Tech vs. Resources: Where Should Australian Investors Place Their Bets?

Mining giants like BHP, Rio Tinto, and Woodside, alongside mid-tier growth names such as Pilbara Minerals and Sandfire Resources, have long been the backbone of the ASX. Their fortunes are tied to global demand for commodities — iron ore for China’s construction boom, lithium for the electric vehicle revolution, and copper for renewable energy infrastructure. When global demand rises, resource stocks tend to rally sharply; when it softens, they can fall just as fast.

In recent years, however, a different story has been unfolding. A new wave of technology companies has carved out significant space on the ASX. Firms like WiseTech Global, Xero, and NEXTDC have grown into multi-billion-dollar enterprises, offering investors a type of exposure that historically was absent in Australia: scalable, high-margin, globally competitive tech. These companies generate revenue not by digging commodities out of the ground, but by selling cloud-based services, logistics platforms, and data infrastructure that are critical to the digital economy.

The contrast between the two sectors is striking. Resources are cyclical, heavily influenced by macroeconomic conditions, geopolitical tensions, and commodity price swings. Investors can see huge returns in commodity bull markets, but face equally sharp downturns when supply outpaces demand or when policy shifts impact trade. Tech companies, by comparison, offer exposure to structural, long-term trends like digitalisation, automation, and artificial intelligence. Their revenue models are often recurring, which can provide greater visibility and stability. But tech comes with its own risks — valuations can run high, profitability may lag growth, and sensitivity to interest rate moves can lead to sharp corrections.

So, where should investors place their bets? The answer may lie in balance rather than exclusivity. A portfolio anchored in both sectors provides a blend of cyclical torque and structural growth. Resources deliver exposure to the global energy transition, with lithium, copper, and nickel demand set to remain elevated as electrification accelerates. At the same time, tech names like NEXTDC and WiseTech offer participation in megatrends like cloud infrastructure and digital supply chains, areas where demand is less tied to commodity cycles and more to long-term global adoption.

For Australian investors, the opportunity is unique. Few markets in the world offer such a concentrated choice between two distinct engines of growth: the physical economy of commodities and the digital economy of technology. Building exposure to both allows investors to hedge against the risks of either sector on its own while retaining the potential for outsized returns. In today’s volatile environment, that kind of balance may prove more valuable than choosing one side of the equation.