Market commentary

Artificial intelligence (AI) is supposed to have all the answers. It’s supposed to save us time and money. It’s supposed to be better than us.They’re the reasons the AI boom exists both on the ground and on the stock market.

The NASDAQ, trading at a near-all-time high, however, sits in stark contrast to questions now being asked about AI infrastructure spending and the future customer spending required to justify it.

Enterprise AI demand has lagged consumer adoption. Back in July, MIT (Massachusetts Institute of Technology) found 95 per cent of enterprises were producing zero return on US$30-40 billion of AI investment. continue…

by Roger Montgomery Posted in Market commentary.

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Since my last column Is there a stock market bubble? Here are the warning signs, which was on the topic of recognising bubbles, subtle shifts have been occurring in the risk postures of major global investors that suggest you now need to behave more cautiously than before.

Some of those behaviours have been reflected in the relative outperformance over the last month of defensive sectors such as healthcare and utilities, beating technology, artificial intelligence (AI) and defence. And some of the same behaviours also reflect the changing picture of liquidity, which, of course, is the fuel that inspires all thematically driven rallies.

This article was first published in The Australian on 30 October 2025. continue…

by Roger Montgomery Posted in In the Press, Market commentary.

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History might not repeat, but it rhymes – especially when markets climb to record highs. Indeed, as markets peak, so does collective optimism. Consequently, experts, economists, and central bankers alike tend to downplay the rising risks, anchor to the “new era,” and declare that ‘this time is different’ – the four most dangerous words ever uttered in investing. continue…

by Roger Montgomery Posted in Market commentary.

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I am reliably informed it’s one of the bigger trends on TikTok at the moment; miming to a mashup of 4 Non-Blondes’ 1993 song What’s Going On, and Niki Minaj’s Bees in The Trap, created by DJ Auxlord, a college senior studying psychology in Ohio.

On Martin Place in Sydney’s CBD, the viral song blasted from a local’s speaker, its hooks – “bees in the trap, bee, bees in the trap” and “what’s going on” – perfectly juxtaposed with the real bees queuing to buy gold just up the hill at ABC Bullion. continue…

by Roger Montgomery Posted in Market commentary.

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October 2025 will go down as an extraordinary month for investors. NVIDIA, which has appreciated by over 50 per cent in the first ten months of 2025 and seen its market capitalization exceed US$5 trillion. The aggregate market capitalization of the Magnificent Seven (including Alphabet, Amazon, Apple, Meta, Microsoft and Tesla) hit US$22 trillion, or 37.4 per cent of the S&P 500 and the excitement surrounding artificial intelligence (AI) is palpable. continue…

by David Buckland Posted in Market commentary.

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In U.S. trading overnight, Nvidia achieved a market capitalisation of US$5 trillion, after which Microsoft, Meta Platforms and Google’s parent company Alphabet delivered their September quarter earnings.

The results were impressive, as expected. Microsoft reported Q1 revenue of US$77.67 billion, beating estimates of US$75.33 billion, with earnings per share (EPS) of US$4.13, surpassing the US$3.67 forecast. continue…

by Roger Montgomery Posted in Market commentary.

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Fourteen years ago, in 2011, a commodity boom in iron ore saw BHP’s share price hit $40 for the first time. It was the 8^th of April 2011. There was great excitement, surrounding Australia being the ‘lucky’ country yet again. Peter Richardson, Morgan Stanley’s then global metals chief economist, put forward a strong investment case for the “crucial” steelmaking commodity.

We will see Morgan Stanley again soon.

By contrast, on April 11 that year we published a blog Will China demand Iron… or…?, where we wrote that iron ore prices would henceforth decline, ending the commodity boom and causing buoyant share prices to fall. continue…

by Roger Montgomery Posted in Market commentary.

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Earlier this month, Nvidia – the company at the heart of the artificial intelligence (AI) boom – announced it had agreed to invest up to US$100 billion in OpenAI to help the Large Language Model (LLM)-maker fund its data centre build out. In turn, OpenAI agreed to fill those data centres with Nvidia Chips.

If it sounds odd, it is. That’s because it’s akin to convincing Nick Scali to buy you a house if you agree to fill it with Nick Scali’s furniture.

In fact, the Nvidia/OpenAI deal was immediately criticised for being ‘circular’. continue…

by Roger Montgomery Posted in Market commentary.

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On this week’s video insight, I discuss how two seemingly separate developments –Jerome Powell signalling an end to quantitative tightening (QT) and surging U.S. subprime auto loan delinquencies – may together warn that the equity bull market is running on fumes. Liquidity support could soon become more targeted, banks may tighten lending, and stretched equity valuations could face pressure. Now is a prudent time for investors to rebalance: rotating profits from high-growth names into defensives, holding some cash for volatility, and perhaps exploring adding uncorrelated assets like private credit or arbitrage funds to their portfolios. continue…

by Roger Montgomery Posted in Market commentary, Video Insights.

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As headlines mount, I wonder whether the nascent disorder in U.S. subprime auto loans becomes a bigger fissure into which a stretched stock market could fall. With stock valuations hovering at historically stretched levels, even a hint of a macroeconomic or financial fracture could precipitate a correction. continue…

by Roger Montgomery Posted in Market commentary.

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