BHP poised to overtake banks as AI demand surges

InvestorDaily

BHP could continue to outperform Australia’s major banks as investors increasingly favour companies exposed to artificial intelligence infrastructure and global growth themes, according to Global X ETFs. Justin Lin, investment strategist at Global X, said the outlook for the banking sector had become more challenging as economic growth slowed and conditions in the housing market softened. Banks are facing pressure from weaker economic activity, cooling property markets and uncertainty among domestic investors, including around capital gains tax reform, Lin said.

He pointed to falling auction clearance rates across Queensland and New South Wales as an early indicator that mortgage demand may begin to weaken. The comments come as investors reassess the strong premium attached to Commonwealth Bank, which has benefited from sustained domestic capital inflows and its position as a market favourite. “While CBA has benefited from years of strong domestic capital flows and a premium valuation, investors are beginning to question some of the assumptions underpinning that premium. Concerns around slower loan growth are increasing as the domestic economy and property market cools.”

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