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In this video insight, I explain why I believe investors should look beyond the strong earnings and seemingly reasonable valuations driving enthusiasm for artificial intelligence (AI). I examine questions surrounding optimistic market assumptions, insider selling incentives, the economics of AI, rising debt levels, weakening cash flows, and whether reported earnings are overstating the sector’s underlying profitability. I also argue that low price-to-earnings (P/E) ratios do not necessarily protect markets from significant corrections and suggest the real bubble may lie in AI earnings expectations rather than share prices. Continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Global markets, Investing Education, Manufacturing, Market commentary, Video Insights.

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San Francisco and Lisbon-based KIÉR LIÓR provides institutional investors, family offices, and direct lenders with institutional-grade oversight, underwriting and portfolio management services for international private credit portfolios.

On the subject of Private Credit, their musings are well worth your time, remembering the comments are typically U.S. and Euro-centric, where conditions and legal frameworks may not favour lenders as much as they do in Australia.

Reflecting on a recent episode of the Credit Edge podcast featuring Goldman Sachs Chief Credit Strategist Amanda Lynam, KIÉR LIÓR Managing Director Aznaur Midov noted: Continue…

by Roger Montgomery Posted in Aura Group, Economics, Market commentary.

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With stock markets recently retreating marginally from artificial intelligence (AI)-fuelled record highs, the question many thoughtful investors are asking is: Will the bull run resume, or is this the beginning of a broader correction?

Of course, we can’t be certain but what we can know is that as stock prices continue to soar, fears of an AI bubble will likewise increase.

Financial markets have performed spectacularly since late 2022, and equities have accelerated their gains this year just as structural stresses begin to appear and debates about sustainability begin to intensify. Continue…

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

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• POSTED IN Economics, Market commentary, Technology & Telecommunications.

According to the most bullish investors the current bull market bears little resemblance to the tech bubble of 1999/2000.

That late-90s tech bubble was fueled by a Fear of Missing Out (FOMO), which was reflected in the very high price-to-earnings (P/E) multiples. Today’s bull market is accompanied by much more reasonable valuations suggesting that the rally is merely reflecting an equally steep increase in real earnings.

In early 2000, the tech sector’s forward P/E ratio stood at 55 times, and the broader S&P500 rose to 25 times forward earnings; today, the S&P500 sits on a forward P/E of 20.5 times and the tech sector on 23 times.

The bulls suggest an earnings-driven rally (as reflected in modest P/E ratios) is inherently more sustainable than one built on expanding hope and P/Es. Continue…

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

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I joined Juliette Saly on Ausbiz to discuss how the rise of passive investing is reshaping markets. With ETFs and index funds now dominating trading, quality-focused active managers are struggling as money flows into the biggest index constituents regardless of valuation or fundamentals. While this trend may continue for some time, market cycles eventually turn, and when they do, companies with strong fundamentals, high-quality balance sheets and durable cash flows are likely to come back into favour.

Watch the episode here: The “profitless rally” Roger thinks could end badly Continue…

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

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Since Labor’s 2026 federal budget changes were handed down, Australia’s property market – particularly suburbs across Sydney and Melbourne – has experienced sharp price corrections.

While property commentators spent early 2026 tracking a largely flat, sideways trend in capital city housing (hovering around the $1.81M to $1.83M median mark in Sydney), the post-budget landscape has delivered a rude shock.

For homeowners who, for years, sacrificed and scrimped to save a 10 to 20 per cent deposit and then purchased or refinanced during 2025 or early 2026, these price falls are no longer just abstract paper losses – they represent a devastating hit to their wealth and equity. Indeed, all they’ve saved has been wiped out in a matter of months. Continue…

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

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In my latest Firstlinks article, I explore whether artificial intelligence (AI) is following the familiar path of past technology bubbles. As businesses shift from AI experimentation to demanding measurable returns, the question becomes whether the trillions spent on AI infrastructure will ultimately generate enough revenue to justify today’s lofty valuations.

You can read the article via Firstlinks here: Have AI’s four horseman arrived? Continue…

by Roger Montgomery Posted in Economics, In the Press, Insightful Insights, Market commentary, Technology & Telecommunications.

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I joined Jess Maguire on ABC Statewide Drive to discuss the Big Mac Index and how it uses the concept of purchasing power parity to assess whether currencies appear overvalued or undervalued. We also explored why the index has limitations as a measure of fair value, what it suggests about the Australian dollar, and the important differences between market pullbacks, corrections and crashes, highlighting why short-term volatility is a normal part of investing.

Listen in from 1:47:03: ABC Statewide Drive

by Roger Montgomery Posted in Economics, Radio.

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It’s the question on every investor’s mind: are the hyperscalers spending too much on their infrastructure buildout such that they won’t generate a satisfactory return on capital?

Investors are furiously debating whether the Hyperscalers are overspending.

Recently, ‘Lloyd’ commented on a Livewire blog post about the subject, stating the following: Continue…

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

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In this week’s Video Insight, I explain why market volatility is a normal part of investing. While market pullbacks can feel unsettling, history shows they’ve often been temporary and have regularly occurred even in years that finished with strong returns. The key is staying disciplined and keeping your focus on the long term. Continue…

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

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• POSTED IN Economics, Editor's Pick, Insightful Insights, Intrinsic Value, Investing Education, Market commentary, Market Valuation, Video Insights.