“I want the volatility”: Josh Cummings sees opportunity in the AI shakeout

Please note this interview was filmed on 21 October 2026.

Most active funds are built around a portfolio manager’s view of the world, but Janus Henderson’s global research strategy works the other way round.

"What we seek to do is live and die with our stock picking," says Joshua Cummings, who co-manages the portfolio and leads the firm's US consumer research team. 

"We think stock selection is something that investors should pay for. We don't think beta is something that investors should pay for."

Its 40-plus analysts are split into global sector teams. Each team builds a high-conviction portfolio of its best ideas, regardless of company size, sub-sector or geography, and every idea and position size is debated before it goes in. 

That means a stock earns its place on its merits, not because of how much of the index it takes up.

The sector portfolios are then combined into one fund, with sector weights kept in line with the benchmark. The aim is to minimise macro calls so that stock selection drives returns.

In other words, investors shouldn't pay active fees for returns they could get from the market itself. 

Cummings and his co-portfolio manager turn the analysts' ideas into an efficient portfolio, mostly by adjusting position sizes rather than rejecting stocks. "We almost never have to say no to an analyst," he says.

A good set-up

Cummings says 2026 started well, particularly for the consumer, communication services and tech stocks he follows. Rates were falling and the US economy looked on track for a soft landing. Then war broke out and oil climbed above US$100 a barrel.

Surprisingly, he calls that "a bit of an issue, but really just a bit of a side note as far as the consumers are concerned."

Consumers in most developed economies remain in relatively good shape, he says. The pressure is at the margin, as years of cheap debt give way to a rising cost of capital - a change he welcomes. 

"When money is free, bad ideas get funded, bad economic decisions are made," he says.

His central case is still a soft landing, and he isn't betting on higher inflation or interest rates. "The right oil price is not US$110. I promise it's lower."

Somewhere in the middle

Cummings says markets have become prone to extreme narratives, particularly on AI.

"They want things to be binary. Either AI is going to kill us in five months or it's going to be nirvana for the next century. It's like you pick your poison. No. The truth is clearly somewhere in the middle. And the alpha is in the nuance."

That middle ground is where he spends his time. He doesn't dismiss the strain in AI-linked capital markets, which he describes as "naked swimmers" exposed as the tide goes out. Locally that might be Firmus, and in the US it's neocloud operators such as CoreWeave (NASDAQ: CRWV) and Nebius (NASDAQ: NBIS). Instead of panicking, his team is turning tactically bullish.

He sees AI as a 20-year journey with "probably 20 tragedies and euphoric stories and sagas" along the way. 

"There's sine waves inside of sine waves on a long upwardly sloping trajectory."

Retail shows why he doesn't buy the doom scenario. "We've owned some of our companies for 30-odd years. We've seen threats to their business models come and go. E-commerce was going to destroy retailing. I guess it hasn't, right?"

A prime example of this is Walmart (NASDAQ: WMT); its share of US retail sales has sat at about 12% for decades. 

What e-commerce did instead was concentrate the market. Around 20% of US retail now happens online, and within that, Amazon holds roughly 40%. The industry wasn't wiped out, instead it has reshuffled, and the winners became more dominant.

"I bet on humanity," he says. "I think investing based on end of the world scenarios is a really hard way to make a living because you're kind of betting on something that has yet to happen."

A business to own forever

He says one of the marching orders he gives his team is to look for a different kind of consumer business model. 

This same approach led Janus Henderson to Formula One, which it began investing in eight years ago when Liberty Media (NASDAQ: FWONA) bought the sport from its private equity owner. 

The team took notice partly because of Liberty Media chairman John Malone's track record, including buying baseball's Atlanta Braves.

"Formula One to me is this perfect example of a forever business because it's not really about hard assets. It's not stores.

"We don't own race cars. We don't even own racetracks. We just own the global rights to the second or third largest sport in the world."

He also points to the audience. "It is the fastest growing sport on social media, five years running. It's one of the only large sports that is both getting younger and more female in its demographics."

And it can't easily be copied. "There's never going to be a racing series that tops Formula One. It's 76 years old. It is the pinnacle of the sport. We like scarce assets."

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