The wealth divide: Boomers win as banks and miners surge, tech slumps
Analysts highlighted an exceptionally volatile profit reporting season on worries about the impact of AI, as traditional miners and banks favoured by older generations jumped higher.
The wealth divide between young and old Australians grew over the corporate profit reporting season as traditional mining and banking stocks favoured by the baby boomer generation soared in value, while the tech sector slumped.
The rotation from technology to banking and mining stocks that started in the middle of 2025 accelerated in February as investors favoured the safety of hard assets and housing over companies considered at risk from disruption by powerful new technologies linked to artificial intelligence (AI).
Marc Jocum, a Senior Investment Strategist at Global X ETFs Australia said the unprecedented uncertainty about AI will impact the business and economy translated into exceptional volatility for listed companies when they reported profits in February.
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By continuing you agree to our Terms and Privacy Policy.“Around 46 per cent of companies [in the S&P/ASX 200] had share price moves of 5 per cent higher or lower after reporting results,” he said. “Normally, it’s about one third so investors had a lot to think about.”
The strategist also pointed to macro-economic data that shows inflation of 3.8 per cent ran ahead of wages growth of 3.4 per cent over the the year to December to mean Australians most reliant on their salaries to grow their wealth are under more financial strain. The outcome was the first time real wages have fallen behind inflation since September 2023.
“We’ve had the S&P/ASX 200 near all time highs, property prices at all time highs, bank stocks at highs, so it’s great for older generations but not younger and real wages are going backwards,” Mr Jocum said.
Miners could keep climbing
Ominously for younger investors nursing losses on tech stocks most strategists expect the banks and miners - considered as boring - will continue to outpace the rest of the index.
“Rising profits led by the miners and banks are propelling the market higher. The rotation trade is likely to continue to help Australian and non-tech shares – providing tech shares don’t fall too much,” AMP’s chief economist forecast on Friday.
The local share market’s heavy weighting to banks and miners versus the rest of the world has also helped the S&P/ASX 200 outperform global peers to start 2026.
“Australian shares are a key beneficiary of the rotation trade helped by the now concluded December half earnings reporting season confirming that listed company profits are rising again. So far this year the Australian share market is up 5.3 per cent against 2.8 per cent for global shares,” Dr Oliver said.
The re-emergence of the banks and miners also means the sectors two leaders in Commonwealth Bank and BHP Group now account for a record 25 per cent weighting in the S&P/ASX 200 between them.
Historic rout of software companies
This week the S&P/ASX All Tech Index rose 2.3 per cent to claw back a fraction of its heavy losses that totalled a fall of around 40 per cent from its peak in July 2025 to last week. Over the last month alone the local tech index has lost nearly 15 per cent.
Mr Jocum said he thinks the tech sell-off is likely overdone and that AI will in fact prove a tailwind to many tech businesses even if it’s unclear to investors today which businesses will be the winners and losers at the moment.
“These businesses are going to have to adapt to AI,” he said. “But they’re not all going to be disrupted and I just think tech has been hit too hard.”
The analyst also pointed to numerous tech executives and insiders moving to buy more shares in the companies they founded or work for this week.
On Friday, the chief executive of software logistics company WiseTech Global bought $1 million worth of shares on market, after the company’s value plunged 53 per cent in six months on worries it will face AI-linked competition.
On February 26, Anthony Hall a director in ASX-listed software giant Pro Medicus bought nearly $1 million worth of shares in the business after it plunged 58 per cent over the last six months. The medical imaging company’s founder Sam Hupert also bought nearly $500,000 worth of stock on market.
Other technology executives at Zip Co and Brisbane-based Technology One also joined the share buying spree this week as a vote of confidence in their companies’ futures, despite the market’s doubts.
