If you’ve been watching the CBA share price, you’re not alone in wondering why it’s still trading so high.

Despite volatility in other parts of the market—particularly in the resources sector—Commonwealth Bank of Australia (ASX: CBA) has remained remarkably resilient. It’s not just holding its ground; it’s doing so with a yield that’s now fallen below 3%. That’s left more than a few investors questioning the upside from here.

On this week’s episode of Switzer Investing TV, Paul Rickard and Peter Switzer dug into what’s driving the stock—and whether it still makes sense to hold.

Press play on the below video to jump to Peter Switzer and Paul Rickard talking about the CBA share price:

But Rickard isn’t convinced that logic holds for retail investors. "It’s now yielding less than 3%. You might as well be in a term deposit!

A sign of broader market caution

According to Rickard, institutional money flowing into CBA is a signal in itself. It reflects a market still unsure about the outlook, despite recent rebounds in US and Australian equities.

"When investors stay in names like CBA, Transurban, and Telstra, it tells you they’re still cautious," he said. "We’re seeing rotation—ANZ, for instance, has started to move—but there’s a reluctance to let go of the safety trade."

Peter Switzer agreed. "The CBA share price is staggering," he said. "It’s one thing to value quality—but at what point do you stop chasing it and look for something that actually gives you growth or yield?"

Jun Bei Liu, Founder and Lead Portfolio Manager at Ten Cap, offered a similar view. "CBA is seen as pretty defensive compared to US banks," she said. "It’s very domestically focused, and trade tariffs don’t affect it in the same way." With housing activity stabilising and a rate cut on the horizon, Liu believes conditions should remain supportive.

That said, she doesn’t expect fireworks.

"CBA probably isn’t going anywhere," Liu said. "I don’t see it collapsing, but I do think it could lag when everything else improves."

What now for retail investors?

Rickard believes there are better opportunities elsewhere in the banking sector—particularly ANZ (ASX: ANZ), which he says is undervalued relative to its peers.

"ANZ is still very cheap," he said. "The yield’s over 5.5%, even if only 70% franked due to its New Zealand exposure. But you’re getting a far more compelling income return than what CBA is offering today."

The market may have misjudged ANZ, Rickard argued. "They’ve had some bad news priced in—a leadership change, some regulatory overhang—but that might be setting the stock up for a rebound if execution improves."

In contrast, CBA’s high valuation and lower yield leave little room for upside, especially in a market where rate cuts could spark a hunt for growth and more attractively priced assets.

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