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I joined Nadine Blayney on Ausbiz today to discuss why I remain cautious on the artificial intelligence (AI) investment theme, despite strong earnings from the major technology companies. While reported profits continue to rise, I argued that much of the spending on AI infrastructure is being treated as capital expenditure rather than an expense, making earnings appear stronger than underlying cash flows. I also suggested that today’s relatively modest price-to-earnings (P/E) ratios may not tell the full story, noting that markets can still suffer significant declines even from low valuations if earnings prove unsustainable. Ultimately, I believe the key risk is not that AI share prices are too high, but that investor expectations for future earnings may be too optimistic.

Tune in via Ausbiz here: The reason Roger reckons AI is a “bubble” Continue…

by Roger Montgomery Posted in Technology & Telecommunications, TV Appearances.

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Inside every smartphone, laptop, PC, smart speaker, smart TV, digital camera, USB flash drive and gaming console is a memory chip. And then there are industrial, medical and military applications. As an aside, Dramatic Random Access Memory (DRAM) and Not And (NAND) are the high-volume, commodity memory semiconductor components, working together in every device. DRAM requires power and manages your data, while NAND, which does not require power, stores your data. Continue…

by Roger Montgomery Posted in Insightful Insights, Manufacturing, Market commentary, Technology & Telecommunications.

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For some time now, I have been writing about the fundamental structural shift occurring in global asset allocation, and specifically, the figurative death of the traditional 60/40 portfolio.

For many years, the typical approach to wealth management and balanced portfolios was to allocate 60 per cent to growth equities for potential capital gains and 40 per cent to public bonds to provide stability and income. 

When a recession struck and equity markets ran into headwinds, central banks cut interest rates, driving bond prices higher and shielding portfolio returns by offsetting stock market losses. Continue…

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

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When I wrote Value.able in 2010, ‘Quality’ as an investing factor was gospel, a foundational truth: buying fundamentally superior businesses at reasonable prices and holding them over the long run was the surest path to wealth creation.

Individuals like Warren Buffett, Charlie Munger, Mohnish Pabrai, Seth Klarman, Howard Marks and Terry Smith proved, over decades, that Quality rules. Superior Return on Capital Employed (ROCE) or Return on Equity (ROE), high gross margins, and consistent Free Cash Flow (FCF) conversion inevitably compounded a company’s equity, and ultimately produced outsized returns for investors in those businesses. Continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Insightful Insights, Investing Education, Market commentary, Market Valuation.

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I joined Jess Maguire on ABC Statewide Drive to discuss the recent sell-off in technology shares and why rising interest rates, weakening cash flows and growing questions around artificial intelligence (AI) economics may be shifting investor sentiment. We explored how reported earnings across the major AI companies may be overstating the underlying picture, why relatively modest price-to-earnings (P/E) ratios do not necessarily rule out a market correction, and why diversification remains important in an increasingly uncertain environment.

Listen from 1:44:13: ABC Statewide Drive  

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

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I joined Jess Maguire on ABC Statewide Drive to discuss how the rise of passive investing is changing the sharemarket, with index funds increasingly pushing money into the biggest companies regardless of valuation. Using SpaceX as an example, we explored how speculative companies can attract enormous valuations during periods of market optimism, and why that may not last forever. We also looked at what this means for Australians, many of whom may have exposure to these trends through their superannuation.

Tune in from 1:45:22 on ABC Statewide Drive Continue…

by Roger Montgomery Posted in Market commentary, Market Valuation, Radio.

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I joined Juliette Saly on Ausbiz to discuss the ASX debut of FDC Consolidated (ASX), outlining why I believe the construction and fit-out business presents a compelling investment opportunity. I highlighted its 36-year track record, strong insider ownership, large work in progress, repeat client base and attractive forecast yield, while noting that quality businesses can still attract investor demand despite a subdued Initial Public Offering (IPO) market. We also discussed Australia’s fragile consumer confidence, with high household debt, rising rents and ongoing cost-of-living pressures continuing to weigh on sentiment, even as confidence gradually recovers from its 53-year low.

Watch here: FDC’s ASX debut – a builder with bite  Continue…

by David Buckland Posted in Companies, Editor's Pick, Insightful Insights, Market commentary, Market Valuation, Small Caps, Stocks We Like, TV Appearances.

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While the debate continues over whether the artificial intelligence (AI) thematic is a bubble, the S&P 500 and the Nasdaq continue to climb a wall of worry. You’d think this would cause at least some of the AI sceptics to throw in the towel, but if anything, it has reinforced their resolve and reinforced their scepticism.

One of the most vocal is English author and tech columnist Ed Zitron.

In a recent interview with Adam Taggart, Zitron dismantled the core promises of the AI boom, suggesting current Large Language Models (LLMs) are an unsustainable, highly subsidised circular economy that fails to solve basic business problems. He also highlights immediate balance sheet pressures, and extreme market concentration. Continue…

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

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The Financial Year 2026 (FY26) reporting season has concluded with corporate Australia in considerably better shape than many had feared.

Before getting too excited, however, it’s worth noting corporate Australia may not be in as good shape as the headline numbers suggest.

Aggregate profits rose by around 11.6 per cent.  Excluding mining and energy, however, the increase was just 5.3 per cent. Only 36 per cent of companies beat earnings expectations, below the historical average of about 40 per cent. Meanwhile, analysts have been cutting FY27 forecasts. Continue…

by Roger Montgomery Posted in Companies, Economics, Editor's Pick, Feature Article, Insightful Insights, Investing Education, Market commentary, Market Valuation, Small Caps, Stocks We Like.

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Treasurer Jim Chalmers stepped up to the dispatch box in May 2026 to announce a sweeping overhaul of negative gearing and capital gains tax (CGT).

By stripping negative gearing from established properties purchased after May 12 and swapping the 50 per cent CGT discount for an inflation-indexed method and a 30 per cent minimum tax floor from July 2027, the Albanese Labor Government claimed to be setting out to achieve a progressive holy grail. Putting aside that this was nothing more than another tax grab to plug a budget hole born of profligate spending, fiscal waste and mismanagement, they claimed to be tilting the playing field away from wealthy property hoarders and toward aspiring young first-home buyers.

Two months later, the early data is in. And while the reforms have successfully detonated a bomb under housing market activity, the fallout has been completely twisted. Instead of ushering young Australians into their dream homes, Labor’s housing policy has locked them out faster than ever. Continue…

by Roger Montgomery Posted in Economics, Market commentary.

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