There are a lot of ASX stocks to choose from on the local share market.

But which ones should you buy and what should you avoid?

Let’s take a look at two stocks that Morgans has given buy ratings to and one that it is tipping as a sell. Here’s what you need to know:

Flight Centre Travel Group Ltd (ASX: FLT)

Morgans remains positive on this travel agent giant. In response to its better than expected half-year results, the broker put a buy rating and $18.05 price target on its shares. Based on its current share price of $12.17, this implies potential upside of 48% for investors. It commented:

FLT’s 1H26 NBPT was up 4.1%, a beat on guidance for a flat result. The Corporate result was the highlight with NPBT was up 20%, while Leisure was better than feared down only 4%. The 3Q26 is off to a strong start and importantly Leisure is back in growth. FY26 guidance was reiterated. We have made minor upgrades to our forecasts. FLT’s fundamentals remain attractive (FY27 PE of 10.6x) and we retain a Buy recommendation with a new A$18.05 price target.

Seek Ltd (ASX: SEK)

Another ASX stock that Morgans is bullish on this month is job listings giant Seek.

While the broker has some concerns over the AI disruption threat, it isn’t enough to stop it from putting a buy rating and $27.50 price target on its shares. Based on its current share price of $16.93, this suggests that upside of 60% is possible between now and this time next year. It said:

SEK’s 1H26 result was largely as per expectations with net revenue (+12% on pcp), Adjusted EBITDA (+19% on pcp) and adjusted NPAT (+35% on pcp) all broadly in line with Visible Alpha consensus and MorgansF. We make only marginal adjustments to our forecasts taking into account the updated guidance.

Whilst our DCF-derived price target remains unchanged at A$27.50 the recent sharp share price pullback now results in ~70% [now ~60%] TSR upside. We move to a Buy recommendation accordingly, though SEK has still many questions to answer on the AI threat.

National Australia Bank Ltd (ASX: NAB)

The ASX stock that Morgans is bearish on this month is banking giant NAB.

Although it delivered a solid quarterly update, the broker believes NAB’s shares are overvalued at current levels. It has put a sell rating and $37.27 price target on its shares. Based on its current share price of $46.82, this implies potential downside of 20% for investors. It said:

Like its peers that reported in February, NAB’s 1Q26 trading update showed it is benefitting from a supportive interest rate, credit growth, and asset quality environment. We make upgrades to our forecasts to reflect performance and outlook.

12 month target price set at $37.27/sh. With more aggressive assumptions than previously we estimate a higher fundamental value for NAB. However, the share price is still trading far ahead of this revised estimate. SELL retained, with potential TSR of -17% (including 3.6% cash yield).

The post 2 ASX stocks to buy and 1 to sell appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 blue chip shares that could rise 50%
• 3 ASX growth stocks primed to rocket in 2026
• 5 ASX dividend shares to buy for income in 2026
• Here are the top 10 ASX 200 shares today
• These ASX 200 shares have sunk to 6-month lows. Time to buy?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

After a strong run for the share market, it’s not unusual for investors to start wondering whether a downturn could be around the corner. Bear markets are a normal part of the investing cycle, but that doesn’t make them any less uncomfortable when they arrive.

The good news is that not all companies are affected in the same way during tougher market conditions. Businesses with stable demand, reliable cash flow, and strong market positions can often provide a bit more resilience when sentiment turns negative.

With that in mind, here are three ASX shares that I think could offer investors some peace of mind if markets become more volatile in 2026.

Woolworths Group Ltd (ASX: WOW)

Woolworths is one of the most defensive businesses on the Australian share market.

As the country’s largest supermarket operator, it sells everyday essentials that households continue to buy regardless of what the economy is doing. Food, household goods, and basic necessities tend to be far less sensitive to economic cycles than many other industries.

That stability is one of the reasons Woolworths has been able to generate consistent earnings and dividends over many years.

The company also benefits from strong brand recognition, a nationwide store network, and significant scale advantages in procurement and logistics. These factors help support margins and reinforce its leadership position in the grocery sector.

For investors worried about market volatility, I think Woolworths remains one of the steadier businesses on the ASX.

Transurban Group (ASX: TCL)

Transurban operates a portfolio of major toll roads across Australia and North America, including key transport infrastructure in cities such as Sydney, Melbourne, and Brisbane.

What makes toll road operators attractive during uncertain periods is the predictability of their revenue. Many of Transurban’s assets operate under long-term concession agreements that allow it to collect tolls for decades.

Traffic volumes can fluctuate slightly depending on economic conditions, but essential transport infrastructure tends to remain in demand over the long run.

Another appealing feature of Transurban is its inflation-linked toll structures. In many cases, toll prices increase each year in line with inflation or predetermined escalation formulas.

This can help protect revenue and cash flow even when inflation is elevated. For investors seeking stability and reliable income, Transurban’s infrastructure assets can make it an appealing defensive holding.

Telstra Group Ltd (ASX: TLS)

Telstra is another company that tends to hold up relatively well during uncertain economic periods.

Telecommunications services have effectively become essential utilities in the modern economy. Mobile connectivity, broadband access, and network services are now fundamental parts of everyday life for both households and businesses.

Telstra’s position as Australia’s largest telecommunications provider gives it significant scale advantages and a broad customer base.

The company has also been investing heavily in its mobile network and digital infrastructure in recent years, helping reinforce its competitive position in the market.

For income-focused investors, Telstra’s dividend is also an attractive feature. The company continues to generate strong cash flow and has been returning a meaningful portion of that to shareholders.

Foolish Takeaway

Bear markets can be uncomfortable, but they are also a normal part of long-term investing.

While share prices can still fall during broader market sell-offs, companies with resilient business models often recover faster and continue generating solid returns over time.

For investors seeking a bit more stability in their portfolios, Woolworths, Transurban, and Telstra are three ASX shares I think could offer some peace of mind.

The post Worried about a bear market in 2026? 3 ASX shares for peace of mind appeared first on The Motley Fool Australia.

More reading

• 3 amazing Australian shares for beginners to buy in March
• Could this really be the turning point for Woolworths shares?
• This would be my $1 million ASX retirement portfolio
• What’s happening with Telstra’s dividend?
• The easiest way to earn $1,000 a month in ASX dividends

Motley Fool contributor Grace Alvino has positions in Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group, Transurban Group, and Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If I had to invest $10,000 to generate passive income, I’d choose ASX dividend shares because of the dividend yield.

I’m not about to suggest that Aussies go out there and try to find a 15% dividend yield.

But, if we invest right, investors could end up generating a 15% yield on their initial investment. It will take some patience, though.

It’s important to remember that some large dividend yields may not stand the test of time. A dividend cut may be on the cards for businesses that seem to have huge yields because investors have pushed the share price lower, betting that earnings and the payout are going to drop in the near future.

 I think there are two ways where we can unlock a large dividend yield of 15% (or more). Let’s look at how.

Big starting dividend yield

I wouldn’t expect any business to offer a sustainable starting dividend yield of 15%. But, there are some with yields of between 9% to 11% where I expect the business can maintain and slowly grow its payout in the coming years.

While it might take a while to reach 15%, I think this sort of business could deliver a big dividend yield at the start and become even larger over time.

There are some names that come to mind for large payouts such as WAM Microcap Ltd (ASX: WMI), Hearts and Minds Investments Ltd (ASX: HM1) and Shaver Shop Group Ltd (ASX: SSG).

With those sorts of dividend yields, if someone invested $10,000 then they could unlock $1,000 of annual income straight away.

Dividend growth

While huge yields may appeal to some investors, it could be a better call to look at businesses that are growing their payout at a faster pace. That could lead to stronger total shareholder returns (TSR) and eventually the yield could surpass what a higher-yielding business offers.

For example, if a 10% yielding business grows its payout by 2% per year, it becomes 15% yield in around 20 years. A business with a 5% dividend yield that’s growing the payout at 10% per year becomes a 15% dividend yield on the initial investment after 12 years.

Of course, we can’t know for sure what businesses are going to do with their payouts over the next decade or more.

What sort of businesses have a solid starting payout today and could deliver strong dividend growth over the longer-term?

I’d look at apparel retailer Universal Store Holdings Ltd (ASX: UNI), jewellery retailer Lovisa Holdings Ltd (ASX: LOV), investments business Pinnacle Investment Management Group Ltd (ASX: PNI) and ethical fund manager Australian Ethical Investment Ltd (ASX: AEF).

Either way, I think there are some very exciting investments out there for investors looking for a lot of passive income.

The post How to invest $10,000 to aim for a 15% dividend yield appeared first on The Motley Fool Australia.

More reading

• A once-in-a-lifetime opportunity to snap up this 10.75% ASX dividend yield?
• Buy, hold, sell: Guzman Y Gomez, Lovisa, and Newmont shares
• How I’d invest $20,000 in the ASX share market right now
• 5 ASX dividend shares to hold for the next decade
• A once-in-a-decade chance to get a 10%+ yield from ASX 200 income shares?

Motley Fool contributor Tristan Harrison has positions in Australian Ethical Investment, Hearts And Minds Investments, Pinnacle Investment Management Group, and Wam Microcap. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Australian Ethical Investment, Lovisa, and Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has recommended Australian Ethical Investment, Lovisa, Shaver Shop Group, and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It was another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Catapult Sports Ltd (ASX: CAT)

According to a note out of Bell Potter, its analysts have retained their buy rating on this sports technology company’s shares with a trimmed price target of $4.85. Catapult has been named by Bell Potter as one of its preferred tech stocks in the mid cap space. This is partly due to its strong position in a pro sports technology market, which was valued at US$36 billion in 2025 and is forecast to double to US$72 billion by 2030. In addition, the broker doesn’t believe that artificial intelligence (AI) is going to disrupt its business and believes that its shares could rally strongly when the tech sector rebounds, especially given the lack of other good quality tech stocks in the mid cap space. The Catapult share price ended the week at $3.99.

Life360 Inc (ASX: 360)

Another note out of Bell Potter reveals that its analysts have retained their buy rating on this family safety technology company’s shares with a trimmed price target of $40.00. Bell Potter was impressed with Life360’s performance in FY 2025, highlighting that its results were ahead of forecasts. In addition, the broker was pleased with Life360’s guidance for FY 2026, highlighting that it was in line with both the broker’s and consensus estimates. In light of this and the significant share price weakness recently, Bell Potter sees now as a good time for investors to pick up shares in this rapidly growing company. The Life360 share price was fetching $21.87 at Friday’s close.

Light & Wonder Inc. (ASX: LNW)

Analysts at Morgans have upgraded this gaming technology company’s shares to a buy rating with a trimmed price target of $195.00. According to the note, Light & Wonder’s full-year results were in line with expectations. Morgans notes that this was driven by strong Gaming and iGaming performances, which offset continued softness in SciPlay. Another positive was management’s articulation of AI as both an offensive growth lever and a defensive moat. Morgans believes AI will enhance Light & Wonder’s competitive edge rather than erode it. As a result, it views the recent share price weakness as disconnected from the durability of its land-based earnings base. And with an undemanding valuation, it thinks investors should be buying shares. The Light & Wonder share price ended the week at $129.97.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy today
• Why Catapult, DroneShield, Karoon Energy, and WiseTech shares are charging higher
• Bell Potter says this ASX 200 tech stock is a top buy
• 3 buy-rated ASX growth shares tipped to rise 30% to 125%

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Catapult Sports, Life360, and Light & Wonder Inc. The Motley Fool Australia has positions in and has recommended Catapult Sports and Life360. The Motley Fool Australia has recommended Light & Wonder Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

For investors just getting started in the share market, choosing the first few stocks can feel like a big decision.

One approach I think makes sense is focusing on businesses that are leaders in their industries and have clear long-term growth opportunities. Companies like this often have lasting competitive advantages and strong track records, which can make them easier to stick with through market ups and downs.

With that in mind, here are three Australian shares I think beginners could consider buying this month.

CSL Ltd (ASX: CSL)

CSL is one of the most globally successful healthcare companies to come out of Australia.

The company specialises in plasma therapies, vaccines, and other life-saving treatments used around the world. These are not products that consumers can easily switch away from, and demand is often driven by medical necessity rather than economic cycles.

What stands out to me about CSL is the scale of its global operations. The company runs an enormous network of plasma collection centres and manufacturing facilities that would be extremely difficult for competitors to replicate.

This infrastructure supports a pipeline of therapies used to treat serious conditions such as immune deficiencies and bleeding disorders.

While the company has faced some challenges in recent years, I still see CSL as a business with strong long-term fundamentals. For beginner investors wanting exposure to global healthcare innovation, it remains one of the standout Australian companies.

Woolworths Group Ltd (ASX: WOW)

Woolworths offers something many beginner investors appreciate: simplicity.

At its core, the business sells everyday essentials through its supermarket network. Millions of Australians rely on Woolworths stores every week, which provides the company with a highly consistent stream of revenue.

But behind that simple business model sits a very sophisticated logistics and supply chain operation. Woolworths manages one of the largest food distribution networks in the country, allowing it to move enormous volumes of products through its stores efficiently.

This scale gives the company purchasing power with suppliers and helps it maintain a strong position in the highly competitive grocery market.

For investors who want exposure to a stable business with dependable earnings and dividends, Woolworths is often one of the first companies that comes to my mind.

Pro Medicus Ltd (ASX: PME)

Pro Medicus represents a very different type of opportunity.

The company develops medical imaging software used by hospitals and healthcare systems around the world. Its Visage platform helps radiologists process and analyse medical images such as CT scans and MRIs.

What makes Pro Medicus unique is how deeply embedded its software becomes once it is adopted by a hospital network. These contracts often run for many years and can expand as healthcare providers roll the platform out across additional facilities.

The company has also been winning contracts with some of the largest healthcare systems in the United States, which is the world’s biggest healthcare market.

For beginner investors who want exposure to a high-growth technology business in the healthcare sector, Pro Medicus is one of the most impressive success stories on the ASX.

Foolish takeaway

For investors starting out, focusing on quality businesses can make the journey much easier.

CSL, Woolworths, and Pro Medicus operate in very different industries, but they all have strong positions in their respective markets.

Between global healthcare exposure, defensive consumer spending, and high-end medical technology, these three companies offer a mix of stability and growth that I think could make them appealing starting points for beginner investors.

The post 3 amazing Australian shares for beginners to buy in March appeared first on The Motley Fool Australia.

More reading

• Could this really be the turning point for Woolworths shares?
• This would be my $1 million ASX retirement portfolio
• Here are the top 10 ASX 200 shares today
• The easiest way to earn $1,000 a month in ASX dividends
• Sell alert! Why this top analyst is calling time on Xero and CSL shares

Motley Fool contributor Grace Alvino has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Woolworths Group. The Motley Fool Australia has recommended CSL and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Focusing on high-quality ASX dividend ETFs can help if your goal is to retire early at 57.

By reinvesting those dividends early and letting compounding do the heavy lifting, investors can gradually build a portfolio capable of funding their lifestyle years before the traditional retirement age.

Here are 3 ASX dividend ETFs that could help you achieve that goal.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

This is the largest ASX dividend ETF on the Australian market and aims to track the FTSE Australia High Dividend Yield Index. It invests in around 70 Australian companies known for paying strong dividends. Major holdings include Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and Telstra Group Ltd (ASX: TLS). 

The strength of this ASX ETF lies in its simplicity and scale. It focuses on large, established ASX companies with strong cash flows and consistent dividend histories. Many of these dividends come with valuable franking credits, which can boost after-tax income for Australian investors. The ETF also charges a relatively low management fee of around 0.25% per year. 

For investors targeting early retirement, VHY can form a solid income foundation. By reinvesting distributions over the years, investors can steadily grow their number of units and future income stream.

SPDR MSCI Australia Select High Dividend Yield ETF (ASX: SYI)

This fund screens the Australian market for companies with strong dividend yields and sustainable payouts. It holds around 40 to 60 companies and has one of the lowest management costs in the dividend ETF category at roughly 0.20%. The largest holdings are National Australia Bank Ltd (ASX: NAB), Macquarie Group Ltd (ASX: MQG), and Woodside Energy Group Ltd (ASX: WDS).

This ASX dividend ETF focuses on quality income. Instead of simply chasing the highest yield, it filters companies based on financial strength and dividend sustainability. That approach can help investors avoid so-called yield traps, where companies offer high dividends but struggle to maintain them.

For someone planning to retire at 57, that balance between yield and quality could prove valuable.

iShares S&P/ASX Dividend Opportunities ETF (ASX: IHD)

This ASX dividend ETF holds around 50 high-yielding Australian companies and targets businesses with strong dividend profiles. Key holdings include BHP, Telstra, Rio Tinto Ltd (ASX: RIO), and Transurban Group (ASX: TCL). 

IHD provides exposure to many of the ASX’s most reliable dividend payers while spreading risk across a broad group of companies. This diversification can help smooth income streams and reduce reliance on any single stock.

Foolish Takeaway

Sometimes, the path to early retirement doesn’t require complex strategies. A simple portfolio of high-quality dividend ETFs, combined with patience and compounding, can do much of the heavy lifting.

The key advantage of combining these 3 ASX dividend ETFs is diversification. Instead of relying on just a handful of shares, investors gain exposure to dozens of dividend-paying companies across banks, miners, retailers, and infrastructure businesses. That diversification can help stabilise income even when certain sectors face challenges.

The post 3 ASX dividend ETFs that could help you retire at 57 appeared first on The Motley Fool Australia.

More reading

• The easiest way to earn $1,000 a month in ASX dividends
• How to retire early using ASX dividend shares
• How to build a ‘lazy’ passive income portfolio with just 1 ASX ETF
• How to make $25,000 of passive income a year
• Here’s a $50,000 starter dividend portfolio delivering passive income

Motley Fool contributor Marc Van Dinther has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Macquarie Group, Telstra Group, and Transurban Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are looking for new investment ideas this month, then it could pay to listen to what Bell Potter is saying.

That’s because the broker has just released its latest top Australian picks from the smaller side of the market. These are its panel of favoured small-cap ASX shares that it believes offer attractive returns over the long term.

Two that make the list in March are named below. Here’s why it is bullish on them:

Cogstate Ltd (ASX: CGS)

Bell Potter has added Cogstate to its best ideas list in March. It is a healthcare technology company specialising in digital cognitive assessments. These are primarily for biopharma clinical trials across central nervous system indications including Alzheimer’s disease, rare diseases, and broader CNS conditions.

The broker believes there are a number of tailwinds that should be supportive of the strong pipeline momentum it reported in the first half. The broker explains:

We add Cogstate (CGS) as a high-quality healthcare service provider in the clinical trials industry. We see several positive thematics likely to maintain the strong pipeline momentum seen in 1H26, including: 1) ongoing industry R&D in Alzheimer’s disease where CGS has clear expertise and leadership, 2) continued diversification beyond Alzheimer’s into a broader range of indications, and 3) expanded customer access via channel partners such as Medidata.

The stock is trading at ~11x forward EV/EBITDA which looks very undemanding relative to local small cap healthcare peers (>30x avg) and large global peers (~13x avg with lower growth). The company has an impressive NAPT margin of 19% in FY25 and is well poised for leverage off the back of its second-best ever half of new sales in 1H26 which grew revenue backlog up to US$92m.

Praemium Ltd (ASX: PPS)

Another ASX share that Bell Potter is recommending to clients is Praemium. It is a financial technology company that operates an investment platform offering alongside a branded online portfolio administration service. It currently manages over $60 billion in custodial and non-custodial FUA.

Bell Potter believes that Praemium’s shares are undervalued, especially compared to its peers. But the broker doesn’t expect it to stay that way for long. It explains:

While Praemium has demonstrated commercial momentum, strong growth capacity, and a leading technology offering, its valuation continues to lag key peers. This stock looks very attractive at a 12MF PE of ~15.9x, and we expect the market to catch on as the company executes on further market share gains and FUA growth.

The post Bell Potter names the best ASX shares to buy in March appeared first on The Motley Fool Australia.

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Northern Star Resources Ltd (ASX: NST) share price could be on the move after S&P Dow Jones Indices announced its addition to the S&P/ASX 20 Index, effective from March 23, 2026. This change is part of the routine quarterly index rebalance and may increase Northern Star’s visibility with investors and fund managers.

What did Northern Star Resources report?

• Added to the S&P/ASX 20 Index, joining Australia’s 20 largest listed companies
• Set to take effect before market open on March 23, 2026
• Replaces Santos Limited, which will be removed from the S&P/ASX 20
• This is part of S&P Dow Jones Indices’ quarterly review of the S&P/ASX indices

What else do investors need to know?

The inclusion of Northern Star Resources in the S&P/ASX 20 Index could lead to increased demand for its shares, as index-tracking funds and ETFs adjust their portfolios. The move also means Northern Star will likely receive greater attention from analysts and institutional investors.

Being a member of a headline index like the S&P/ASX 20 can be seen as a vote of confidence in Northern Star’s size, liquidity, and stable business performance. Investors should keep in mind that index changes often drive higher trading volumes around the effective date.

What’s next for Northern Star Resources?

Now ranked among the ASX’s largest companies, Northern Star Resources is expected to benefit from improved market visibility and potentially greater investor support. The company may look to leverage its increased profile to pursue further strategic opportunities and engage more actively with its broadening investor base.

Investors will be watching how the share price responds to index inclusion and whether the higher weighting in passive investment products brings sustained benefits to Northern Star over the coming months.

Northern Star Resources share price snapshot

Over the past 12 months, Northern Star Resources shares have risen 57%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.

View Original Announcement

The post Northern Star Resources to join S&P/ASX 20 in March 2026 index shake-up appeared first on The Motley Fool Australia.

More reading

• Don’t overthink it: The best $10,000 approach to start investing in 2026
• Here are the top 10 ASX 200 shares today
• Why the Northern Star share price is sinking 7% today
• Centuria Industrial REIT declares quarterly distribution for March 2026
• Is the ASX 200 ok?

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

When I look for growth shares, I focus on businesses with large opportunities ahead of them and clear drivers that could push earnings significantly higher over time.

Right now, two ASX growth stocks that look particularly interesting to me are Xero Ltd (ASX: XRO) and NextDC Ltd (ASX: NXT).

I’m not alone in thinking this. A leading broker also supports this view and is recommending them as buys.

Why I think Xero is an ASX growth stock to buy

Xero has built one of the leading cloud accounting platforms in the world.

The company provides accounting software used by small businesses, accountants, and bookkeepers to manage finances, payroll, invoicing, and tax reporting. What makes the model powerful is that it operates as a subscription service, which creates a recurring revenue stream that grows as more customers join the platform.

As we covered here recently, analysts at Morgans believe the long-term growth opportunity for Xero remains compelling. I agree with their view that cloud accounting adoption still has plenty of room to expand globally.

The broker explains that “Xero is a global accounting software provider. It offers an attractive medium term growth opportunity as subscriber momentum improves and operating leverage begins to flow through the business model.”

Another reason Morgans sees upside is the company’s expanding ecosystem. Xero has steadily added additional services and integrations around its core accounting software, which increases the value of the platform for customers.

Morgans also believes the company’s improved cost discipline is helping strengthen profitability. The broker adds that “recent cost discipline has strengthened margins… resilient revenue growth is supported by price increases and a broader ecosystem of adjacent services.”

Importantly, I agree with its analysts’ view that the current share price is an attractive entry point for long-term investors, and believe the ASX growth stock could have meaningful upside if it continues executing on its strategy.

The bull case for NextDC

NextDC is another ASX growth stock I think could be set up for massive gains. It operates data centres that support the digital infrastructure powering cloud computing, artificial intelligence (AI), and enterprise data storage.

As businesses increasingly move workloads to the cloud and demand for AI computing power rises, the need for high-quality data centre infrastructure continues to grow.

Morgans is also recommending this stock. It was blown away with its first-half performance, highlighting that recent contract momentum shows how strong demand for NextDC’s facilities currently is.

The broker points out that “NextDC sold more MWs in the month of December 2025 than in the preceding 36 months combined,” describing the period as a record for enterprise and hyperscale sales.

I think these contracts are significant because they provide long-term revenue visibility. Morgans notes that the company now has 416 megawatts of contracted capacity, which “underpins FY29 underlying EBITDA of greater than $700 million without new contract wins.”

Despite this incredible growth outlook, the broker believes the valuation still looks attractive. Morgans states that the company is trading on an “undemanding ~22x EV/contracted EBITDA, with upside potential.”

Foolish takeaway

Growth investing often comes down to identifying businesses operating in large markets with strong long-term demand.

Xero is benefiting from the ongoing global shift toward cloud accounting software, while NextDC is positioned at the centre of the rapidly expanding digital infrastructure and AI computing market.

With supportive broker views and significant growth opportunities ahead, I think both ASX shares could be well placed to deliver strong gains in 2026 and beyond.

The post 2 ASX growth stocks set up for massive gains in 2026+ appeared first on The Motley Fool Australia.

More reading

• Sell alert! Why this top analyst is calling time on Xero and CSL shares
• Why investors are piling back into these ASX tech shares today
• 2 Aussie stocks primed to surge in 2026
• 2 ASX 200 shares you’ll be glad you held for 10 years
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Woolworths Group Ltd (ASX: WOW) share price jumped an incredible 13% after reporting its FY26 half-year result. This led to the supermarket business reaching a level not seen since 2024, as the below chart shows.

The business is the name behind Woolworths supermarkets in Australia, Countdown supermarkets in New Zealand, BIG W, Petstock, PFD (supplying businesses) and more.

The underlying HY26 result numbers were solid and the trading update for the second half of FY26 was particularly appealing. They seemed to show the business is turning its sales, margins and net profit around.

Strong performance in the HY26 result

In the first six months of FY26, before significant items, sales increased 3.4% to $37.1 billion, operating profit (EBIT) 14.4% to $1.66 billion and net profit grew 16.4% to $859 million.

The most important division, Australian food division delivered 3.6% to $27.6 billion and food EBIT increased 9.9% to $1.5 billion.

The business to business (B2B) segment grew sales to $3.1 billion and its EBIT rose 14.6% to $89 million.

New Zealand food sales went up 0.6% to $3.9 billion and EBIT increased 19.8% to $89 million.

W Living sales increased 2.7% to $3.1 billion and EBIT soared 185.6% to $96 million.

Every division achieved sales growth and higher EBIT margins, helping profit rise at a faster pace.

The trading update was particularly promising because it may signify it is regaining its appeal to shoppers compared to main rival Coles Group Ltd (ASX: COL).

In the first seven weeks of the second half of FY26, Australian food sales grew by 5.8% (it was 7.2% growth excluding tobacco). Woolworths food sales were driven strong store item growth and e-commerce growth. However, part of this growth was down to cycling residual industrial action in the prior corresponding period.

Woolworths is expecting the Australian food EBIT “to be at the upper end of the mid-to-high single digit range” guidance that it gave in August. The optimism is based on the performance in the FY26 first half and improved trading momentum.

Another sign of the company’s improving confidence was the fact that the board of directors decided to hike the interim dividend per share by 15.4% to 45 cent. Not a 3% increase, not 5%, not 10%. That’s a confident increase.

Is the Woolworths share price a buy?

One result doesn’t mean it has entered into a new era. But, an intense focus on giving customers the products they want at good value in a convenient way should (continue to) get a good response from consumers.

Its scale benefits, supply chain and e-commerce capabilities are clear advantages that it should continue to capitalise on (and invest in).

I think the business has turned a corner, though it needs to continue what’s working. But, it’s not exactly a cheap bargain because it has already risen significantly in the last few weeks.

The post Could this really be the turning point for Woolworths shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.