Over the past yr, the FTSE 100 has skilled a splendid yr, with the index rising by 18.3%.
Nevertheless, I don’t own any ETFs associated to the Footsie. The truth is, I only own one share in the complete index.
That doesn’t imply I’m not a fan of its numerous constituents, as a result of I very a lot suppose there are nice alternatives out there in it to traders.
So why is Rio Tinto (LSE:RIO) the only FTSE 100 share I own right now?
My technique
In my stock portfolio, I have a coverage of only actively shopping for eight shares at anybody time.
Right now, Rio Tinto is one in all my eight favorite shares, with no different Footsie stock making the reduce.
However there are greater than eight nice shares on the earth. So simply because no different shares within the index are on my record doesn’t imply there aren’t any nice selections in it. A few of them embody:
- Rolls-Royce
- Lloyds
- Rightmove
I suppose all of those are nice firms with vivid futures forward. Significantly Rolls-Royce, which I suppose has top-of-the-line progress prospects out of all UK firms.
All of its divisions have sturdy catalysts that would propel its shares additional. For instance, I significantly just like the plane engine producer’s investments in small modular reactors.
It’s really one in all my favorite firms. It’s simply not in my prime eight in the meanwhile. Nevertheless, I nonetheless consider traders ought to think about wanting into the corporate additional for his or her own stock portfolio.
However what makes Rio Tinto so particular?
Finally, my favouritism for Rio Tinto shares boils all the way down to synthetic intelligence (AI).
I suppose AI goes to have a transformational impact on individuals’s lives and the way they work, just like the Industrial Revolution.
Whereas the mining big itself isn’t straight an AI firm, its operations function the place to begin for the AI revolution to happen.
To ensure that AI techniques and software program to work, AI information centres and chips should be in place. And for AI information centres and chips to be constructed, essential metals similar to copper and aluminium should be mined and equipped.
Rio Tinto has a strategic benefit on this space. Its Oyu Tolgoi mine in Mongolia has one of many world’s largest copper deposits.
Moreover, final Friday (29 Might), the corporate introduced it began the commissioning of its $1.5bn low-carbon aluminium smelter in Quebec, Canada. This could improve the plant’s capability by 160,000 metric tonnes to 220,000 metric tonnes.
In time, this could end in future earnings progress.
Robust outcomes
Commodity costs may be fairly risky. As the present geopolitical setting itself is risky, this might damage the agency’s earnings within the brief time period.
Nevertheless, I consider the expansion in AI is already having a constructive impact on the corporate’s earnings. In its 2025 outcomes, underlying EBITDA (earnings earlier than curiosity, tax, depreciation, and amortisation) from copper rose by 114% to $7.4bn, and for aluminium and lithium, it went up by 29% to $4.6bn.
Furthermore, in its first-quarter manufacturing replace for 2026, the miner’s copper manufacturing rose by 9%.
These are good indicators for the corporate’s long-term prospects, particularly as AI progress ramps up. General, that’s why I suppose traders ought to think about shopping for Rio Tinto shares.
Must you make investments £5,000 in Rio Tinto Group right now?
When investing knowledgeable Mark Rogers and his staff have a stock tip, it may possibly pay to hear. In spite of everything, the flagship Twelfth Magpie Share Advisor e-newsletter he has run for practically a decade has supplied hundreds of paying members with prime stock suggestions from the UK and US markets.
And right now, Mark thinks there are 6 standout shares that traders ought to think about shopping for. Need to see if Rio Tinto Group made the record?
Muhammad owns shares in Rio Tinto.
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