Ryan Modesto, portfolio manager and CEO of i2i Capital Management, joins BNN Bloomberg to share his Hot Picks in U.S. mid-caps.

Artificial intelligence is driving demand for infrastructure, power and engineering services, creating investment opportunities beyond traditional tech companies. Some Canadian firms are positioned to benefit from this trend through indirect exposure.

BNN Bloomberg spoke with Ryan Modesto, CEO and portfolio manager at i2i Capital Management, about three Canadian companies he says are leveraging AI-driven demand across infrastructure, energy and engineering markets in North America.

Key TakeawaysAI infrastructure buildout is increasing demand for excavation, energy and engineering services across North America. Companies with high U.S. exposure are positioned to benefit from stronger infrastructure spending tied to AI growth. Power demand from data centres is creating new opportunities for independent energy producers. Engineering firms are gaining from increased investment in power and infrastructure linked to AI development. Risks include economic slowdown, reduced capital spending, project delays and execution challenges tied to acquisitions and expansionRyan Modesto, portfolio manager and CEO of i2i Capital Management Ryan Modesto, portfolio manager and CEO of i2i Capital Management

Read the full transcript below:

LINDSAY: It’s time for Hot Picks, and today we are zeroing in on three standout U.S. mid-caps. Our next guest has Badger Infrastructure as his top pick, an excavation services leader with operations across North America. Let’s get more now from Ryan Modesto, portfolio manager and CEO of i2i Capital Management. Ryan, it’s good to have you. Thanks so much for joining us.

RYAN: Thanks for having me. Let’s throw a little wrench into things here, too. We’re doing Canadian names that are under the radar in the AI space today.

LINDSAY: Okay, even better. So let’s start with the first one, Badger Infrastructure. What is it you like about that?

RYAN: Yeah, so Badger Infrastructure is a hydrovac company. If you’re looking for companies with exposure to AI, this is a company that benefits from the AI infrastructure buildout. The nice thing about this company is all of their fleet is on wheels, so they can move to wherever the demand is.

They’re seeing demand in the U.S. currently, and that’s where they’ve moved a lot of their fleet. About 88 per cent of their revenue comes from the U.S. side. So they’re already levered to strong growth there and to the infrastructure and AI buildout as well.

They’ve seen some weakness recently due to capital spending. Markets don’t like that in the short term, but longer term we think it’s positive. They’re leaning into the demand they’re seeing in the U.S., and their return on invested capital is about 11 per cent annually. So that additional investment should generate strong returns over time.

LINDSAY: When it comes to risks, like you mentioned that capital spending, obviously a lot of investors have been hesitant. Is that one of the biggest risks, or what else are you watching for?

RYAN: Yeah, for sure. A weak economy would lead to a pullback in capital spending. In a recession, companies tighten their spending, which wouldn’t be good for Badger.

On the other hand, AI investment seems to be bucking that trend. You could see capital spending pull back in other parts of the economy, but AI investment continues. Not all of Badger’s business is exposed to that, but it should still be a tailwind.

LINDSAY: Okay, next up, an independent power producer out of Alberta — Capital Power. What do you like about this one?

RYAN: Capital Power also has that tangential exposure to AI. There’s a lot of demand for energy to power data centres. Independent power producers are stepping up to fill that gap.

Capital Power is doing exactly that. They’re working on an agreement to support a data centre buildout in Alberta, and they’ve signed a $3 billion joint venture with Apollo Global to pursue acquisitions in the U.S. to capture growing power demand.

They’re targeting annual growth in adjusted funds from operations in the eight to 10 per cent range through 2030. That’s a solid growth profile.

From a valuation perspective, the stock is trading around 20 times forward earnings, which isn’t cheap, but not expensive either. With a roughly four per cent dividend yield and strong visibility into cash flow, that supports a premium valuation.

LINDSAY: Okay. And lastly, WSP Global. Tell us about this one.

RYAN: WSP is an engineering services firm. The big story is their acquisition of TRC in the U.S., which focuses on power and energy. That’s an area seeing strong demand because of AI infrastructure investment.

This acquisition fits WSP’s strategy of entering new growth areas through large deals. We think TRC will provide a long-term growth platform and also boost growth in the near term.

The stock is trading around 18 times forward earnings, which is near the low end of its historical range since 2017. From a valuation perspective, it looks quite attractive.

LINDSAY: It’s interesting when we talk about mid-cap companies. There’s been a lot of talk about small caps being poised for a strong year. Do you think this could also be a year for mid-caps?

RYAN: For sure. We probably said that last year as well, but if geopolitical risks ease, it’s a strong setup for small- and mid-cap stocks. They tend to have higher growth and are often cheaper than large caps.

LINDSAY: And what about interest rates? Could rate cuts or hikes affect mid-caps?

RYAN: We expect rates to gradually come down, but we think the rate-cut story is largely behind us. Rate cuts would help, but they’re not necessary for mid-caps to perform.

What really matters is earnings growth. With a decent GDP growth backdrop, these companies should perform well, assuming geopolitical risks don’t escalate.

LINDSAY: Always something to watch. Ryan Modesto, portfolio manager and CEO of i2i Capital Management. Thanks for your time.

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This BNN Bloomberg summary and transcript of the March 23, 2026 interview with Ryan Modesto are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.