Nick Griffin: The good, the bad and the ugly

This week we surveyed the Livewire audience and asked how they were feeling about markets. 43% were bearish, 41% neutral, with just 17% of respondents remaining bullish. It makes perfect sense against the current backdrop.

Nick Griffin, Chief Investment Officer at Munro Partners, always views the world with a glass-half-full approach and is perhaps the ideal guest to calm a few nerves. Griffin believes that we’re still in a bull market and, from his perspective, it has further to run. Corrections are a normal part of markets, and we’re experiencing one now, just like we did in April 2025.

The bull market, in his view, is in its fourth year and could extend for five to ten years, fuelled by parabolic growth in businesses like OpenAI and Anthropic.

“The bull market at this point in time is very much being driven by AI and the AI Capex build out. Until that finishes we struggle to see how the bull market finishes.”

But even Griffin has dialled back his exposure to the market over the past 12 months. That’s partially a function of some strong recent years, but also reflects a growing list of risks, including disruption in technology stocks and, more recently, the war in Iran choking global oil supplies.

In this episode of The Rules of Investing, Griffin explains how he is assessing the disruption to global oil supplies, why he believes the bull market has further to run, and how the rapid growth in AI is forcing a rethink on parts of the technology sector.

Click on the player to listen or read a summary below.

The good: The bull market has further to run

Griffin’s starting point is that context matters. In his framework, the current bull market began in October 2022. The past two years have delivered strong returns, but he does not see that as a reason to become defensive. Instead, he views it as a market that is maturing, not ending.

That does not mean staying fully invested at all times. Munro has reduced its net exposure and is holding more cash than it was 12 months ago. Griffin describes that as a natural evolution through the cycle rather than a shift in view.

“The reality is we’re probably four years into a bull market now… over time the bull market matures and you maybe want to have a little bit more cash on the sidelines for these corrections.”

He points to the sell-off around “Liberation Day” in 2025 and the current bout of volatility linked to Iran as examples of events that have created uncertainty without changing the broader trend.

That trend, in his view, continues to be driven by the rapid adoption of AI and the investment required to support it. As long as that build-out continues, Griffin believes it is difficult to make a case that the bull market is over.

The bad: The war in Iran is bad, but it will pass

While Griffin remains constructive on markets, he is clear that the current geopolitical backdrop is not something to ignore.

“It is bad.”

His perspective is shaped by his early career as an oil and gas analyst, where the Strait of Hormuz was always considered the key pressure point for global energy markets. 

“If you take somewhere between 5-20% of the oil exports off the market, then the only way to balance the market is for demand to go down. The only way for demand to go down is for the price to go up a lot.”

That dynamic is already playing out, with higher prices flowing through oil, LNG and fertilisers. Griffin notes that energy specialists are taking the situation more seriously than broader equity markets, which have so far remained relatively resilient.

“You can say whatever you want but the ships need to go through the Strait of Hormuz. Every day the ships don’t go through, this gets worse.”

“We’re tracking ships through the Strait of Hormuz like you were tracking COVID cases during COVID.”

On the day of the interview, only five ships had passed through, well below the roughly 30 per day required to keep markets functioning normally.

Despite the near-term disruption, Griffin’s base case is that the situation will resolve. It is in the interest of all parties, including Iran, for the Strait to reopen and for oil flows to resume.

The ugly: Software is “off limits” for now

If the good is reassuring and the bad is manageable, Griffin’s view on software is far more confronting.

“We think this is the big deal in markets right now and one you need to get a view on.”

Griffin believes that markets are going through a platform shift. Just as the move from paper to computers and then to smartphones created new winners and disrupted incumbents, AI is now reshaping how information is accessed and how value is created.

The speed of that shift is what is rattling investors. Griffin points to the growth of AI models as evidence of how quickly things are changing.

Anthropic has grown to around US$25 billion in annual recurring revenue, up from US$9 billion at the end of last year and US$1.4 billion the year before. Combined with OpenAI, these businesses are now generating more than US$50 billion in annual recurring revenue and growing rapidly.

“Anthropic and OpenAI are adding more dollars per month than the entire tech ecosystem today. Every single software company in the world is adding less than half.”

“It’s not that the software revenues have disappeared. They’ve just moved.”

Griffin says the firm initially believed AI would sit on top of existing software platforms and accelerate growth. Instead, a disciplined review process led them to question that assumption.

“The more we reviewed our software investments… the more we realised that we didn’t actually know how this was going to work out.”

That uncertainty, combined with high valuation multiples, made it difficult to justify holding positions.

“From there we couldn’t work out why we would pay 45 times earnings for something where we didn’t know what was going to happen.”

The issue is not just valuation. It is also structural. Many software companies operate on per-user pricing models, while AI is shifting towards consumption-based pricing. At the same time, the durability of their competitive advantages is being challenged.

Griffin also makes the point that markets may not have fully priced the earnings risk.

“All they’ve done here is lost multiple. You actually haven’t even got to the earnings cuts.”

For now, that leaves the sector in the too-hard basket.

“From our point of view we think the whole space is off limits for a little while. I’m not saying it’s not going to work out. It could easily work out. I’m just saying it’s going to take time.”

Where Munro Partners is investing today

Griffin’s overall message remains constructive. He believes markets are underestimating how much runway is left in the AI build-out and the impact that will have across the global economy.

“The AI Capex build out is not peaking. It’s actually just starting.”

Rather than trying to pick winners in software, Griffin is focused on the parts of the market that sit underneath it. The businesses enabling this shift, rather than those trying to monetise it. That means semiconductors, power and the infrastructure required to support the exponential growth in compute.

Griffin’s top picks for the next five years are NVIDIA (NASDAQ: NVDA) and TSMC (NYSE: TSM). NVIDIA sits at the heart of the AI ecosystem. Its chips are the engine room behind the large language models driving this shift. Every incremental dollar spent on AI infrastructure ultimately flows through NVIDIA in some form.

TSMC, meanwhile, is the critical manufacturer. It produces the most advanced chips in the world and, importantly, does so for everyone. Whether it’s NVIDIA, AMD or the hyperscalers developing their own silicon, the production bottleneck runs through Taiwan.

In Griffin’s words, if AI is the new industrial revolution, then semiconductors are the new oil.

Listen to the full episode by clicking here.