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Hyperscaler debt and leverage are fuelling AI-era risk
The Bank for International Settlements has used its 2026 Annual Economic Report to warn that AI-related borrowing, leveraged non-bank lenders and shrinking fiscal space are now reinforcing each other's risks. The Basel-based institution's annual economic report, published on 28 June, delivered its bluntest financial-stability warning in years, flagging a system reliant on borrowing, leverage and lenders that sit outside the banking net. Four pressure points anchored the analysis: persistent inflation risk after the Strait of Hormuz oil shock, the sustainability of AI investment, growing financial risk beyond the banks, and fiscal positions with less room to move than at any point since the Second World War. "Success depends on sound fiscal and financial foundations," BIS general manager Pablo Hernandez de Cos said. The central bank umbrella group framed the warning as urgent, since most of that funding now runs through lenders outside the banking system.Borrowing funds the buildoutThe five largest U.S. hyperscalers, Alphabet, Amazon, Meta, Microsoft and Oracle, are set to spend more than US$1 trillion combined on AI capex across 2025 and 2026, the report found. That spending is outpacing free cash flow, which is why
Investing
What DRAM's whipsaw says about trading leveraged ETFs
NASDAQ: DRAM has become the market's favourite two-word explanation for almost everything this year - the earnings beat, the capex blowout, and the leveraged ETF that just gave back a fortnight's gains in one afternoon of trading. The demand for memory is real - but so is the Whipsaw - and neither cancels the other out. Roundhill's leveraged memory fund, RAM, touched a fresh since-inception low of $19.92 on 1 July, the third violent swing inside its first fortnight of trading. NASDAQ: RAM is the 2x daily-geared wrapper on the Roundhill Memory ETF weighted toward Samsung, SK Hynix and Micron, and it debuted on 24 June - the same day Micron reported earnings after the close. The base DRAM fund spiked nearly 14% pre-market to $79.70 the next morning, before Seoul's $520 billion fab pledge on 29 June triggered a separate slide that pulled RAM's June close down more than 8%. SanDisk and Micron both slid more than 6% on the Seoul news.The bull caseMicrosoft, Amazon, Alphabet and Meta are guiding toward roughly $725 billion in combined 2026 capex, up 77% YoY, with Microsoft's CFO pinning part of that increase directly on rising memory and component costs. "DRAM is extremely constrained," Micron chief business officer Sumit
Investing
BlackRock weighs US$10bn stake in SpaceX Nasdaq float
The world's largest asset manager, BlackRock, is reportedly in discussions to commit as much as US$10 billion (A$13.99 billion) to what would become the largest stock market listing on record. BlackRock has discussed investing between $5-10 billion in SpaceX's initial public offering (IPO), according to a report published Saturday by The Information, citing people familiar with the matter. The potential commitment would be drawn from BlackRock's $536 billion pool of actively managed funds, sitting apart from the asset manager's far larger passive business, which runs under index-tracking mandates. Elon Musk's rocket and satellite company is targeting a raise of roughly $75 billion at a valuation of approximately $1.75 trillion, a deal that would make it the largest stock market debut on record - surpassing Saudi Aramco's $29 billion float in 2019 by a factor of roughly two and a half.Source: AzzetPricing is targeted for as early as 11 June, with trading on Nasdaq expected to begin around 12 June under the reported ticker SPCX. A five-bank syndicate - Morgan Stanley, Bank of America, Citigroup, JPMorgan and Goldman Sachs - is handling the bookbuild, with an investor roadshow scheduled to begin around 4 June. SpaceX f
Investing
Magellan taps Vinva to manage global equity funds
Magellan Financial has said its A$5.3 billion global equities funds will now be managed by Vinva Investment Management, with shares falling 7.1%. Magellan’s Global Fund strategies will be included in Vinva’s Global Alpha Strategy from early June, pending sharemarket approvals. It will also end all performance fees for the funds. “Today's announcement reflects our commitment to putting clients first and our insight into client needs today and in the future. We have carefully considered this decision and are prioritising client outcomes whilst at the same time positioning Magellan for long-term growth, with an attractive core global equities offering,” said Magellan CEO and managing director Sophia Rahmani. The company will cut the funds’ management fees from 1.35% per year to 0.89%, which it called “a key component of enhancing each Fund’s value proposition”. “The appointment of Vinva – a high-quality investment manager with a strong track record of long-term outperformance for clients – alongside the reduction in Fund fees, strengthens the competitiveness of our global equities offering,” said Rahmani. Magellan holds a 28% stake in Vinva’s parent. According to Magellan, it expects an average fee reduction of 0.55% a
Investing
Greg Abel clears hurdle of first annual company meeting
Greg Abel has led the first annual meeting at Berkshire Hathaway since stepping into the role of CEO. Abel took over from Warren Buffett at the start of the year, after Buffett spent nearly 60 years as the head of the company and founder. Now he has cleared the first major hurdle in the role, the annual company meeting, with a positive reception from investors and shareholders. The meeting was opened with an hour of presenting the mechanics of Berkshire Hathaway's major businesses to attendees, and concluded with a Q&A. “Greg and company delivered on content, examination of businesses and confidence in outlook,” said Macrae Syke, a portfolio manager at Gabelli Funds. The sentiment was echoed by the founder of Check Capital Management, Steve Check, who said Abel was “Very Solid. No misspoke words. Thorough answers”.

Investing
Berkshire Hathaway restarts buy-back as CEO buys stock
Berkshire Hathaway has resumed share buy-backs for the first time in almost two years as new Chief Executive Officer (CEO) Greg Abel begins to reshape the investment conglomerate after taking over from legendary investor Warren Buffett. The repurchases that started this week for the first time since May 2024 show the company believes its shares are trading below their intrinsic value and allow it to use some of its US$373.3 billion of cash. Abel said the repurchases were a long-standing part of Berkshire’s capital allocation strategy and helped generate value for investors over the long term. Berkshire historically buys back shares only when management believes the market price undervalues the company’s underlying businesses. The new Chief Executive Officer also disclosed he purchased 21 of Berkshire’s Class A shares this week for about $15 million. The company usually does not disclose the start of the repurchases. "We felt it was important to communicate to our shareholders, our partners, our owners, with the transition of leadership," Abel told CNBC in an interview. Abel said he intended make more such purchases in the future because it reflected his belief in Berkshire Hathaway’s prospects. Buffett led
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JPMorgan-managed assets leap 18% to $4.6 trillion
JPMorgan Chase & Co. has a record US$4.6 trillion of assets under management, an 18% increase from 2024, driven by increased inflows and market all-time highs. The investment behemoth reported net income of US$13 billion for the fourth quarter (Q4) of 2025 — a result heavily influenced by a multi-billion dollar reserve build linked to its new partnership with Apple. Full-year earnings reached $57 billion, a record for the firm despite a 7% slip in Q4 earnings compared to the prior-year period. And the primary headwind in Q4 was a $2.2 billion credit reserve established for the forward purchase commitment of the Apple credit card portfolio.Quarterly metricsManaged revenue for the fourth quarter stood at $46.8 billion, representing a slight 1% dip from the $47.1 billion reported in Q3. However, net interest income showed momentum, rising to $25.1 billion in Q4 up from $24.1 billion from the previous quarter. This growth was partially attributed to higher revolving balances in Card Services and higher deposit balances, although results were mitigated by the impact of lower rates. Credit costs saw a substantial jump as the provision for credit losses hit $4.7 billion in the final quarter. This was a marked increas
Investing
Citadel to return US$5bn of profits to investors in 2026
Hedge fund Citadel will reportedly return around US$5 billion (A$7.47 billion) in profits to investors at the beginning of 2026, in a bid to lower its assets under management. The fund will begin 2026 with $67 billion in assets after returning these profits, CNBC reported. Including the $5 billion slated for 2026, it has returned $32 billion to investors since 2017. This $5 billion does not comprise all of Citadel’s profits during the year, and the goal is to constrain the hedge fund’s capital, CNBC’s source said. Citadel’s flagship Wellington fund gained 1.4% in November, per Reuters, and had increased by 8.3% across 2025 to date. Its Global Equities fund was also up 13.2% in 2025’s first 11 months, while its Tactical Trading fund grew 16.3% and its Global Fixed Income fund rose 8.5%. Last year, Citadel reported the largest net gains of any hedge fund since inception, at $83 billion. Global hedge fund capital reached a record $4.98 trillion last quarter, according to a Hedge Fund Research (HFR) report. “This historic growth has been driven by a combination of powerful trends, including accelerating M&A, expanding cryptocurrency investment, falling geopolitical risk, expectations for lower interest rates, and
Investing
Outperformance: Goldilocks markets lift hedge funds 15%
Heightened market turbulence, underpinned by a wide variation in the performance of individual assets, macro volatility, and higher interest rates have created conditions just right for typically high-fee charging global hedge funds to prove their worth. While they don’t always get it right, global hedge funds try hard to earn their keep – through superior stock-picking and quant strategies – when the going gets tough. Ultimately, what hedge funds are trying to do is to align their own interests, a la through higher fees, with their investors’ by significantly outperforming broader market indices. Figures for 2025 through to the end of November suggest global fund managers are finally in the money with returns up around 15%, according to a recent Goldman Sachs report. Hedge funds outpace multi-strategy rivalsThanks largely to chunky gains in healthcare and a tilt toward United States markets, hedge funds have outpaced several big multi-strategy rivals and even major stock indexes. A granular look at Goldman’s data suggests that in November, long and short funds demonstrated resilience by navigating a sharp selloff in technology stocks to post gains of 1.1%. These hedge funds outperformed major indices such as the S&