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BHP Surpasses Commonwealth Bank as Australia’s Top Company Amid Commodity Boom
BHP Group Limited (ASX: BHP) has reclaimed the title of Australia’s most valuable company, surpassing the Commonwealth Bank of Australia (CBA) for the first time since October 2024, thanks to a robust commodity bull market. The mining giant’s shares have surged by more than 10% this year, buoyed by soaring iron ore prices and increasing copper values, while CBA’s stock has slid 6.5%, trading at a nine-month low. BHP’s market capitalisation hit an all-time high of $257 billion, surpassing CBA’s value of $251.5 billion.
BHP vs. CBA share price returns (top) and market cap (bottom) | Source: TradingView
For most of the previous decade, BHP lagged behind CBA. However, between 2022 and 2024, BHP restructured into a single Australian entity, which resulted in a rise in its market share and representation on the ASX 200 index, increasing from approximately 6% to near 10%.
Sector Strategy Insights
A UBS report from June 2025 highlighted a pattern showing that once leading stocks peak in weight within their sectors, pursuing less prominent stocks in those sectors typically yields unsatisfactory results. For instance, while ANZ and Westpac have lower price-to-earnings ratios (PE ratios of 18-20x compared to CBA’s 25x) and are under new management strategies, investing in them may not be advantageous.
Historical observations indicate that stocks such as News Corp and CSL experienced significant corrections after reaching peak valuations, which suggests that shifting investment towards lower-performing companies in a high-weight sector may not always be prudent.
The Two Giants of the ASX
BHP and CBA have traded places at the top of the ASX market capitalisation rankings since the 1990s, with no significant competitors emerging. ANZ, Westpac, and NAB follow, valued at roughly half of either BHP or CBA.
Source: UBS
Emerging Trends in the Commodity Market
BHP’s rise is attributed to a broader rally in the commodities sector. Recent trends indicate a significant upsurge:
- During the early to mid-2025 period, gold stocks were prominent in the 52-week highs lists.
- By mid-October, the rally expanded to include copper and rare earth companies like Lynas and Sandfire Resources.
- Iron ore and lithium stocks, including Rio Tinto and Liontown, began achieving new yearly highs.
- High-profile companies such as Fortescue, BHP, and IGO entered 52-week high territory by early November.
- The rally has also included previously underperforming stocks like South32 and Nickel Industries, showing a resurgence in their valuation.
The Bloomberg Commodity Index, which tracks 22 futures across various sectors, broke out of a lengthy sideways trend, signalling renewed momentum in commodity trading.
Bloomberg Commodity Index (Source: TradingView)
Given BHP’s status as the largest resource stock in the market, its ascendance to the top position reflects not only its operational strengths but also the declining valuation of CBA. Despite its diversification, BHP remains predominantly an iron ore producer, with substantial stakes in copper, potash, and nickel.
Source: Macquarie Research, January
With iron ore prices remaining resilient above US$105 a tonne, defying earlier predictions of a drop to US$90, coupled with positive trends across other commodities, this may herald a new chapter for the resource sector in Australia.
