This article is based on Contrarius’ Q4 2025 Quarterly Investor Commentary, you can read the rest of the commentary here.
We are in the midst of profound disruption. This is likely to be beyond a typical generational disruption that happens every 20-30 years. This technological singularity is expected to cause dramatic and irreversible changes to human civilization, far beyond typical generational disruptions such as electrification, the internet, or even current generative AI.
The disruption from real-world AI (autonomous driving and robotics) and—ultimately—artificial general intelligence is expected to change most aspects of society. As contrarian, value investors we believe the opportunities are immense. This is indeed a stock pickers market.
We see the total universe of listed shares falling into three broad buckets: AI winners, AI-proof and AI-threatened.
AI Winners: These companies are likely to be the biggest beneficiaries of the technological changes that are upon us. They are, however, not always obvious and the expected winners may shift over time given the extremely competitive AI environment. Companies perceived as winners today may ultimately be displaced. One needs to be nimble and keep an open mind on changes in relative competitive positions. Being unemotional is essential. Fortunately, we are.
AI-proof: While no companies are truly AI-proof, there are companies whose business models and products are likely to endure—and perhaps even thrive—in the face of AI disruption. These are companies that are likely to stand the test of time. They may even be facing short term challenges and currently be out of favour, but the long-term future looks considerably better than those facing disruption.
AI-threatened: It may surprise people, but the third bucket of shares that we spend a significant amount of time on are—hopefully—NOT in the Fund. These are companies whose businesses are soon to be disrupted. Our level of confidence regarding the extent of disruption may vary.
They range from companies that we have a very high level of confidence in total disruption to those with a reasonably high level of confidence of disruption to those where we have a medium level of confidence of disruption.
There are also companies that appear to be AI winners now but where we believe the benefit is illusory or only short-term—these are perhaps the most dangerous investments in the market.
Summary: This is not meant to be a comprehensive description of our approach to the current market—but it does illustrate our thought process at this crucial time. As always, valuation discipline remains critical. We remain focused on identifying the shares that offer the most compelling margin of safety and where their competitive advantages (AI-related or otherwise) are in our view, underestimated by the market. The Contrarius Global Equity Fund and Contrarius Global Balanced Fund have both meaningfully outperformed their respective benchmarks since the funds’ inception—17 years ago and we believe the current market looks favourable for bottom-up stock pickers like ourselves.
If you want further information on the companies Contrarius places into each of the above buckets, please visit our website here.
Disclaimer:
This is a financial promotion/marketing communication. Past performance is not a reliable indicator of future results. Fund share prices fluctuate and are not guaranteed. Returns may decrease or increase as a result of currency fluctuations. When making an investment in the Contrarius Funds, an investor’s capital is at risk. This article does not constitute advice nor a recommendation to buy, sell or hold, nor an offer to sell or a solicitation to buy interests or shares in the Contrarius Funds or other securities in the companies mentioned in it. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research. The Contrarius Funds, entities and employees of the Contrarius Group are not subject to restrictions on dealing in relevant securities ahead of the dissemination of this article. Information in this article is based on sources believed to be accurate and reliable and provided “as is” and in good faith. The Contrarius Group does not make any representation or warranty as to the accuracy, reliability, timeliness or completeness of the information in this article. The Contrarius Group disclaims all liability (whether arising in contract, tort, negligence or otherwise) for any error, omission, loss or damage (whether direct, indirect, consequential or otherwise) in connection with the information in this article. Please refer to the relevant Contrarius Fund’s Prospectus, Supplemental Prospectus and Key Investor Information Documents and seek your own independent financial advice tailored to your personal circumstances before deciding whether to invest in the Fund. These documents are available from www.contrarius.com.
Approved for issue (February 2026) in the United Kingdom by Contrarius Investment Advisory Limited which is incorporated in England (company number 6581705) and is authorised and regulated by the Financial Conduct Authority. Registered office: 22 Chancery Lane, London, England WC2A 1LS.
