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Recognising this isn’t the first time I have expressed concern about the ultimate fate of humans in an artificial intelligence (AI) world, I pondered several AI-related questions over the weekend. 

The first is that if many, and maybe most, of us are using AI already – and some very effectively – with existing infrastructure, how many more data centres do we really need? Flipping the question, if the competition among AI agent providers is driving the cost of AI access down to zero – many use Google’s Gemini daily, and it costs nothing – for what purpose are a thousand more data centres really being built?

The second question is related: AI tools are already so ubiquitous and cheap they amount to a commodity. Consequently, AI infrastructure players may believe that to make any money, they’ll have to race to be the first to create something dangerously powerful. Continue…

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

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On statewide drive with Jess Maguire, I explained that recent market volatility reflects investors reassessing some big assumptions, particularly after Donald Trump’s nomination of Kevin Walsh as the next U.S. Federal Reserve chair.

Many investors had been expecting lower U.S. interest rates, so the nomination caught markets off guard and forced a reversal of those bets. That led to sharp falls in gold and silver, higher bond yields, and weaker share prices. While precious metals may recover over time, I see the bigger influence on sharemarkets as the gradual unwinding of the artificial intelligence (AI) trade. For Australia, stronger U.S. growth can support some companies, but persistent inflation risks and policy uncertainty mean investors are becoming more cautious and re-evaluating risk.

Listen from 1:44:55 here: ABC Statewide Drive. Continue…

by Roger Montgomery Posted in Economics, Global markets, Market commentary, Radio.

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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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How do you produce a ball of wool? Pull on the thread of a woollen jumper! What was once a fine, handmade piece of clothing can quickly become a jumbled mess on the floor, and all one has to do is pull on the thread.

I wonder whether that’s a fitting metaphor for what’s going on in equity markets right now. Continue…

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

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I joined Juliette Saly on Ausbiz to discuss how AI-generated content is becoming so hyper realistic that it is increasingly difficult to distinguish from reality.

For investors, this pace of improvement highlights both the extraordinary power of the technology and the speed at which competitive advantages can erode. If breakthroughs are emerging globally and alternative approaches reduce reliance on massive chip and data centre buildouts, the dominance and pricing power currently assumed for some AI leaders may not prove as durable as markets expect. Continue…

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

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This week on ABC Statewide Drive, I spoke about how artificial intelligence (AI) is reshaping sharemarkets, prompting investors to reassess which business models are likely to benefit and which may face disruption.

Major technological shifts tend to reshape markets in unpredictable ways. In times like these, broad diversification and exposure to strategies that are uncorrelated to markets may help build more resilient portfolios. Continue…

by Roger Montgomery Posted in Market commentary, Radio.

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I joined Juliette Saly on Ausbiz to discuss how the AI trade has shifted from hype to reality. Adoption is proving more cyclical than expected, customers will not pay any price for AI tools, and data centre rollouts face delays from regulation and power constraints. At the same time, higher inflation, rising debt and the end of ultra-low rates are putting pressure on valuations. Software as a Service (SaaS) businesses are being repriced, and sectors like real estate and travel are also starting to feel the impact, prompting investors to reassess risk.

Tune into the full episode here: Ausbiz – Has tech run its course? Continue…

by Roger Montgomery Posted in Market commentary, TV Appearances.

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Business is like a piano accordion. Sectors and individual companies expand and grow, then contract, necessarily becoming smaller than they once were. If you keep this metaphor in mind when investing, it can help you understand the business’s stage of life. 

There are exceptions, of course – those businesses that rise above the cycle of invention, adoption, scale, saturation, disruption and destruction, but they are few and far between. Most will eventually reach a natural limit to their size, and then they either sit there, churning customers for lower margins, or are disrupted, or their customers move on to the next trend. Continue…

by Roger Montgomery Posted in Market commentary.

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I joined Paul Turton on ABC Newcastle Mornings to discuss the recent volatility in global markets, driven by U.S. tariffs, political uncertainty and rapid developments in artificial intelligence (AI). I explained that because the U.S. represents around 30 to 40 per cent of global market capitalisation, what happens there inevitably affects Australia, and heightened uncertainty is making investors less willing to pay elevated valuations. Continue…

by Roger Montgomery Posted in Companies, Radio, Technology & Telecommunications.

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