Market Valuation
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Summing up the bear case for AI
Roger Montgomery
February 13, 2026
The artificial intelligence (AI) industry is currently grappling with what some experts call a ‘trillion-dollar math problem’. The numbers might not stack up because customers might simply lack the funds to spend on AI tools to allow hyperscalers to achieve a decent return on their AI infrastructure investment.
With hyperscalers projected to spend US$3 trillion on AI infrastructure by 2029, the market faces a substantial revenue gap. To justify current valuations and maintain reasonable margins, AI services would need to generate revenue equivalent to 10 per cent of the entire U.S. Gross Domestic Product (GDP) of US$30 trillion. This represents a massive commercial risk; if expectations of an adequate return on investment in two or three years evaporate, this historic capital expenditure risks producing a multi-trillion-dollar overcapacity. continue…
by Roger Montgomery Posted in Market commentary, Market Valuation, Technology & Telecommunications.
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Commonwealth Bank 1H26 results and AI update
Roger Montgomery
February 11, 2026
Commonwealth Bank (ASX: CBA), under the guidance of CEO Matt Comyn, has once again proven why it’s considered the best Australian bank. Despite a muddy economic backdrop and fierce competition in the mortgage market, the bank’s half-year FY26 (1H26) results beat analyst expectations (again).
While the headline numbers were strong and will dominate today’s commentary, a more interesting story lies in the shifting dynamics of Australia’s largest lender. continue…
by Roger Montgomery Posted in Companies, Editor's Pick, Financial Services, Market commentary, Market Valuation, Stocks We Like.
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Investors are selling the disruptors and the disrupted
Roger Montgomery
February 6, 2026
On December 18, in a blog entitled Time Magazine Cover Curse, I wrote, “…Gracing the cover of the [TIME] mag isn’t a coronation but a harbinger of doom, because the moment a public figure has permeated the public discourse sufficiently to land the cover, the trajectory inevitably reverses.”
Politicians have suffered landslide defeats after being featured on the cover, as have business tycoons whose stocks plummet, and celebrities whose reputations are assassinated under sudden, intense scrutiny. continue…
by Roger Montgomery Posted in Companies, Economics, Investing Education, Market Valuation.
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MEDIA
Soaring stocks hide U.S. fragility as gold surge sends warning to investors
Roger Montgomery
February 5, 2026
The strength of U.S. stock markets would have any reasonable investor believing all is well with the world and that U.S. exceptionalism is alive and well.
Yet, the stock market’s buoyancy belies the head-spinning conga line of events over the first month of 2026 that would, at any other time in history, have caused the market to plunge or coincided with it.
Take gold’s 17 per cent ascent so far this month, which follows a 66 per cent rise in 2025. Such moves are unusual. Since gold began trading freely in the 1970s, the average annual return for gold has been roughly 6-8 per cent. January’s return doubles that annual number.
This article was first published in The Australian on 04 December 2025. continue…
by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Economics, Global markets, In the Press, Insightful Insights, Investing Education, Market commentary, Market Valuation.
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MEDIA
ABC Nightlife – from metals to mega caps: volatility returns to markets
Roger Montgomery
February 4, 2026
Gold prices jumped as much as 20 per cent in January before falling this month, while silver, after rising 250 per cent over 13 months, dropped 20 per cent in just days, raising the question of whether the boom is over or volatility will continue. Last night on ABC Nightlife with Philip Clark, I discussed these moves alongside why markets are no longer responding logically to geopolitical headlines, as massive passive index flows and belief in US exceptionalism keep equities elevated. I also explained how index investing has driven extreme concentration in mega-cap tech stocks and why that dominance is now starting to unwind as investors reassess who will truly benefit from artificial intelligence (AI).
Tune into the segment from 07:12 here: ABC Nightlife
by Roger Montgomery Posted in Global markets, Investing Education, Market commentary, Market Valuation, Radio.
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Montgomery Small Companies Fund 2025 year in review
Scott Phillips
January 27, 2026
2025 was a strong year for small companies and for the Montgomery Small Companies Fund. In this detailed video, I’m joined by Gary Rollo, Co-Portfolio Manager of the Montgomery Small Companies Fund to review the Fund’s performance, key market drivers, and the outlook for small caps and growth companies heading into 2026. continue…
by Scott Phillips Posted in Companies, Economics, Global markets, Investing Education, Market commentary, Market Valuation, Small Caps, Stocks We Like.
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Navigating liquidity – Michael Howell’s 2026 outlook
Roger Montgomery
January 20, 2026
As we kick off 2026, I turned to UK-based Crossborder Capital’s latest global liquidity update by Michael Howell, noting booms and bubbles cannot occur without ample liquidity. The artificial intelligence (AI) boom was born of liquidity. Without ample central bank accommodation, we would not even be talking about AI, perhaps not even whispering about it except in a few university laboratories.
According to Howell, the 2026 financial landscape is a stage set for drama. His latest view on the prospects for crypto and risk assets in 2026 argues that while monetary inflation is here to stay as governments’ go-to fix for fiscal/budget woes, a looming downswing in global liquidity could produce turbulence for risk assets. Drawing from his analysis of cycles, correlations, and historical patterns, he likes positions in gold and cryptocurrencies as essential hedges – but advises investors to buy on dips. continue…
by Roger Montgomery Posted in Insightful Insights, Investing Education, Market commentary, Market Valuation.
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Farewell 2025, Hello 2026
David Buckland
January 2, 2026
As we turn the page on 2025, it is a useful time to step back and reflect on what shaped markets over the year just passed. In this article, I review the key themes that influenced global equities, interest rates, commodities, and currencies, highlighting where investors were rewarded, where conditions became more challenging, and what these developments may mean as we look ahead. continue…
by David Buckland Posted in Insightful Insights, Market commentary, Market Valuation, Popular.
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MEDIA
Get set for a bumpy 2026
Roger Montgomery
January 2, 2026
In my latest article for Firstlinks, I reflect on why 2025 delivered another strong year for equities, supported by the continued combination of disinflation and positive economic growth – with much of the strength driven by enthusiasm around artificial intelligence (AI).
However, I note that as the gap between valuations and realistic long-term returns continues to widen, the road ahead is likely to become bumpy.
by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Economics, In the Press, Insightful Insights, Market commentary, Market Valuation, On the Internet.
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Markets at a crossroads
Roger Montgomery
December 24, 2025
Goldman Sachs Research represents one of the largest stockbroking firms in the world. So, it should come as no surprise that the investment bank has recently published its stock market outlook for the next decade, predicting an average annual return of almost eight per cent.
But if you’ve grown accustomed to smooth and steady gains, you may need to recalibrate your expectations, despite Goldman Sachs’ reassurances. continue…
by Roger Montgomery Posted in Economics, Global markets, Market commentary, Market Valuation.
