Ausbil sees AI, critical minerals driving next growth cycle

Ausbil Investment Management believes a combination of artificial intelligence (AI), deglobalisation and reindustrialisation is creating a new wave of long-term investment opportunities despite ongoing geopolitical and energy market volatility.

In a market outlook, Ausbil chief economist Jim Chronis and executive chair, chief investment officer and head of equities Paul Xiradis said structural shifts in the global economy were reshaping equity markets and creating new earnings growth opportunities.

Ausbil argued the move away from globalisation, accelerated by the 2025 tariff shock and the 2026 oil disruption linked to the ongoing conflict in the Middle East, is driving greater investment in energy security, defence, critical minerals and domestic manufacturing.

"The themes of energy and defence security have only been underscored, as has the continuing shift to deglobalisation," the firm said.

The managers pointed to significant policy-driven investment in the US, where efforts to strengthen domestic manufacturing and secure strategic supply chains are supporting a broader reindustrialisation trend.

Ausbil also identified AI as a major long term growth driver, arguing the technology is triggering a global capital expenditure boom that remains in its early stages.

"The boom in AI and its potential to revolutionise the productivity of every industry is another key structural growth driver," the firm said.

They noted investment in AI infrastructure by major hyperscalers is expected to accelerate through 2027, creating substantial demand for energy, copper and critical minerals required to support data centres and digital infrastructure.

Despite recent oil price volatility following tensions in Iran and disruptions to the Strait of Hormuz, Ausbil expects global economic growth to remain resilient, forecasting growth of 3.3% in 2026.

For Australian equities, the firm sees the strongest opportunities in metals and critical minerals, technology companies successfully monetising AI, and businesses with global earnings exposure.

Ausbil forecasts a return to positive earnings growth across the Australian share market in FY26 and FY27, supported by resources, a recovery in financials and continued strength in industrial companies.

The managers noted market uncertainty reinforced the case for active management, with investors increasingly focused on identifying sustainable earnings growth while avoiding downside surprises.