Copper's AI Boom Lifts BHP (ASX:BHP) to Record Highs- What Investors Need to Know

Something big just happened at BHP Group (ASX: BHP), and it's not just the profit beat.

On 17 February 2026, the Big Australian reported half-year results that blew past expectations. Shares jumped more than 7% to a fresh all-time high of A$54.20. But the real story isn't the share price. It's what's happening underneath.

For the first time in BHP's history, copper earned more money than iron ore. Copper made up 51% of the company's total operating earnings, up from around 20% just three years ago. That's a massive shift for a company long known as an iron ore giant.

So what's behind this change? In short: artificial intelligence.

Why Copper Demand Is Surging

You've probably heard about the AI boom. What you might not know is just how much physical infrastructure it requires. Every AI data centre needs enormous amounts of copper for wiring, cooling, and power systems. Some estimates suggest a single large data centre can use up to 50,000 tonnes of the red metal.

Add to that rising demand from electric vehicles, solar panels, and grid upgrades, and you start to see why copper is becoming one of the most sought-after commodities on the planet.

The problem? Supply isn't keeping up. New mines take decades to develop, existing operations in Chile and Indonesia have faced disruptions, and ore grades are declining. J.P. Morgan expects copper prices to stay elevated through 2026, with supply deficits likely later this decade.

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What BHP Actually Delivered

The numbers were impressive. Underlying profit rose 22% to US$6.2 billion, comfortably ahead of analyst expectations. Cash flow came in at US$9.4 billion, and the balance sheet remains in solid shape.

The real crowd-pleaser was the dividend of US 73 cents per share, which was 46% higher than last year and well above the 63 cents the market had pencilled in. That's a 60% payout ratio, signalling management's confidence in what lies ahead.

BHP also lifted full-year copper production guidance to between 1.9 and 2.0 million tonnes, a significant upgrade of 150,000 tonnes over two years. CEO Mike Henry noted the company doesn't feel pressure to chase acquisitions because its growth pipeline across Chile, Argentina, Arizona, and South Australia is already strong.

BHP also announced a landmark US$4.3 billion silver streaming deal with Wheaton Precious Metals, part of broader agreements unlocking over US$6 billion in cash. That extra firepower helped fund the bumper dividend.

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What Could Go Wrong?

No stock is without risk, and BHP has a few things worth watching.

Iron ore remains under pressure. China's property sector is still sluggish, weighing on steel demand and iron ore prices. BHP's iron ore costs crept up 7% during the half.

Then there's the Jansen potash project in Canada, which won't generate revenue until mid-2027. Stage 1 costs have risen to US$8.4 billion, up from a previous range of US$7.0 to US$7.4 billion.

On copper, possible US tariffs on refined imports could shake up global pricing. And with shares having rallied roughly 57% since April 2025, the good news may be partly priced in. The analyst consensus currently sits at "Hold".

The Bottom Line

BHP's copper pivot is working. AI-driven demand, tight supply, and a world-class asset base give the company a strong runway. But with shares at record highs, the key question is whether the current price leaves enough room for new investors.

For deeper research on ASX mining stocks, ASR's [Resources Portfolio] covers Australian producers with detailed cost and production analysis.

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