Monthly Outlook: CBA, Nuclear, Quantum

A pause on US President Donald Trump’s tariff wars, strong corporate earnings and falling interest rates helped ASX stocks to post a second consecutive month of gains in May.  

Pushing the Australian benchmark index closer to an all-time high was the Commonwealth Bank of Australia [CBA], whose lofty valuations do not seem to worry its investors. In the US, an energy-hungry artificial intelligence (AI) sector and favourable regulations are bringing nuclear power and utilities stocks back into vogue. Meanwhile, an up-and-coming technology has given investors something to think about. Here are the three stories to follow in June. 

CBA momentum powers ASX comeback

The S&P/ASX 200 index closed the month of May about 2% below its record high of 8,615 points, hit in February 2025. After crashing violently in early-April 2025 in the wake of President Trump’s tariff announcements, Australian equities have staged a strong recovery. Leading the charge was CBA, the largest publicly listed company in Australia. 

The banking heavyweight was trading at record-high prices of over A$176 at the end of May, having surged almost 17% since the start of the year. Strong quarterly earnings allayed fears of the company’s overheated valuation as the bank reported a 9.1% quarter-over-quarter surge in business loans to A$3.7bn, 1.3 times the sector average. Customer deposits made up 77% of total funding, CBA reported.  

Since the start of the year, market analysts have highlighted the perceived overvaluation of CBA, with S&P Global suggesting the stock could fall by up to 23%. CBA has defied such predictions and has instead extended its gains. At the time of writing, CBA commanded a higher P/E ratio (30.25) than its “Big Four” peers: Westpac Banking Corp [WBC] (16.41), ANZ Group [ANZ] (13.00) and National Australia Bank [NAB] (16.86).    

^{Chart: One-year performance of major Australian banks (Google Finance)}

How long will CBA’s bull run continue? Experts are sceptical, with 10 out of 15 analysts rating CBA a ‘sell’, according to data compiled by the Wall Street Journal. Analysts at Morningstar Research said that CBA stock closed at a 45% premium to its estimated fair value price of $76.26 in the last trading session of May. 

Elsewhere, dual-listed technology company Life360 [360] extended its year-to-date gains to over 50% after it reported a 32% year-over-year increase in quarterly revenue. The company said that its Life360 mobile application, which lets users share real-time locations with friends and family, saw monthly active users surge to a record high in the first quarter of 2025. See our full report on the stock for more insights.

In the Australian mining sector, Mineral Resources [MIN] continued to display intense volatility as the stock closed the month of May 7.7% higher, only to slump 11.8% in the first trading session of June. Back in February, the stock experienced its worst day in 16 years after cutting its fiscal 2025 production volume. In late May, the Australian Financial Review reported that Mineral Resources’ 330-tonne road trains were being forced to drive at slow speeds between its flagship iron ore mine and a port, which could hurt shipping targets. 

Nuclear stocks light up in May

Shares of nuclear power companies in the US surged in May after President Trump signed an executive order to deploy advanced nuclear technologies to support the development of AI and national security-related industries. The order directed the US Secretary of Energy to release at least 20 metric tonnes of uranium to private sector projects, some of which operate nuclear reactors that power AI infrastructure at government facilities. 

Oklo [OKLO] was among the top gainers within the nuclear energy sector: the power plant operator saw its share price surge by over 122% in May. Nuclear fuel components supplier Centrus Energy [LEU] followed suit with an 83% monthly gain.  

One way investors track the nuclear energy sector is through index funds such as the Global X Uranium ETF [URA], which closed 28% higher in May. Australia-based asset manager Betashares has listed a thematic fund called the Global Uranium ETF [URNM] that invests in uranium mining companies such as Canada-based Cameco [CCJ], London-listed Kazatomprom [59OT] and Australia’s Boss Energy [BOE]. 

According to the US Energy Information Administration (EIA), power consumption in the world’s largest economy is expected to hit record levels in 2025 before further increasing in 2026. The growth of the energy-hungry AI industry is expected to be the main driver of this trend, with big tech firms Microsoft [MSFT] and Amazon [AMZN] moving fast to secure nuclear power supply deals for their data centres. 

The booming electricity demand in the US has also spurred dealmaking activity, with utility companies buying assets to boost their power generation capacity. 

Shares of NRG Energy [NRG] surged to an all-time high in May after the company spent $12bn to buy natural gas-fired facilities from LS Power to support “a power demand supercycle”, as described by CEO Larry Coben. Earlier this year, Constellation Energy [CEG] — the operator of the US’ largest fleet of nuclear power plants — signed one of the biggest deals in the history of the US power industry to buy natural gas and geothermal company Calpine for $16.4bn. CEG shares jumped 37% in May. 

Elsewhere, shares of portable and microreactor developer Nano Nuclear Energy [NNE] closed the month 32% higher, miner Uranium Energy [UEC] jumped over 12%, and rare earth minerals supplier Energy Fuels [UUUU] climbed 8% in May. 

Quantum hype lifts off again

Having made waves earlier in the year, quantum computing returns to the spotlight in June amid renewed momentum in the sector. Quantum computing is an emerging computer science technology, able to solve complex problems and process data far beyond the ability of classical computers. First proposed in the 1980s, quantum computing is still in its early stages of development. Key players within the quantum computing sector include Alphabet [GOOGL], IBM [IBM], Microsoft [MSFT] and Fujitsu [6702].  

How vast is the performance difference between quantum computers and classical computers? According to Google, its latest quantum chip, Willow, introduced in December 2024, is capable of performing a computation in under five minutes that would take the fastest existing supercomputers 10 septillion years. Despite such advancements, experts agree that quantum computing technology has not fully matured yet, with IBM saying that the company will be able to “unlock the full power of quantum computing at scale” after 2033. 

On May 20, 2025, New York-listed D-Wave Quantum [QBTS] made headlines by announcing the general availability of its commercial-grade Advantage2 quantum computing system via a cloud service. The system was also available to purchase for on-premises ownership. QBTS stock has increased by about 95% in the first five months of 2025, and is up by more than 1,100% from a year ago. 

As might be expected from an emerging tech company, D-Wave is still not profitable. According to the company’s Q1 earnings report, quarterly revenue stood at $15m, up 509% from a year ago. Quarterly net loss came in at $5.4m, versus $17.3m a year ago. As of March 31, 2025, D-Wave had a total of 133 commercial customers worldwide, consisting of corporate clients, research organisations and government bodies. 

Other notable stocks within the quantum computing sector include pure-plays such as Quantum Computing [QMCO] and Rigetti Computing [RGTI]. Meanwhile, Nasdaq-listed ZenaTech [ZENA] develops quantum computing solutions and drones for agricultural, logistics and defence use cases.  

Thematic ETFs such as the Defiance Quantum ETF [QTUM] offer exposure to companies involved in quantum computing technology. In May 2025, VanEck became the latest asset manager to introduce a quantum computing ETF, called the VanEck Quantum Computing UCITS ETF [QUTM:DE]. VanEck’s ETF will give investors exposure to 30 companies that it considers “pure-play innovators and global patent leaders” in the space — D-Wave, Rigetti, IBM, Microsoft and Alphabet among them.  

Nevertheless, investors should note that experts, including ARK Investment Management’s Sam Korus and Nick Grous, believe that quantum computing technology is at least a decade away from commercial viability. 

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