Macquarie: AI is driving the earnings boom - own these ASX stocks, avoid the banks

August reporting season is still several weeks away, but Macquarie already thinks one theme will separate the winners from the losers.

"It might not feel like it, but AI capex is driving an earnings boom. EPS forecasts are rising at a 15% clip. That's half the US, but still good," the broker says.

That's the central message from the its latest reporting season outlook, which argues Australia's profit outlook is quietly improving as global investment in artificial intelligence flows through to resources, power infrastructure and data-centre supply chains.

"Our team sees EPS growth of +9.6% in FY26 and +11.1% in FY27," Macquarie says, with resources now leading earnings upgrades after dragging on the market for much of the past two years.

The broker believes that shift will become increasingly important over the coming reporting season. While investors have recently rewarded companies with weak earnings momentum on hopes that interest rates will eventually fall, Macquarie argues sustainable outperformance will once again come from companies delivering genuine earnings upgrades.

Here are the key themes - and the stocks - the broker is backing ahead of August.

Don't buy weak earnings just because they're cheap

Despite the improving earnings backdrop, Macquarie isn't convinced investors are positioned correctly.

"The market has been buying stocks with poor momentum and downgrades recently," it says.

"This works best when investors can look through weak earnings because rates are falling and multiples are expanding. For many stocks, we think the market is making this move too early."

Instead, the broker argues higher interest rates remain an underappreciated risk. Even if the RBA doesn't raise rates again, restrictive policy could continue weighing on consumer spending, housing activity and corporate earnings through the first half of FY27.

"Global rates are rising, the RBA is still inflation constrained, and we think the market is underpricing the risk of another RBA hike. But even if the RBA remains on a restrictive hold, this could lead to downgrades to 1H27 earnings forecasts," Macquarie says.

In other words, relief that the Middle East conflict has eased may have supported markets in recent weeks, but sustainable outperformance will require genuine earnings upgrades rather than simply results that are a bit better than feared.

Follow the earnings upgrades

With earnings becoming increasingly important, Macquarie favours three broad themes heading into reporting season.

Higher-for-longer winners

Macquarie favours QBE (ASX: QBE), Suncorp (ASX: SUN), Challenger (ASX: CGF), Medibank Private (ASX: MPL) and Computershare (ASX: CPU). These stocks currently offer yields between 2.77-4.38%, according to Market Index data.

While these businesses operate in different industries, they generally stand to benefit if interest rates remain higher than investors expect.

For insurers such as QBE, Suncorp and Medibank, higher interest rates typically boost investment income because customer premiums are invested in fixed interest securities before claims are paid.

Challenger also benefits from higher bond yields, which improve returns on the assets backing its annuity business, while Computershare earns interest on client balances held within its corporate trust and registry operations.

Defensive income

For investors seeking dependable earnings and income, Macquarie continues to favour Aurizon (ASX: AZJ) and APA Group (ASX: APA), which currently yield 4.52% and 5.64%, respectively, with varying levels of franking.

Both businesses operate infrastructure assets under long-term contracts, providing relatively stable cash flows regardless of broader economic conditions. That defensive profile can become particularly attractive if reporting season delivers weaker-than-expected earnings elsewhere.

AI ENABLERS

Macquarie's preferred AI exposure remains Goodman Group (ASX: GMG), which has a current yield of 0.93%.

Rather than betting directly on AI software or semiconductor companies, Goodman provides the industrial property and logistics infrastructure increasingly required to support data centres and cloud computing.

"AI enablers delivered the strongest EPS trends last season and should remain supported by AI capex. Prices will be volatile, but AI demand is visible in capex, power, Resources and data-centre supply chains," Macquarie says.

"In August, we will be looking for further evidence of AI impacts on revenue and margins, not just talk of AI initiatives."

Stocks where Macquarie sees earnings surprises

The broker also highlighted companies where its own FY27 forecasts differ materially from broader market consensus.

Potential upside surprises

• James Hardie (ASX: JHX)
• WEB Travel Group (ASX: WEB)
• GrainCorp (ASX: GNC)
• Dexus (ASX: DXS)
• Coles (ASX: COL)
• Cleanaway (ASX: CWY)
• Universal Store (ASX: UNI)
• News Corp (ASX: NWS)

Potential downside surprises

• Domino's Pizza (ASX: DMP)
• IDP Education (ASX: IEL)
• Insurance Australia Group (ASX: IAG)
• Audinate (ASX: AD8)
• Endeavour Group (ASX: EDV)
• AGL Energy (ASX: AGL)

Why Macquarie still doesn't like the banks

One of the report's other key calls is that Macquarie remains underweight all four major banks.

"Banks (CBA, WBC, ANZ, NAB) remain least favoured given the lingering risk of RBA hikes, headwinds from the budget tax changes, their weak momentum, downgrades and PEs that are still high after the 2024-25 re-rate," the broker says.

Australian banks have enjoyed a significant valuation re-rating over the past two years, leaving them trading on historically elevated earnings multiples despite relatively modest profit growth.

If interest rates stay higher for longer, bad debts edge higher or earnings forecasts continue to drift lower, Macquarie believes investors aren't being adequately compensated for those risks.

Macquarie sees EPS for the sector rising 8.4% in FY27 before collapsing to just 0.6% the following financial year.

Bottom line

Macquarie's central message is that reporting season is likely to separate companies benefiting from genuine earnings momentum from those relying on hopes of lower interest rates.

If the broker is right, AI-related investment will continue to underpin Australia's earnings recovery—but investors should remain selective.

The companies delivering upgrades, rather than simply surviving the reporting season, are likely to be the ones that outperform over the remainder of FY27.