How to play the super cycle in AI wealth creation: Aussie investors urged to log into Wall St
Investors are being told to forget the ASX and look to the US for big winners that offer the opportunity to create investing wealth over the next five years.
Australian share investors should look beyond the local market towards Wall Street to profit from a decade long super cycle in wealth creation related to advance in artificial intelligence.
According to investment experts, companies listed in the US have the access to capital and intellectual property needed to unlock the big advances in the rapidly advancing technology.
Whereas the S&P/ASX 200 Index is more suited to income-focused investors, as Australia’s economy faces headwinds around soaring interest rates and falling house prices.
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By continuing you agree to our Terms and Privacy Policy.“The ASX is heavily dominated by banks, miners and businesses that are closely tied to the domestic economy,” said Cliff Mann the chief investment officer at ETF Shares.
“While the Nasdaq offers investors direct exposure to the tech companies driving the next phase of global growth.”
Over the 10 years to October 30, 2026, the Nasdaq Index has posted a compound annual growth rate of 17.4 per cent a year, versus just 5.3 per cent for the S&P/ASX 200 Index, before the benefits of dividends.
“The Nasdaq is simply a much better hunting ground for growth opportunities, not just in AI, but also in other innovations that could change the world, such as autonomous driving, space technology and quantum computing,” Mann said.
The best performing business among Wall Street’s 500 largest companies on the S&P/500 in 2026 is vaccine and cancer treatment giant Moderna.
As it uses AI to unlock potential cancer treatments the biotech’s shares have rocketed more than 600 per cent this year to turn $5000 at the start of the year into more than $25,000 at then end of October.
By comparison the best performer on the S&P/ASX 200 is Codan. It’s up 102 per cent thanks to its role supplying parts for drones used in modern warfare tactics that rely increasingly on AI.
AI hardware such as computer chips
Jarrad Stuart, the co-founder and portfolio manager at boutique asset manager Sharpbridge Funds Management, is another advocate for the benefits of investing overseas in search of strong capital growth.
The Sharpbridge Fund has returned 31.4 per cent net of fees over the 12 months to September 30, versus 9.8 per cent for the MSCI All World Index.
Mr Stuart said a big driver of the market-thumping returns was owning Nasdaq-listed computer chip manufacturer Sandisk.
It has soared 398 per cent from $US275 per share at the start of 2026 to $US1372 per share on October 30. In June, it even peaked at a record high more of than $US2300 per share.
“It’s been sold off recently due to concerns Chinese chip makers will grow rapidly and take a foot hold in the industry,” says Stuart.
“Whilst we acknowledge the risk, we view Sandisk’s NAND chips as higher quality with decades of research and development behind them. We think it’s a buy over the next 6 to 12 months, especially as a key supplier to the AI and data centre structural growth story.”
AI applications, cybersecurity
Other companies posting massive capital gains for investors are in the cybersecurity sector.
As AI agents advance in capabilities they create higher risks around stealing company data or funds, and shutting down private internet networks.
This is fuelling corporate demand for the products of cybersecurity companies. On the Nasdaq Index leading player Crowdstrike is up 124 per cent year-to-date and Palo Alto Networks has soared 108 per cent.
ETF Shares investment expert Mann says another business named Data Dog is winning as a proxy for the growing deployment of AI applications.
“As businesses adopt more AI models and agents, they need tools to monitor their performance, reliability, costs and security, which plays directly into Datadog’s strengths,” he says.
“Its revenue grew 36 per cent year-on-year in the June quarter. What we particularly like is its capital light business model, which stands to benefit from the growing complexity of AI applications rather than being disrupted by AI itself like other software companies.”
Data Dog shares are up 99 per cent over the calendar year to October 30.
Another business linked to demand for AI services liked by Mann is Nasdaq-listed Penguin Solutions.
“Penguin Solutions is a lesser known player in the AI infrastructure space, providing advanced computing systems, memory solutions and services that help businesses deploy AI at scale, including hyperscalers like Meta and other neocloud providers,” said Mann.
Elsewhere, broker Morgan Stanley thinks computing giant Microsoft is a buy as it sells AI platforms and agents to its corporate customers.
