David Tuckwell is climbing the wall of worry, and he's still a raging bull

ETF Shares Chief Investment Officer, David Tuckwell, isn't backing away from the bull case.

Despite war driving commodity prices and inflation higher, and US equity valuations remaining elevated by historical standards, he still believes America is the best place in the world to invest. 

He is sticking with the Magnificent Seven, remains bullish on the next phase of the AI boom and sees one technology giant as particularly well placed to dominate it.

“The US just remains the best destination in the world to invest for reasons foul and fair. The fair ones are the US just has a lot more dynamic entrepreneurial wealth building culture than you may find in other places. And the fundamentals of American businesses are just better.”

That conviction becomes even clearer when Tuckwell looks five years out. Asked where he would put $100,000 today, his answer ultimately came back to AI, which he describes as a “once-in-a-generation wealth creation opportunity”.

In this interview, Tuckwell explains why he believes US exceptionalism still has further to run, why the much-maligned Mag Seven could surprise investors, and where the next wave of AI winners could emerge. 

He also reveals why copper is a 2035 trade, why he has turned bullish on gold and the stock he would back for the next five years.

War changes the inflation equation

For Tuckwell, investors trying to identify the biggest force driving markets need look no further than the Middle East.

The importance of the Strait of Hormuz is well understood, but he argues the headline numbers understate its significance. While roughly 20% of global oil supply transits the strait, Tuckwell says around a third of seaborne supply passes through it. Because seaborne oil plays an outsized role in setting global prices, disruption has implications well beyond the petrol bowser.

“Because of this war, this needless war, this war of distraction and diversion, inflation is going up globally thanks to rising commodity prices.”

Higher energy prices feed into fertiliser, food, transportation, plastics, packaging and eventually a huge range of consumer goods. Combined with the continuing Russia-Ukraine conflict and damage to energy infrastructure, Tuckwell believes that creates renewed inflationary pressure and a case for higher interest rates.

Even so, he does not believe higher rates necessarily derail equities. The absolute level of rates matters less, in his view, than their rate of change, and he believes markets may already have passed the most damaging point.

“My gut feel is with the surprises in this US-Iran war peaking, we’re past the peak rate of change on rates. And I don’t see that as having a big, big impact on the US stock market.”

Why US exceptionalism isn't dead

Despite elevated valuations, Tuckwell remains firmly in the US exceptionalism camp.

His argument starts with fundamentals. US companies have delivered stronger earnings growth and, sector for sector, higher returns on equity and greater sales efficiency than peers elsewhere.

The biggest threat to that thesis may come from China.

Tuckwell is watching whether Chinese companies can increasingly displace US industrial and technology champions, pointing to Xiaomi (1810.HK) as an example of a company producing technology capable of competing with American peers. The crucial question is whether those products can gain widespread access to Western markets.

For Tuckwell, the failure condition for US exceptionalism would be clear: companies such as Apple (NASDAQ: AAPL), Tesla (NASDAQ: TSLA), Microsoft (NASDAQ: MSFT), Meta Platforms (NASDAQ: META) and Alphabet (NASDAQ: GOOGL) losing global growth to Chinese competitors.

The Mag Seven becomes the 'Mag 70'

Tuckwell admits one of his calls for 2026 has not yet worked. He expected the Magnificent Seven to perform strongly this year, but the group has lagged major benchmarks.

He is sticking with them.

One reason is that describing these businesses as seven companies understates what investors actually own. Microsoft alone spans Office, LinkedIn, gaming through Activision Blizzard and cloud computing through Azure.

“We call them the Mag Seven, but realistically it’s more like the Mag 70 because there are many companies within a company.”

Tuckwell says the group continues to grow earnings at roughly twice the rate of the broader S&P 500, while also offering investors significant optionality. Nvidia (NASDAQ: NVDA), for example, is deploying cash into emerging businesses and technologies, effectively giving shareholders exposure to a portfolio of venture-style investments.

That optionality also explains why the circular financing surrounding AI does not yet concern him greatly.

“Were we to see a downturn in AI or the AI trade go belly up, yes, I would start to be a little bit worried, but at the moment it’s just adding more fuel to the fire.”

The next phase of the AI boom

The AI trade itself is also changing. Tuckwell believes markets have moved beyond the first stage, dominated by semiconductor winners such as Nvidia and Broadcom (NASDAQ: AVGO), towards the physical infrastructure required to support the build-out: cabling, cooling systems, generators, energy and data centres.

That could increasingly bring Australian investors onto familiar territory through miners and other businesses supplying the enormous physical requirements of AI.

Copper is one obvious example.

Tuckwell argues this year's record copper prices have been distorted by US tariff fears, as buyers rush material into American warehouses ahead of potential tariffs. That makes the short-term outlook highly political and potentially volatile.

His long-term thesis is much simpler. Years of underinvestment in new mines have left the industry facing a potential supply crunch just as structural demand is accelerating.

“If you are investing in copper, invest for 2035, 10 years from now. Don’t invest for the next couple of months, which are going to be really choppy and driven by politics.”

More broadly, Tuckwell remains positive on Australian resources, even if he is sceptical about some government spending on critical minerals.

“I do think that the wealth creation engine on the ASX remains the miners.”

The difficult part is identifying the next commodity to follow lithium. Fluorite, scandium, vanadium, neodymium and tungsten are all candidates, but Tuckwell makes no attempt to pretend he knows which will emerge victorious.

Gold is a buy, AI is the big bet

One asset where Tuckwell has changed his mind is gold.

He called it a sell last year as retail enthusiasm, leverage and bullish catalysts converged. Today, many of those conditions have reversed. Rates are rising, ETF momentum has weakened and central bank buying has narrowed.

That makes him more interested, not less.

“Gold’s a buy rather than a sell. Although I wouldn’t be surprised if the gold price just sleeps throughout the remainder of the year, simply because a lot of people have been burned on this leg down.”

Yet gold isn't where Tuckwell would make his biggest five-year bet.

Given $100,000 to invest today, his preference remains AI, with Alphabet his standout individual company.

His thesis is ultimately about competitive economics. If one company adopts AI and a competitor doesn't, the adopter should become more productive, forcing others to follow. That makes adoption less discretionary than sceptics might assume.

Within AI, Tuckwell expects more value to accrue at the application layer, where companies own the customer relationship. That leads him back to Google and its combination of data, engineers, profitability and distribution.

“The company that has the relationship with the customer or the client is in the strongest position in terms of margins and bargaining power.”

Asked whether he would really put the entire $100,000 behind that idea, Tuckwell ultimately preferred the diversification of his firm's ETFS US Technology ETF (ASX: WWWW), but his underlying conviction was unchanged.

For all the noise surrounding war, inflation, rates and stretched valuations, he still can't see past AI as the defining investment opportunity of the next five years.