On 18 July, Commonwealth Bank of Australia set another record high of just over $183 per share. Less than a week later, it experienced a sharp decline from its massive new cruising altitude to trade at below $171. The over 6.5% decline has given everyone the same question: is it time to buy CBA?

The question has been asked at every dinner, drinks and BBQ event over the weekend as the CBA share price clawed back some ground towards the close of last week, now hovering around $175 at the time of writing.

It's the right question to ask, too, what with a solid earnings season under our belts underway and global markets calming after weeks of tariff-related headlines. 

On a this week's episode of Switzer Investing TV, founder of Ten Cap, Jun Bei Liu and host Peter Switzer tackled that exact question. While opinions varied, both agreed that the recent dip in CBA’s share price marks an important inflection point.

“It’s down 10% so far this month. Looking at the results, it’s actually not going to be that bad,” Liu said. “Other banks are pretty tough. You know, earnings will probably look a bit tough. But CBA’s going to beat expectations.”

Still, despite CBA’s strong fundamentals, Liu isn’t quite ready to call it a buy—yet.

“Am I a buyer? Yeah, probably not. But I think, you know, if [it drops] another five, ten percent, absolutely going to look at this company, just as a relative trade… I think for a bank to fall 20% without earnings impact is massive. So I think it’s getting close.”

Playing the rotation

CBA’s recent weakness isn’t occurring in a vacuum. Institutional investors have spent the past year sheltering in defensive names like the big four banks—especially CBA—while global markets were gripped by uncertainty over interest rates and international trade. Now that the rhetoric between the US, China and Europe appears to be stabilising, capital is rotating out of financials and into growth-sensitive sectors like mining and healthcare.

Liu noted this trend is already underway.

“CSL is definitely looking a lot more interesting. So far this month, it’s been the beneficiary of people taking money out of banks and putting it into CSL and also some of the resources names.”

Resource giants like BHP, Fortescue and Rio Tinto have rallied in recent weeks as iron ore prices hold steady and lithium regains momentum, driven in part by growing optimism around China’s economy. For fund managers looking for exposure to a broadening bull market, banks no longer look like the safest harbour in the storm—they’re beginning to feel more like a drag on returns.

Still world-class

Peter Switzer, however, reminded viewers not to discount the quality of the business beneath the ticker.

“It’s one of the top 20 banks in the world and one of the safest,” he said, noting that global investors continue to hold CBA for its consistency, yield and dominant market position.

That said, even he admits he’s not a buyer at current levels.

“If I see CBA at $150, I’ll be a buyer again.”

Switzer’s hypothetical price target implies a 14% correction from current levels. Whether it falls that far is anyone’s guess—but if it does, there’s little doubt buyers like Liu and Switzer will be waiting.

For now, CBA may be stuck between two market cycles: no longer cheap enough for the bargain hunters, but not exciting enough for those chasing growth. Investors looking for an entry point may want to wait for more of a shakeout—or a clear sign that the selling is done.