sector and your income takes a hit, the rest of the global economy – healthcare, energy, consumer goods, emerging markets – continues to grow in your portfolio.

This is especially relevant in 2026 as AI is visibly reshaping Canadian industries:

• Banking: AI is automating loan underwriting, fraud detection, and customer service at the Big Five
• Energy: AI-driven exploration and production optimization is changing the oil patch
• Mining: Autonomous vehicles and AI-guided drilling are transforming Canadian mining
• Professional services: Legal AI tools and accounting automation are affecting professional firms
• Government: Federal and provincial governments are deploying AI in service delivery

If you work in any of these sectors, your human capital is already concentrated there. Your portfolio should not be.

7. What About AI-Specific ETFs? XEQT vs. Thematic AI Funds

If you want targeted AI exposure, there are thematic ETFs that focus specifically on artificial intelligence and robotics companies. Should you buy those instead of (or alongside) XEQT?

The data says no.

The fundamental problem with thematic ETFs is that they tend to attract investors after the theme has already been priced in. By the time “AI ETFs” are marketed to retail investors, the underlying stocks are already trading at premium valuations. You are buying the hype, not the opportunity.

For a deeper look at why broad indexing beats narrow themes, check out our comparison of XEQT vs. thematic ETFs.

8. The Canadian Angle: How AI Affects Canada’s Economy Specifically

XEQT gives you roughly 25% exposure to Canadian stocks. And AI is reshaping some of Canada’s most important sectors in ways that are worth understanding.

Canadian banks and financial services make up a huge portion of the Canadian market. The Big Five banks are spending billions on AI – for fraud detection, credit scoring, customer service chatbots, and trading algorithms. This could mean higher profits and efficiency gains. Or it could mean massive disruption if fintech competitors (using the same AI tools but without legacy infrastructure) take market share.

Energy and resources are also being transformed. AI-guided exploration is making it cheaper to find and extract oil, gas, and minerals. Predictive maintenance is reducing downtime. But AI is also accelerating the renewable energy transition, which could hurt traditional energy companies.

Shopify – one of Canada’s largest tech companies – is deeply investing in AI for e-commerce: AI-generated product descriptions, automated customer service, and intelligent inventory management. Whether Shopify wins this race or gets outcompeted by larger players matters a lot for the Canadian index.

The point is that even within Canada’s economy, the AI impact is complex, multi-directional, and unpredictable. Owning the entire Canadian market through XEQT (which holds the iShares S&P/TSX Capped Composite Index ETF as one of its four underlying funds) means you are exposed to whichever Canadian companies navigate AI successfully.

9. What History Teaches Us About Technology Revolutions and Investing

Let me zoom out and look at the big picture. Every major technology revolution follows a similar pattern:

Phase 1: Excitement. A new technology captures the public imagination. Everyone agrees it will change the world. Stock prices of related companies soar.

Phase 2: Overvaluation. Investors pile in, driving prices far above what fundamentals justify. New companies are created specifically to capitalize on the hype. Valuations detach from reality.

Phase 3: Correction. Reality catches up. Many companies fail. Stock prices crash – even for some companies that are genuinely good businesses. This is where most stock pickers get destroyed.

Phase 4: True transformation. The technology actually does change the world, but the winners are often different from what people expected. The real value creation happens over decades, not quarters.

We saw this with railroads (1840s-1890s), electricity (1890s-1920s), automobiles (1900s-1930s), computers (1960s-1990s), the internet (1990s-2010s), and smartphones (2007-present).

We are somewhere in Phase 1 or Phase 2 of the AI revolution. The technology is real. The opportunity is massive. But the specific companies that will dominate in 2036 or 2046 are not knowable today.

The only strategy that captures 100% of the winners across all technology revolutions is owning the entire market. That is what XEQT does. It owned the internet winners. It owned the smartphone winners. And it will own the AI winners – whoever they turn out to be.

10. What to Do Right Now: The XEQT Investor’s AI Playbook

If you already own XEQT, your AI playbook is beautifully simple:

1. Keep buying XEQT. Your regular contributions – whether through auto-invest or manual purchases – are already buying you exposure to every AI company worth owning, at its market-cap-weighted proportion.

2. Do not sell XEQT to chase AI stocks. Concentrating your portfolio into a handful of AI names is taking a massive, unnecessary risk. You already own NVIDIA, Microsoft, Google, and every other AI company through XEQT.

3. Do not panic-sell sectors you think AI will disrupt. If you own XEQT, you do not own individual sectors. You own everything. If banks decline, tech grows. If traditional retail shrinks, e-commerce expands. The index adjusts.

4. Invest in your own AI skills. The best AI investment you can make might not be in the stock market at all. It might be learning how to use AI tools in your own career. Increasing your human capital – your earning power – gives you more money to invest in XEQT.

5. Ignore the noise. Every week, someone will tell you about the next AI stock that is going to change everything. Some of them will be right. Most of them will be wrong. And you cannot tell the difference in advance. Let the market sort it out while you stay the course.

The AI revolution is real. It will create trillions of dollars in value. And as an XEQT investor, you will capture your fair share of that value without having to predict which companies, sectors, or countries come out on top.

That is not a boring strategy. That is the smartest one.

Related Reading

• XEQT Sector Breakdown: Industries and Allocation
• XEQT Market Cap Weighting Explained
• XEQT vs. Thematic ETFs: Why Broad Beats Narrow
• Survivorship Bias and XEQT Investing
• Magnificent 7 Concentration Risk and XEQT Diversification
• XEQT Geographic Diversification: Why Your Money Spans 49 Countries
• Human Capital and Career Investing
• Single Stock Risk and Diversification