Publication details

Australian Financial Review

April 26, 2024

12 stock picks for a tough investing environment


James Thomson

12 stock picks for a tough investing environment

Low rates and endless stimulus may have left investors unprepared for the difficult environment that lies ahead. Here are 12 stock picks to consider.

Qiao Ma, Munro Partners

Data centres are often seen as the picks and shovels of the AI goldrush, but this essential infrastructure needs essential infrastructure, too. Portfolio manager Qiao Ma likes New York-listed Vertiv, a provider of vital cooling systems to data centres to prevent overheating of AI chips. The business was recently spun out of a company called Emerson, and Ma sees the potential for revenue to grow at more than 10 per cent a year, and earnings to grow in the low- to mid-teens over the next few years.

After its staggering 206 per cent share price gain over the last 12 months, the Nvidia growth story is well known. But Ma maintains the company has the potential to double its earnings over the next five years as its AI chips are bought by more and more data centres that need to be upgraded to power the AI applications of the future. On Munro’s estimates, just 20 per cent of data centres around the world are ready to adopt accelerated computing technologies, and that penetration is likely to increase substantially.

To read the other 11 stock picks, click here.

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