From the Wire: BHP our new ASX king after somehow becoming ‘an AI and data centre play’

BHP Group (ASX:BHP) has recently reclaimed the top spot in Australia from the Commonwealth Bank (ASX:CBA), and while CommBank’s epic May collapse has played a role, HotCopper duo Isaac McIntyre and Jonathan Davidson believe there’s a major AI element at play in the BHP boom too.

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Today, BHP is sitting at just over $314 billion in market capitalisation and has rocketed +62% higher from January to the end of the financial year.

“I think BHP can largely thank copper for this one, JD, though iron ore has been helping as well,” McIntyre said. “And, it leaves us with an ‘all hail BHP’ prayer to say every morning at 10 AM before the market opens, right now.”

Maybe BHP should be saying “all hail AI,” though, because that seems to be the biggest driver behind its mega rush over the last few months. According to analysts, BHP’s strategic pivot to copper over the last few years and resulting massive copper production capacity now makes it an AI play,” JD pointed out.

He continued: “Now, copper has become infected with this AI idea that’s come to the fore in the last three years. All of a sudden, Morgan Stanley is looking its investing clients right in the eye and telling them BHP is actually an AI and data centre play because AI and data centres need copper.”

It’s certainly helped the share price, but Davidson mused it may well have opened Oz’s biggest company up to a possible crash as well.

“Does that mean if we see some kind of dot-com crash for the AI sector, as half the world is eagerly awaiting and the other half is terrified of, does that mean BHP tumbles below A$60 a share? Or is that $60 a share based on the early CY20’s thinking of long-term decarbonization agenda bets?” he warned.

“I have no idea where the scales tip – because we don’t do surveys –, but it’s interesting. AI’s fingers are in every pie, and AI and data centres need copper.”

And the pair agreed that, despite everything else around the story, there’s one big victory right on top: “At least now the ASX has an AI giant.”

You can listen to the full HotCopper Wire episode below.

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