As 2025 unfolds, Australian investors are facing an increasingly complex market landscape. At GP Wealth, our mission remains clear: to help our clients grow and preserve wealth by aligning portfolios with global macro trends, value-driven opportunities, and forward-looking investment themes.
From the recent overvaluation of key Australian stocks to emerging opportunities in healthcare, uranium, AI, and gold, our expert insights and portfolio positioning reflect a disciplined approach rooted in long-term fundamentals and intelligent diversification.
Valuations and Vigilance: The Case of CBA
In the short term, markets can be driven by popularity, momentum, and passive capital flows. As Warren Buffett aptly stated, "In the short term, the market is a voting machine, but in the long term, it's a weighing machine."
Take Commonwealth Bank (CBA) as a prime example. According to Regal Partners' Investment Director Charlie Aitken, CBA represents "the biggest single-stock bubble I've seen in 30 years." With a PE ratio now five standard deviations above its long-term average, driven more by index weight gains than earnings growth, CBA's recent performance raises questions about sustainability.
CBA’s rise hasn’t come from earnings growth, but purely from a doubling of its PE ratio – clearly unsustainable.
While CBA has added $64 billion in market cap for a $357.7 million profit increase (marginal PE of 179x), other stalwarts like CSL and BHP have seen valuation compression despite relatively minor changes in earnings. Such dislocations highlight the importance of active portfolio management and the risks of passive overexposure.
PE of all the major Australian banks.
BHP: A Value-Rich Opportunity
Despite facing a 13% decline year-to-date, BHP offers significantly greater strategic value compared to overvalued market darlings. As one of the world’s largest diversified miners, BHP is well positioned to benefit from global demand for copper and other critical materials—essential for infrastructure, energy transition, and technological advancement.
CBA is up 54% for the year, while BHP is down 13%. We expect BHP – with far greater strategic value – to outperform CBA over the year ahead.
Its current valuation presents a compelling case: unlike CBA, BHP’s earnings decline has been modest, yet its market cap has been punished disproportionately. With a marginal PE of just 3.4x, BHP stands out as a fundamentally sound, undervalued asset poised for recovery and long-term performance.
BHP’s marginal PE is 3.4x. This shows how harshly BHP have been treated – they are currently unloved, but that will change.
We believe BHP’s global exposure, commodity leverage, and disciplined capital management make it a core holding for investors seeking resilient, long-duration growth.
Healthcare: A Rare Opportunity in Defensive Growth
Australian healthcare is now trading at one of the most attractive valuations in over a decade. Following three years of earnings downgrades, the sector appears to have found a floor, offering investors a rare opportunity to acquire high-quality names at discounted levels
healthcare valuations compared to the ASX200 are back at 2014–15 levels. Despite global uncertainty, these names offer consistent earnings and now trade at deeply discounted levels vs the broader market.
Key indicators:
Relative PE valuations are at 10-year lows
Earnings revisions risk is now minimal
Macro headwinds are stabilising, setting the stage for mean reversion
Healthcare names present a compelling combination of growth and defensiveness—essential traits for wealth preservation during uncertain times.
After an unprecedented three-year cycle of EPS downgrades, the healthcare sector looks to have found its earnings floor — reducing downside risk and restoring investor confidence.
Uranium: Building Momentum
Uranium continues to gain traction as a critical pillar in the future energy mix. Several catalysts support the bullish outlook:
The World Bank and IAEA partnership to support nuclear energy in developing nations
Rising uranium spot prices and aggressive restocking by SPUT
Accelerated timelines for U.S. nuclear projects and China's growing reactor build-out
This is a long-term structural opportunity benefiting from both energy security demands and ESG alignment—especially attractive to forward-thinking HNWIs.
Artificial Intelligence: A New Frontier for Earnings Growth
The AI revolution is here, and it is reshaping industries globally. Weekly active users of AI tools like ChatGPT now exceed 600 million. Tech leaders like Meta and Google are rolling out AI-driven innovations that will transform business models and consumer behaviour.
It’s critical to have exposure to companies benefiting from this trend, or those who can utilise AI to drive earnings growth
Investors positioned in companies leveraging AI or enabling the infrastructure behind it—like data centres, chips, and software—stand to benefit significantly. Exposure to this trend is vital for wealth growth in a digitising economy.
Gold: Real Asset Appeal in an Era of Expanding Debt
Despite recent gains, gold continues to offer strategic upside for portfolios concerned with real rates, currency debasement, and geopolitical risk. With governments globally maintaining high levels of spending and the U.S. facing massive debt refinancing at higher yields, gold's store-of-value appeal remains strong.
Gold typically doesn’t peak until silver catches up – the current gold/silver ratio suggests there’s still room to run.
Additional tailwinds include:
A weakening USD under expected Trump-era policies
Rising defence budgets
Historical gold/silver ratio dynamics suggesting further runway
Gold’s low correlation to equities makes it an essential asset for preserving wealth, especially when inflation-adjusted returns are top of mind.
Our Positioning: Growth with Disciplined Risk Management
At GP Wealth, our portfolios remain strategically tilted towards:
Undervalued global defensive growth names
Copper, gold, and uranium miners aligned with macro themes
AI-exposed companies with scalable earnings models
BHP and other fundamentally sound Australian equities trading at compelling valuations
As passive funds continue to dominate capital flows, the mispricing of risk and opportunity grows. For investors, this environment calls for a return to fundamentals: quality, valuation, and strategic insight.
We remain confident that the coming 12 months will be more favourable for active management and bottom-up stock selection—two pillars of long-term wealth creation and preservation.