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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Breville Group (ASX: BRG) delivered a concise trading update at its Annual General Meeting yesterday, focusing on the first half of financial year 2026 (1H26) to date. While the commentary was positive on several fronts, ongoing uncertainties remain in the U.S. market. Continue…

by Roger Montgomery Posted in Companies.

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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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In this video insight, I question whether the trillions being poured into artificial intelligence (AI) infrastructure can ever be justified. By 2028, the industry’s hardware and data centre spend could exceed US$3 trillion, yet customers would need to spend over US$3 trillion a year – around 10 per cent of U.S. gross domestic product (GDP) – to make the math work. Unless adoption and profits scale far faster than history suggests, this AI rocket ship could run out of fuel. Continue…

by Roger Montgomery Posted in Video Insights.

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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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In this week’s video insight, I highlight the folly of buying physical gold amid the recent surge in prices. When people were lining up at Sydney’s bullion stores paying nearly $225,000 per kilo, it signalled a market nearing its peak – exponential rallies like that are rarely sustainable. Beyond timing risk, buying bullion involves steep frictional costs, with a spread of around 7 per cent between buy and sell prices. Since then, gold prices have fallen sharply, leaving many buyers facing losses. If you really want exposure to gold, I argue it’s far more efficient to buy a low-cost exchange-traded fund (ETF) rather than lining up for physical bullion. Continue…

by Roger Montgomery Posted in Video Insights.

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Yesterday I joined Jess Maguire on ABC’s Statewide Drive to discuss the sharp fall in Meta’s share price after it revealed another huge increase in artificial intelligence (AI) spending. I explained that while Mark Zuckerberg insists the investment will eventually pay off, the scale of AI infrastructure costs – potentially US$3–5 trillion by 2030 – means companies will need extraordinary revenues to justify the outlay. History shows transformative technologies often enrich consumers more than investors, and while today’s firms are profitable – unlike in 1999 – the “build-now, profit-later” mentality risks colliding with commercial reality.

Catch the full episode from 1:43:29 ABC Statewide Drive here.
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by Roger Montgomery Posted in Radio.

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