Buy Hold Sell: 4 hot megatrends shaping markets - and 2 on the rise

This episode was filmed Wednesday 11th March, 2026.

AI, energy, infrastructure and defence might look like separate mega trends, but like a giant flywheel, they’re increasingly feeding into one another, creating a feedback loop that is reshaping industries, investment opportunities and the global economy.

The AI boom isn’t just driving demand for semiconductors and cloud computing, it's also triggering a surge in electricity demand, forcing utilities and governments to invest heavily in power generation and grid infrastructure.

On top of that, war and rising geopolitical tensions is driving a structural increase in defence spending, with technology, semiconductors and strategic infrastructure playing a bigger role in modern defence systems.

In markets, this means that the biggest opportunities can often sit not in a single theme, but in the spaces where these trends overlap each other.

In this episode of Buy Hold Sell, Tom Stelzer asks Vihari Ross of Antipodes and Casey McLean of Magellan where they see the best value across the biggest trends shaping markets today and which megatrend could drive the next wave of opportunity. 

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Edited transcript

Tom Stelzer: Hi, I'm Tom Stelzer and welcome to this edition of Buy Hold Sell. AI infrastructure, energy, and defence are some of the big trends that have dominated markets in recent years, but how should you be playing them right now? Joining me today are Vihari Ross from Antipodes and Casey McLean from Magellan to offer their take on the big trends of today and their pick for a trend of tomorrow. Guys, thanks for joining us.

AI - Hardware boom, software opportunity

Tom Stelzer: We're going to start with a big one. Casey, I'll come to you first. We've seen the rise of the chip makers and the hyperscalers and the death of software, but where do you think in the tech sector is offering the best value right now given where we are in the AI cycle?

Casey McLean: Well, AI certainly is a revolution and some have even likened it to electricity in terms of the impact it's going to have on society, economies, and markets, definitely. And it's really happening at a breakneck pace now. But I think the phase the market's in at the moment is really that indiscriminate phase where all the semi-stocks are the winners and all the software stocks are the losers. And I don't think that's the way it's going to play out over time. It's going to be much more nuanced than that. And I think probably software is one area where we're seeing some really good opportunities.

There's definitely going to be some big losers out of the software industry from AI, but there's going to be some really big winners. I think it's those ones where they have your proprietary data, some sort of regulatory lock-in and also network effects or a system of record that AI can't replicate that sort of software. And in fact, they have the opportunity to incorporate AI agents into their software to enhance it and improve productivity for their customers down the track. So there's some areas like ERP software, EDA software, I think, that look really interesting at this point.

Tom Stelzer: Great. So it's software for Casey. Vihari, what about you? Which part of it?

Vihari Ross: Yeah, look, if you see the market reaction, it's definitely been hardware over software for quite a while now, by the way. This risk that's sort of manifested all of a sudden with Claude Cowork has been percolating for a while. Obviously, you've had software volatility spike dramatically. And I think really it has been quite ubiquitous. And that's not to say that the tail risk doesn't exist because this is evolving very quickly and the winners and losers and our understanding of those is going to shift. So I think we really need to be nimble here.

Having said that, incumbency is an advantage for some. And what we're also looking at in that software space is where is there an analogue element to that network? Customer lock-in or users on both sides of a market such that it creates that network effect that means that the software companies themselves can deploy AI and generate a revenue stream from that. So we are looking at that. Some of them also don't even have seat-based models at all and some are really just consumer-facing businesses that have a software sort of label on them.

So there's a lot of opportunity there, but that's not to say that hyperscaler CapEx doesn't mean hardware is going to be successful because, obviously, that's where the CapEx is going. And in some cases, hyperscalers have been sold off here as well, and that's potentially also unfair. There's no place that we won't go to look for those value opportunities in the context of the volatility, that can be your friend.

Infrastructure - a broad opportunity set

Tom Stelzer: We're going to move on to infrastructure next. Vihari, I'll stay with you. We're in what some are calling an infrastructure super cycle. Where do you think we are in the cycle and where do you think the best opportunities are there?

Vihari Ross: Yeah, I think infrastructure, it's such a broad-based term. What does it refer to? It could be literally anything. Even the AI CapEx cycle, a lot of that CapEx has been buildings and econ, and yes, a whole bunch of chips, but that's a type of infrastructure cycle as well. I think one part of the market that's really been left behind in a lot of this exuberance though, particularly in recent years, is real asset investment, which has been going on. Investment in the grid, mining is becoming deeper rather than open cut. So there's opportunities there as well.

And really, it's about where those cycles are shifting in a favourable way. For example, the energy grid investment is stepping up in a very meaningful way in places like China, in the middle of the US where they can redeploy that energy into data centres or into the East and West Coasts. Utilities is an overlooked part of that, as well as rail networks at other places as well. Drilling, for example, in the oil space is moving offshore rather than in shale. So there's those cyclical opportunities that we're looking to identify in this broader infrastructure complex.

Tom Stelzer: Quite a bit from Vihari there. Casey, same question to you. What do you think are the best opportunities in the infrastructure cycle right now?

Casey McLean: Well, I think the electricity part of the infrastructure space does look like it's having a really strong cycle. And that's because of this demand-driven boom from AI and cloud and the like. And that's really for the first time meaning that electricity demand in the US is growing. Between about 2005 and '20, energy demand was flat. But in the last five years, it's now started to grow about 1.7% and that's accelerating.

And that means that these utility companies are investing into generation. And like Vihari said, there's been a theme of hardening out of the electricity grid because there's also this theme of electrification, of renewables coming onto the grid as well. So that means they're also investing in transmission networks as well. So what you're having is these two forces coming together. There's a lot of CapEx being spent by these infrastructure companies, and that CapEx turns into earning streams for some of them.

If you're thinking about the best opportunities, it's probably in those regulated US energy utilities. They're in good locations. You have a strong pipeline of investment opportunities, which is backed by strong demand from their customers as well.

Energy - follow the power demand

Tom Stelzer: Leads us nicely into the next theme, which is energy. Casey, we've seen, I think, renewable transition, energy security, the data centre rollout, they're big focuses in the sector at the moment, but what's the theme you're paying the most attention to?

Casey McLean: Well, I think it's related, actually, to that infrastructure and the data centre theme. And I think one of the really interesting areas we're looking at is in the electrical equipment providers, it's the likes of Schneider or Eaton. What they're really benefiting from is partly that grid hardening that I talked about, but also this data centre investment because around about 30% to 50% of your data centre costs is actually coming in some form of energy equipment that you need, whether it's transformers or switchgear or busbars and the like.

So they're seeing really strong demand, which is only increasing as the power density of these AI data centres really increases. And it's also creating new product opportunities, things like cooling systems and things like HVDC, which could be the new way of delivering power to the servers as well. So these are companies that are in a pretty strong industry in that they're consolidated. Most of these companies do the full stack of equipment, so they've got really good opportunities for growth as well.

Tom Stelzer: Electrical equipment there from Casey. Vihari, what about you?

Vihari Ross: Yeah, look, again, renewables, we tend to look at the entirety of a value chain when it comes to any particular thematic of this nature. And I think when it comes to investments in that energy space, certainly we have renewable energy investments. We've had investments in companies like Siemens Energy, GE Vernova. We've had investments in the utility space that are central to that transmission. We've had investments in those HVAC providers that are essential, essentially, to the building of data centres.

So I think it's about where to go, but I think it's not just a US-centric phenomenon. I mentioned China is actually leading the world in terms of renewable energy investment, and there's also opportunities in places like the Nordics where ultimately there is going to be a shortage of supply of energy in certain regions. And if you're in a company where there's a positive exposure to the pricing dynamic that they will create, that has also created some investment opportunities for us.

Defence - a structural spending shift

Tom Stelzer: Finally, we're going to do defence. Defence spending, I think especially in Europe, was one of the big stories last year. Do you think it's still a valid strategy this year? And if not, where else are you looking in defence?

Vihari Ross: Yeah. Look, defence, that spending tailwind is real. If you look historically, most NATO countries weren't spending. They're prescribed 2% by any stretch. And the catalyst here, perhaps it was Trump, but you're seeing real shift, not just in Europe, by the way, but around the world in terms of that step change in defence spending. And that's been positive for certain companies. But I think the context of this matters, because if you think about, say, the Russia-Ukraine war, the companies that were benefiting for that were almost the grenades and the tank type companies.

And if you think about where defence is going on a forward-looking basis, it's actually more in the technology side. It's maybe strategic assets, it's technology. Who provides that? The chip providers are central, to bring it back to technology again here. And in the case of the most recent Middle East conflict, the implications here are for the oil majors and for the oil drillers as well. So again, looking at it holistically, defence as a theme isn't going away. We certainly have some defence exposures in the portfolio, but perhaps it's not those more traditional defence names. It's more companies that will benefit from strategic defensive expenditure.

Tom Stelzer: Casey, what about you? Where are you looking in defence right now?

Casey McLean: Well, yeah, I agree. I think there has been that sea change Vihari talked about. The last two weeks, obviously, is an example, plus Ukraine, Greenland, the whole NATO thing as well. I think the change has been that in the past, defence spending was these episodic reactions to big events. I think that's changed into a permanent strategy where they're going to invest for the long term. The problem I have with the thematic is valuations. If you look at the very high-quality companies like Rheinmetall or Safran, they're trading on really high valuations.

And yeah, I think maybe a more interesting part of the industrial sector is something like the US equipment rental companies, which are also benefiting from a big sea change in fiscal spending that's brought about by things like the One Big Beautiful Bill, the Inflation Reduction Act, and just the reshoring after all these tariffs. And you're seeing the amount of mega projects in the US really ramp up. So cyclically, it looks pretty well-placed. It's also an industry that has rising penetration. The penetration rates in the US are far lower than in other developed countries, and the industry is consolidating as well.

I think when you factor in the valuations are half that of the defence companies, admittedly growing at a slower rate, but it's still a pretty attractive mid-teens growth rate that that's a sector I'm more interested in at the moment.

The trends for tomorrow

Tom Stelzer: Casey, I'm going to come back to you. What's one trend for tomorrow that investors should be keeping an eye on?

Casey McLean: Well, one we have left for a long time and continue to is healthcare and the ageing population. It's not a new theme. It's been ticking away for a long time. And as I say, demographics are destiny and you can't change that. But if you step back, the reason we like it is that over the last 30 years to 2020, the healthcare sector actually delivered the same returns as the tech sector, but at a much lower volatility or much lower risk.

And that's at a time when you had some huge revolutions in the tech sector, whether it was PCs, the internet, smartphones, and it hasn't kept pace over the last five years or so because there has been a few headwinds there, regulatory pressure, there's been a big wave of major drugs come off patents as well, and just really that very narrow focus on the GLP-1s within the sector as well.

But now valuations look pretty attractive. These are some companies with some really strong assets with enduring and stable earnings growth. So we're seeing a lot of opportunities there in devices, in pharma, in managed care as well. I think that's one that will potentially come back on investors' radars over the course of the year.

Tom Stelzer: Finally, Vihari, what's a trend of yours for tomorrow?

Vihari Ross: Yeah, of course, ageing demographics is one that's on everyone's radar. I think the number of over 65-year-olds in Florida is going to grow at 30% per annum, so that's a very racy growth rate. But just to give something different, I think a thematic that's also not going away is the adoption of AI. The enabling and the building of AI has been very centred around the US. Having said that, the supply chain is global and people often forget that, but the adoption of AI is truly a broad economy dynamic.

It will be banks, it'll be healthcare companies, companies with big data sets that can transition that data set to the cloud will certainly benefit, and that's going to be global, it's not going to be restricted to the US at all. And just to give a healthcare-centric example, 80% of the time that nurses spend handing over is in sharing information verbally. And that's an area where large hospital providers can significantly become more efficient and cut costs. So I think the adoption of AI is going to be a really meaningful game changer in the broadening out that you've started to see in markets.

Tom Stelzer: There you have it, four big themes covered and two to keep on your radar for tomorrow. Thanks to Casey and Vihari, and thanks for watching. Make sure to check out our YouTube channel for more Buy Hold Sell.