Picking the right ASX shares is starting to look a little trickier.
New analysis from Global X ETFs found that almost half of the top 300 ASX companies underperformed the broader market during August's reporting season.
That might sound surprising, especially with the S&P/ASX 200 Index (ASX: XJO) spending much of 2026 moving higher.
The benchmark index is currently up more than 2% year to date.
But dig a little deeper and there has been a huge difference between the stocks getting rewarded and those being left behind.
So, why has stock picking become so tough?
Image source: Getty Images
No room for misses
August showed just how quickly investors were willing to punish companies that fell short.
Global X senior investment strategist Marc Jocum summed it up pretty well.
"This reporting season was unforgiving," he said.
And the share price moves back that up.
Around half of ASX 200 companies recorded a daily move of at least 5% during August, making it one of the more volatile reporting periods in recent memory.
It also meant a decent result wasn't always enough.
If guidance disappointed or the market had been expecting more, investors were quick to sell.
There was also a big gap in where the earnings growth came from.
Although headline earnings growth was the strongest in 4 years, much of that was driven by resources. But if you take mining stocks out of the equation, earnings growth fell back to single digits.
Winners and losers
There was also a pretty big divide between sectors.
Materials shares rose around 12% during August, while healthcare jumped almost 19%, its best month in more than 25 years.
Consumer discretionary, property and the big banks went the other way, with all 3 areas struggling.
There was some caution about what comes next, with forward earnings estimates being cut across parts of the market.
AI keeps coming up
Another thing that kept popping up during reporting season was artificial intelligence (AI).
Global X found around 60% of companies mentioned AI on earnings calls, with most talking about how it could improve productivity.
That's a pretty big number and shows AI is no longer just a topic for tech companies.
But Jocum's broader takeaway was probably the more important one for investors.
He said "the market is no longer a rising tide lifting all boats".
That feels pretty accurate after August.
There are still plenty of opportunities on the ASX, but investors may need to be a lot more selective about which stocks they back.
