Company Interview / Sell the banks, buy the AI boom?

Key points:

AI investment boom seen as longer lasting, supporting $NVDA, $AVGO, $TSM, $META Copper thematic favours BHP (ASX:BHP) and Sandfire Resources (ASX:SFR)Rising bond yields viewed as negative for Australian banks and consumers

Alex Pikoulas from Munjarra Capital outlines a bullish view on the ongoing AI-driven investment boom, arguing that market expectations for an imminent slowdown look too cautious. Pikoulas points to Nvidia’s pivotal earnings, the scale of hyperscaler spending, and comments from Microsoft as suggesting AI-related capital expenditure could remain elevated for longer. He highlights Nvidia ($NVDA), Broadcom ($AVGO), TSMC ($TSM) and Meta Platforms ($META) as key beneficiaries, with strong revenue trends offsetting the drag from higher discount rates on growth stocks.

For Australian investors, Pikoulas sees opportunities via the resources sector, particularly copper, which he frames as a second‑derivative AI trade. He notes copper’s recent strength and cites BHP (ASX:BHP) and Sandfire Resources (ASX:SFR) as local exposures. However, he regards the K‑shaped backdrop and rising bond yields as challenging for Australian banks and consumers, reinforcing a preference for international markets over the ASX-heavy domestic index.

Beyond equities, Pikoulas currently favours fixed income, stressing that higher rates are delivering the most attractive defensive yields in more than a decade, especially in investment‑grade bonds and private credit. He remains cautious on interest‑rate‑sensitive infrastructure, while maintaining a constructive stance on gold, driven by central bank buying and geopolitical polarisation.