Market Valuation

If you haven’t noticed already, allow me to point out that investment discussions about artificial intelligence (AI) frequently devolve into almost insulting debates between AI evangelists, who cite massive total addressable markets (TAM) and explosive user growth, and sceptics, pointing to trillions of dollars in capital expenditure (capex), a buildout based on speculation, exorbitant compute costs, and an unclear path to profitability.

Aswath Damodaran, NYU Stern professor and widely respected value investor, believes this debate has largely gone off the rails, noting in a recent post, “The debate about AI, in my view, has gone off the track with advocates and sceptics often talking past each other”. Optimists cherry-pick usage metrics, while pessimists focus on heavy spending, with both sides ignoring the rigorous business analysis that needs to take place in the middle. continue…

by Roger Montgomery Posted in Economics, Manufacturing, Market commentary, Market Valuation, Technology & Telecommunications.

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There’s a consistent view of the consumer emerging from Australia’s Financial year 2026 (FY26) retail reporting season.

Households haven’t stopped spending, but they’ve become more selective, more value-conscious and increasingly willing to postpone discretionary purchases or wait for promotions and sales.

The pressure is most evident in big-ticket categories like furniture, appliances, and homewares. Nick Scali (ASX:NCK) noted a significant decline in store traffic late in the year; JB Hi-Fi (ASX:JBH) mentioned that customers are focusing their purchases around major sales; and Temple & Webster (ASX:TPW) said that while browsing continues, customers are delaying their buying decisions. continue…

by Roger Montgomery Posted in Companies, Consumer discretionary, Economics, Editor's Pick, Manufacturing, Market commentary, Market Valuation.

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I joined Jess Maguire on ABC Statewide Drive to discuss why traditional approaches to diversification may no longer offer investors the same protection they once did. We explored how persistent inflation has changed the relationship between shares and bonds, the growing concentration of global share markets in a handful of artificial intelligence (AI) linked companies, and why investors may need to diversify beyond traditional asset classes and markets by considering a broader range of investment strategies.

Listen to the full segment from 1:46:20 – ABC Statewide Drive continue…

by Roger Montgomery Posted in Economics, Insightful Insights, Investing Education, Market commentary, Market Valuation, Radio.

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In recent days, we have seen three ASX listed companies receive offers by private equity, and in each case, it appears their ownership will likely head overseas. 

I Squared Capital

New York based “Sophisticated and long-term infrastructure investor”, I Squared Capital has bid $1.70 per share for oOh!media Limited (ASX: OML), thus valuing the company at over $1.0 billion in Enterprise Value (EV), including the $130 million of net debt as at June 2026. continue…

by David Buckland Posted in Companies, Economics, Global markets, Insightful Insights, Market commentary, Market Valuation.

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Despite the utterings from our senior politicians when discussing Australia’s Gross Domestic Product (GDP), this figure takes neither the rate of inflation, nor our population growth into consideration.

When our real GDP per capita for the June 2026 Quarter is released on Wednesday 2 September, I am concerned we will see another negative number, delivering lower living standards for Australians, as experienced over recent years. continue…

by David Buckland Posted in Companies, Editor's Pick, Market commentary, Market Valuation.

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How much do the artificial intelligence (AI) hyperscalers’ businesses need to make from selling their AI tools in order to generate a decent return?

The debate surrounding the Return on Invested Capital (ROIC) for big tech’s massive AI infrastructure expansion revolves around a core question: How much end-user revenue is required to cover hardware depreciation, energy costs, and capital costs?

With hyperscaler capital expenditure (capex) on track to surpass US$600 billion- $800 billion annually, several prominent analysts, venture capital firms, and investment banks have published frameworks and scenarios to quantify the revenue needed for a reasonable return.

Here are a handful. You can decide whether the targets are likely to be met. continue…

by Roger Montgomery Posted in Economics, Investing Education, Manufacturing, Market commentary, Market Valuation, Technology & Telecommunications.

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The S&P 500 has once again notched fresh record highs, surging more than 13 per cent year-to-date (YTD) and comfortably outpacing its historical average annual return. Driving the rally is a combination of robust earnings, apparently stabilising geopolitical friction, and the relentless build-out of artificial intelligence (AI) infrastructure. continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Insightful Insights, Market commentary, Market Valuation, Technology & Telecommunications.

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In this video I discuss Aussie Broadband (ASX: ABB), a growing challenger in Australia’s retail broadband market with around 15 per cent of the NBN market across its retail and wholesale services.

The company has delivered double-digit organic sales growth alongside acquisitions, while increasing scale may support further growth and operating efficiencies. Earnings are expected to grow over the next two years, supported by a cashflow-generative business and relatively low gearing.

While concerns around competition from Starlink have recently weighed on the share price, I explain why the current valuation may offer an attractive entry point if ABB continues to execute on its growth strategy. continue…

by Gary Rollo Posted in Companies, Editor's Pick, Insightful Insights, Market commentary, Market Valuation, Popular, Small Caps, Stocks We Like, Video Insights.

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In my latest article for The Australian, I explore the growing risks facing global markets as cracks emerge across technology, fixed income and inflation. With artificial intelligence (AI) investment increasingly circular, government debt climbing and inflation remaining stubborn, investors may need to prepare for a more volatile and challenging market environment.

Download here: Global markets face reckoning as triple threat fractures appear continue…

by Roger Montgomery Posted in Editor's Pick, In the Press, Insightful Insights, Market commentary, Market Valuation.

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I joined Juliette Saly on Ausbiz to discuss the next phase of the artificial intelligence (AI) investment cycle and the growing divergence between the companies building AI infrastructure and the hyperscalers funding it. We explored the risks posed by mounting AI capital expenditure (capex), weakening cash flows, the emergence of lower-cost Chinese AI models and what could happen if hyperscalers begin slowing investment. We also discussed why investors may benefit from looking beyond momentum-driven technology stocks towards high-quality, value-oriented businesses and other defensive assets.

Watch the full episode on Ausbiz here: Who really wins from the AI boom? continue…

by Roger Montgomery Posted in Economics, Global markets, Investing Education, Manufacturing, Market commentary, Market Valuation, Technology & Telecommunications, TV Appearances.

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