Rudi’s View: AI Updates, Hot Favourites & First August Results

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In today's edition:

-August Updates Are A-Comin'
-The Era Of Polarisation
-Morgan Stanley's Hot Favourites For August
-Attention Returns To AI Infrastructure
-FNArena Talks
-Review All-Weather Model Portfolio
-Best Buys & Conviction Calls

By Rudi Filapek-Vandyck

August Updates Are A-Comin’

The Australian corporate results season has officially started but, as per unofficial tradition, the pace of corporate releases remains rather glacial this early in the month.

By week’s end FNArena’s Corporate Results Monitor will only list some 18 companies, not more than a drop in the ocean given that number will be around 385 or so by early September, but that’s just how this cookie crumbles in Australia nowadays.

Are there any conclusions that could possibly be drawn this early?

Nah. But we do note the REITs have been a positive contributor thus far, as anticipated by analysts covering the sector.

Plus all of ResMed ((RMD)), News Corp ((NWS)) and Credit Corp ((CCP)) managed to outperform forecasts while updates from REA Group ((REA)), AMP Ltd ((AMP)) and Pinnacle Investment Management ((PNI)) contained enough good news to keep the share price well-supported.

One might say the season has begun on a relative positive note, but let’s not get overly excited just yet. There’s literally a deluge in releases awaiting us over the coming three weeks (plus a bit).

By this time next week, the numbers will be a lot larger, but the bulk is reserved for the final two weeks of the month.

FNArena is keeping a close watch daily: https://fnarena.com/index.php/reporting_season/

The Era Of Polarisation

A timely reminder entered the inbox this week: it’s not just share markets that are heavily polarised nowadays, the same observation applies to the economies underneath.

Economists at Oxford Economics shared the following observations about the US economy:

“The economy has slowed and is growing below its short-run potential, but this hasn’t altered the bifurcated nature of the consumer, business environment, and labor market. This leaves the economy more vulnerable and masks some of the fissures beneath the aggregate economic data.

“It’s also a tale of two labor markets. It’s a good labor market for those with a job, but a challenging one for those who are unemployed or not in the labor force but want a job. The bifurcated labor market can change quickly if layoffs increase, a significant risk to the forecasts.”

Morgan Stanley’s Hot Favourites For August

Analysts at Morgan Stanley tend to nominate their Conviction Ideas among smaller cap companies prior to each results season, and this time the tradition remains intact.

So far, the following four have been nominated:

-Tuas ((TUA))
-McMillan Shakespearre ((MMS))
-Generation Development ((GDG))
-Breville Group ((BRG))

Attention Returns To AI Infrastructure

On Tuesday and Wednesday, share prices in Macquarie Technology ((MAQ)), NextDC ((NXT)) and Goodman Group ((GMG)) enjoyed renewed buyers’ interest as analysts at Morgan Stanley reiterated their positive projections –yet again– for global spending on AI and the flow-on benefits for ASX-listed data centre operators.

Irrespective of the multiple challenges that lay ahead for the industry, Morgan Stanley’s in-house view is that global data centre capacity is poised to grow at a 23%-plus CAGR between 2025 and 2030. In Australia, capacity is projected to grow from 1275MW today to 3200MW, which in layman’s terms translates to more than double over 4.5 years.

The industry equally received some attention from Treasurer Jim Chalmers who declared data centres represent “a major opportunity” to position Australia as a global player in AI infrastructure.

Having had spent time with institutional investors holding about $3trn in capital, Chalmers stated for Australia to seize this opportunity, future success hinges on getting energy, zoning approvals, and workforce skills right.

He’s confident any obstacles can be overcome.

Meanwhile, the quarterly corporate results season in the US is very much pointing in the direction of an acceleration in demand for data centres and cloud connectivity.

Earlier in the year, when doubt crept in and clouded global investor sentiment towards the future and outlook for AI, shares in NextDC et al sold off. To date they haven’t fully recovered from that reversal in sentiment just yet.

Echoing the optimism also expressed by their colleagues at Morgan Stanley, RBC Capital analysts have been quick in pointing out Australian data centres should be among key beneficiaries from the positive mood emanating from market updates by major investors including Meta, Amazon, Google and Microsoft.

RBC Capital reminded investors it has Outperform ratings for NextDC (price target $20) and Macquarie Technology (Price target $95) and a Sector Perform, Speculative Risk rating for cloud connectivity player Megaport ((MP1)) (target $13).

Regular readers would be well aware all of Goodman Group, NextDC and Macquarie Technology are included in the FNArena-Vested Equities All-Weather Model Portfolio (see also further below).

In preparation of August:

https://fnarena.com/index.php/2025/08/06/rudis-view-five-bellwethers-for-august/

https://fnarena.com/index.php/2025/07/30/rudis-view-taking-stock-ahead-of-august/

https://fnarena.com/index.php/2025/07/24/rudis-view-bega-cheese-cettire-harvey-norman-sigma-siteminder-more/

https://fnarena.com/index.php/2025/07/23/rudis-view-extreme-bifurcation-ahead-of-august/

https://fnarena.com/index.php/2025/07/17/rudis-view-aussie-broadband-oohmedia-paladin-energy-seek-xero-more/

https://fnarena.com/index.php/2025/07/16/rudis-view-navigating-covid-legacies/

FNArena Talks

As per tradition, my interview with Livewire Markets ahead of August results:

https://www.livewiremarkets.com/wires/rudi-it-s-not-a-bubble-ai-s-next-winners-and-what-investors-are-overlooking

Same video on YouTube:

https://www.youtube.com/watch?v=zacYSeVdqW4

Review All-Weather Model Portfolio

The financial year ending on June 30th 2025 featured the return of Donald Trump in the White House and of extreme market volatility.

The second half of the year also saw doubt creeping into general sentiment towards AI and demand for data centres.

All in all, a gain of 13.85% (pre-fees) for the twelve months is not something to be unhappy about, right?

FY25 review of the All-Weather Model Portfolio: https://www.fnarena.com/index.php/download-article/?n=4B38C0EF-A173-8CE6-736A7AFC7B19FC49

Best Buys & Conviction Calls

Bell Potter‘s Buy-rated ASX-listed agricultural stocks:

-Australian Agricultural Company ((AAC))
-Bega Cheese ((BGA))
-Elders ((ELD))
-Noumi Ltd ((NOU))
-Nufarm ((NUF))
-Rural Funds ((RFF))
-Select Harvests ((SHV))

Bell Potter’s sector preferences for the financial year ahead.

Listed Investment Companies ((LICs)
-Australian Foundation Investment Company ((AFI))
-Metrics Master Income Trust ((MXT))
-MFF Capital Investments ((MFF))

Agricultural & Fast Moving Consumer Goods (FMCG)
-Bega Cheese ((BGA))
-Rural Funds Group ((RFF))
-Elders ((ELD))

Technology
-WiseTech Global ((WTC))
-Gentrack ((GTK))
-Seek ((SEK))

Diversified Financials
-Cuscal ((CCL))
-Praemium ((PPS))
-Regal Partners ((RPL))

Real Estate
-Aspen Group ((APZ))
-Cedar Woods ((CWP))
-Region Group ((RGN))

Retail
-JB Hi-Fi ((JBH))
-Universal Store Holdings ((UNI))
-Propel Funeral Partners ((PFP))

Industrials
-LGI Ltd ((LGI))
-Environmental Group ((EGL))

Healthcare
-Telix Pharmaceuticals ((TLX))
-Neuren Pharmaceuticals ((NEU))
-Monash IVF ((MVF))

Gold
-Minerals 260 ((MI6))
-Santana Minerals ((SMI))
-Evolution Mining ((EVN))

Base Metals
-Aeris Resources ((AIS))
-Nickel Industries ((NIC))
-AIC Mines ((A1M))

Strategic Minerals & Processing Technologies
-Alpha HPA ((A4N))
-IperionX ((IPX))

Energy
-Boss Energy ((BOE))

Mining & Industrial Services
-Develop Global ((DVP))
-ALS Ltd ((ALQ))
-Duratec ((DUR))

****

favourites inside the local small cap retail space (in order of preference) as selected by Retail sector analysts at Citi:

-Universal Store Holdings ((UNI))
-Baby Bunting ((BBY))
-Nick Scali ((NCK))
-Temple & Webster ((TPW))
-Beacon Lighting ((BLX))
-Harvey Norman ((HVN))
-Accent Group ((AX1))
-Super Retail ((SUL))
-Premier Investments ((PMV))
-Bapcor ((BAP))
-Lovisa Holdings ((LOV))

****

Crestone’s Best Sector Ideas:

-Ampol ((ALD))
-APA Group ((APA))
-Aristocrat Leisure ((ALL))
-Beach Energy ((BPT))
-Brambles ((BXB))
-Cochlear ((COH))
-CSL ((CSL))
-Goodman Group ((GMG))
-IGO Ltd ((IGO))
-James Hardie Industries ((JHX))
-Lottery Corp ((TLC))
-Macquarie Group ((MQG))
-Metcash ((MTS))
-Monadelphous Group ((MND))
-REA Group ((REA))
-ResMed ((RMD))
-Suncorp Group ((SUN))
-Xero ((XRO))

Crestone’s selection for sustainable income:

-Amcor ((AMC))
-Ampol ((ALD))
-ANZ Bank ((ANZ))
-APA Group ((APA))
-Atlas Arteria ((ALX))
-Beach Energy ((BPT))
-BHP Group ((BHP))
-Car Group ((CAR))
-Coles Group ((COL))
-Dalrymple Bay Infrastructure ((DBI))
-Iress ((IRE))
-Lottery Corp ((TLC))
-Macquarie Group ((MQG))
-Metcash ((MTS))
-Mirvac Group ((MGR))
-Pro Medicus ((PME))
-QBE Insurance ((QBE))
-RAM Essential Services ((REP))
-ResMed ((RMD))
-Suncorp Group ((SUN))
-Tabcorp Holdings ((TAH))
-Telstra Group ((TLS))

****

Goldman Sachs‘ selection of local Conviction Buys:

-Goodman Group ((GMG))
-ResMed ((RMD))
-Worley ((WOR))

Unibail-Rodamco-Westfield ((URW)) is also included for its Paris listing with the local listing about to disappear.

****

Jarden’s 18 Best Ideas among Australia’s small caps (“emerging companies”) includes the following Key Picks considered offering the highest potential return, in order of projected total investment reward:

-GQG Partners ((GQG))
-Dicker Data ((DDR))
-Universal Store Holdings ((UNI))
-Qualitas ((QAL))
-EVT Ltd ((EVT))
-Pinnacle Investment Management ((PNI))
-Temple & Webster ((TPW))
-SiteMinder ((SDR))

The other ten stocks selected:

-Aussie Broadband ((ABB))
-Arena REIT ((ARF))
-Genesis Energy ((GNE))
-Harvey Norman ((HVN))
-Integral Diagnostics ((IDX))
-Karoon Energy ((KAR))
-Michael Hill ((MHJ))
-Pepper Money ((PPM))
-Symal Group ((SYL))
-Vault Minerals ((VAU))

****

Macquarie‘s small caps desk nominated its favourites (Best Picks) ahead of the August results season.

-Aussie Broadband ((ABB))
-Amotiv ((AOV))
-AUB Group ((AUB))
-Alpha HPA ((A4N))
-Bega Cheese ((BGA))
-Capstone Copper ((CSC))
-Codan ((CDA))
-Genesis Minerals ((GMD))
-Iluka Resources ((ILU))
-Integral Diagnostics ((IDX))
-Harvey Norman ((HVN))
-Jumbo Interactive ((JIN))
-Lovisa Holdings ((LOV))
-Maas Group ((MGH))
-Megaport (( MP1))
-Monadelphous ((MND))
-Neuren ((NEU))
-Nick Scali ((NCK))
-oOh!media ((OML))
-Pinnacle Investment Management ((PNI))
-Qualitas ((QAL))
-Reliance Worldwide ((RWC))
-SiteMinder ((SDR))
-Summit Minerals ((SUM))
-Universal Store Holdings ((UNI))
-Ventia Services ((VNT))
-Web Travel Group ((WEB))

****

Morgans‘ selection of Best Ideas consists of the following 29 ASX-listed companies:

Acrow ((ACF))
ALS Ltd ((ALQ))
Amotiv ((AOV))
BHP Group ((BHP))
Collins Foods ((CKF))
Corporate Travel Management ((CTD))
CSL ((CSL))
Dalrymple Bay Infrastructure ((DBI))
Dexus Convenience Retail REIT ((DXC))
DigiCo Infrastructure REIT ((DGT))
EBR Systems ((EBR))
Elders ((ELD))
Goodman Group ((GMG))
Guzman y Gomez ((GYG))
James Hardie Industries ((JHX))
Light & Wonder ((LNW))
Lovisa Holdings ((LOV))
MA Financial Group ((MAF))
Megaport ((MP1))
Orica ((ORI))
Pinnacle Investment Management ((PNI))
ResMed ((RMD))
South32 ((S32))
Treasury Wine Estates ((TWE))
Qualitas ((QAL))
Universal Store Holdings ((UNI))
Whitehaven Coal ((WHC))
WiseTech Global ((WTC))
Woodside Energy ((WDS))

****

Morgan Stanley’s six Conviction stock picks that each represent a compelling individual investment case underpinned by idiosyncratic drivers and the ability to deliver earnings upside, believed to be underappreciated by the market.

-WiseTech Global ((WTC))
-Charter Hall Group ((CHC))
-Suncorp Group ((SUN))
-Life360 Inc ((360))
-Generation Development Group ((GDG))
-Data#3 ((DTL))

Morgan Stanley’s Macro+ Focus List in Australia is currently made up of:

-Aristocrat Leisure ((ALL))
-ANZ Bank ((ANZ))
-Car Group ((CAR))
-Goodman Group ((GMG))
-GPT Group ((GPT))
-James Hardie Industries ((JHX))
-Orica ((ORI))
-Santos ((STO))
-Suncorp Group ((SUN))
-Xero ((XRO))

Morgan Stanley’s Australia Macro+ Model Portfolio is currently made up of the following:

-ANZ Bank ((ANZ))
-CommBank ((CBA))
-National Australia Bank ((NAB))
-Westpac ((WBC))

-Macquarie Group ((MQG))

-Suncorp Group ((SUN))

-Goodman Group ((GMG))
-GPT Group ((GPT))
-Scentre Group ((SCG))
-Stockland ((STG))

-Aristocrat Leisure ((ALL))
-Eagers Automotive ((APE))
-CAR Group ((CAR))
-Domino’s Pizza ((DMP))
-The Lottery Corp ((TLC))
-Wesfarmers ((WES))
-WiseTech Global ((WTC))
-Xero ((XRO))

-James Hardie ((JHX))

-Amcor ((AMC))
-Cleanaway Waste Management ((CWY))
-Orica ((ORI))

-Coles Group ((COL))

-CSL ((CSL))
-ResMed ((RMD))

-AGL Energy ((AGL))
-Telstra ((TLS))
-Transurban ((TCL))

-BHP Group ((BHP))
-Newmont Corp ((NEM))
-Rio Tinto ((RIO))
-South32 ((S32))

-Santos ((STO))
-Woodside Energy ((WDS))

****

Morningstar’s Equity Best Ideas (Conviction Buy Calls by any other name, mostly chosen because of under-valuation).

-Auckland International Airport ((AIA))
-ASX Ltd ((ASX))
-Aurizon Holdings ((AZJ))
-Bapcor ((BAP))
-Dexus ((DXS))
-Domino’s Pizza Enterprises ((DMP))
-Endeavour Group ((EDV))
-Fineos Corp ((FCL))
-IDP Education ((IEL))
-IGO Ltd ((IGO))
-Ramsay Health Care ((RHC))
-SiteMinder ((SDR))
-Spark New Zealand ((SPK))
-Woodside Energy ((WDS))

****

Ord Minnett’s High Conviction calls (all nominations made by sector analysts on a 12 month horizon):

-Aussie Broadband ((ABB))
-Brazilian Rare Earths ((BRE))
-Bubs Australia ((BUB))
-Cuscal ((CCL))
-Qoria ((QOR))
-Regis Healthcare ((REG))
-SiteMinder ((SDR))
-Vault Minerals ((VAU))
-Waypoint REIT ((WPR))
-Zip Co ((ZIP))

****

Shaw and Partners’ Large Caps Model Portfolio:

-ANZ Bank ((ANZ))
-Aristocrat Leisure ((ALL))
-BlueScope Steel ((BSL))
-Brambles ((BXB))
-Dexus ((DXS))
-Macquarie Group ((MQG))
-Newmont Corp ((NEM))
-South32 ((S32))

Shaw and Partners’ emerging companies Top Picks:

-AML3D ((AL3))
-Australian Vanadium ((AVL))
-Bannerman Energy ((BMN))
-Chrysos ((C79))
-Humm Group ((HUM))
-Metro Mining ((MMI))
-Santana Minerals ((SMI))
-Southern Cross Electrical ((SXE))

****

UBS’s Most Preferred Stocks in Australia

In Resources segment:
-BHP Group ((BHP))
-BlueScope Steel ((BSL))
-Newmont Corp ((NEM))
-Orica ((ORI))
-Origin Energy ((ORG))

Among Financials & A-REITs:
-Dexus ((DXS))
-Lifestyle Communities ((LIC))
-Mirvac Group ((MGR))
-Medibank Private ((MPL))
-QBE Insurance ((QBE))
-Steadfast Group ((SDF))

Among Industrials:
-Brambles ((BXB))
-Collins Foods ((CKF))
-Cochlear ((COH))
-Coles Group ((COL))
-NextDC ((NXT))
-REA Group ((REA))
-ResMed ((RMD))
-SGH Ltd ((SGH))
-TechnologyOne ((TNE))
-Telstra Corp ((TLS))
-Telix Pharmaceuticals ((TLX))
-WiseTech Global ((WTC))

UBS’s Least Preferred Stocks in Australia

-Aurizon Holdings ((AZJ))
-ASX Ltd ((ASX))
-Bank of Queensland ((BOQ))
-CommBank ((CBA))
-Charter Hall Group ((CHC))
-Computershare ((CPU))
-Evolution Mining ((EVN))
-Temple & Webster ((TPW))

****

Wilsons‘ Key Investment Opportunities:

-Goodman Group ((GMG))
-Pinnacle Investment Management ((PNI))
-ResMed ((RMD))
-WiseTech Global ((WTC))
-Woolworths ((WOW))

High conviction investment ideas:

-ARB Corp ((ARB))
-Maas Group ((MGH))
-Nanosonics ((NAN))
-Ridley Corp ((RIC))
-SiteMinder ((SDR))

Speculative idea:

-Clarity Pharmaceuticals ((CU6))

Wilsons’ Focus Portfolio currently contains the following:

-ANZ Bank ((ANZ))
-Aristocrat Leisure ((ALL))
-BHP Group ((BHP))
-Brambles ((BXB))
-Car Group ((CAR))
-Collins Foods ((CKF))
-CSL ((CSL))
-Evolution Mining ((EVN))
-Goodman Group ((GMG))
-HealthCo Healthcare & Wellness REIT ((HCW))
-Hub24 ((HUB))
-James Hardie ((JHX))
-Macquarie Group ((MQG))
-Northern Star Resources ((NST))
-Pinnacle Investment Managers ((PNI))
-ResMed ((RMD))
-Sandfire Resources ((SFR))
-Santos ((STO))
-South32 ((S32))
-TechnologyOne ((TNE))
-Telix Pharmaceuticals ((TLX))
-The Lottery Corp ((TLC))
-Westpac Bank ((WBC))
-WiseTech Global ((WTC))
-Woolworths Group ((WOW))
-Worley ((WOR))
-Xero ((XRO))

Paying subscribers have 24/7 access to my curated lists, including All-Weather Performers at: https://fnarena.com/index.php/analysis-data/all-weather-stocks/

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi’s View stories. Go to My Alerts (top bar of the website) and tick the box in front of ‘Rudi’s View’. You will receive an email alert every time a new Rudi’s View story has been published on the website. 

P.S. II – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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