Artificial intelligence and, by extension, cloud computing and data centres have been perhaps the biggest investment theme globally over the past year.

Companies such as Nvidia Corp (NASDAQ: NVDA), Micron Technology Inc (NASDAQ: MU) and SpaceX (NASDAQ: SPCX) have attracted huge investor interest as the infrastructure demands of the AI industry continue to grow.

Not all providers created equal

Macquarie has this week issued a research note to clients, which argues that simple ownership of GPUs (graphics processing units) is not enough, but that it has to be paired with the ability to “convert capital, power and installed capacity into useful compute”.

They add:

In our view, useful compute per MW per dollar is the most important metric for assessing Neocloud quality. Neocloud customers buy useful compute output, not machine access. Two operators using the same GPU hardware can deliver materially different performance, utilisation, latency and cost outcomes depending on network architecture, software stack, reliability, batching, caching and customer mix. As the industry matures, durable premiums will accrue to operators that can prove better delivered compute.

To clarify, a neocloud is a specialised cloud provider built to specifically support AI and machine learning workloads.

Which ASX tech companies look set to benefit?

When it comes to the Australian market, Macquarie’s top sector picks for companies that can support neoclouds are Megaport Ltd (ASX: MP1) and Nextdc Ltd (ASX: NXT).

Macquarie said in its note to clients that in Australia, neocloud entrants like Firmus and Sharon AI “are competing for the same scarce pool of data centre capacity, adding another source of demand to a market that was already supply constrained”.

They added:

The relevance for NXT is straightforward: neoclouds are being forced to secure data centre capacity ahead of GPU deployment, with NVIDIA supply of GPUs contingent on signing upfront data centre contracts. This pulls demand forward into an already constrained market. NXT’s agreement with Sharon AI for 50MW of capacity at its M3 site is an example of this.

Macquarie has a price target of $18.30 on Nextdc shares compared to $13.07 currently.

With regard to Megaport, Macquarie said the company “already has the diversified Enterprise customer base and characteristics that drive quality for Neocloud operators”.

They added:

These characteristics drive lower operating risk (MP1 signs contracts before capex), a net cash position, and higher quality business and customer mix.

Macquarie said Megaport’s Latitude business division was also diversified well-beyond just AI, supporting a “highly diverse mix of non-AI workloads, including web hosting, game servers, large relational databases, streaming applications, and traditional enterprise IT migrations that require high performance without virtualisation overhead”.

Macquarie has a price target of $27.80 on Megaport shares compared to $19.90 currently.

The post Which ASX tech companies does Macquarie like in the surging cloud computing sector? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Megaport and Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. 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.

The Rio Tinto Ltd (ASX: RIO) share price is in focus today after the mining giant reported copper equivalent production rose 3% year-on-year for the first half of 2026, with iron ore and lithium output also trending higher.

What did Rio Tinto report?

• First-half 2026 copper equivalent (CuEq) production up 3% year on year
• Oyu Tolgoi copper mine delivered 31% higher copper output, supporting copper C1 net unit cost reductions
• Pilbara iron ore sales in Q2 at 85.3 Mt, up 7% on Q2 2025; H1 iron ore sales totalled 157.7 Mt (+5% YoY)
• Bauxite production recovered in Q2, but H1 fell 7% YoY to 28.5 Mt
• Lithium carbonate equivalent (LCE) production jumped 20% in Q2 and 53% in H1 to 27.3 kt
• 2026 production and cost guidance across key commodities left unchanged

What else do investors need to know?

In the first half of 2026, Rio Tinto saw strong contributions across most commodities, with productivity programs helping lift Pilbara iron ore’s output to the highest first half levels since 2018. The ramp up of Oyu Tolgoi underground operations supported significant growth in copper output, while new lithium projects—Sal de Vida and Fénix 1B—delivered first production ahead of plan.

Production guidance for iron ore, copper, aluminium, and lithium remains unchanged for the full year. The group flagged ongoing resilience despite global supply chain challenges and only “limited” operational impacts from Middle East disruptions. Notably, Rio’s copper portfolio benefited from strong pricing trends, while higher diesel costs modestly raised Pilbara iron ore cash costs.

Large-scale expansion projects including Simandou iron ore, Canadian AP60 aluminium smelter, and Rincon lithium in Argentina are tracking milestones, with some nearing completion. Free cash flow reporting changes and the group’s commitment to capital discipline were also highlighted.

What did Rio Tinto management say?

Rio Tinto Chief Executive Simon Trott commented:

We are delivering growth as we drive performance across the group, with copper equivalent production up 3 per cent in the first half. Our scale, geographical diversification and sophisticated supply chains continue to underpin our resilience and strong operational performance despite ongoing geopolitical uncertainty throughout the period

What’s next for Rio Tinto?

Management reaffirmed full-year production and cost guidance across core businesses. In the Pilbara, ongoing productivity investments are expected to underpin stable iron ore shipments, though some port outload capacity reductions are flagged as capital works continue. Copper growth is set to accelerate as Oyu Tolgoi ramps up and work advances at Resolution (US) and Winu (WA) projects.

Lithium remains a strategic focus, with expansion in Argentina proceeding and inaugural production from key assets achieved ahead of expectations. The Simandou iron ore development and Canada’s AP60 aluminium project are major near-term catalysts. Management remains upbeat about long-term market demand for Rio Tinto’s portfolio of future-facing minerals.

Rio Tinto share price snapshot

Over the past 12 months, Rio Tinto shares have risen 48%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has risen 2% over the same period.

View Original Announcement

The post Rio Tinto: 3% production growth and strong lithium output in H1 2026 appeared first on The Motley Fool Australia.

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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.

The big four bank shares play a vital role in the Australian economy and hold a dominant market share of the ASX 200. 

In fact, they make up almost a quarter of Australia’s benchmark index in terms of market cap.

Because of this dominance, the performance of the big four bank shares heavily impacts many investors’ portfolios. 

This is true both through individual exposure and many ASX ETFs that include these banks. 

How have they performed in 2026?

Compared to the year prior, the big four bank shares have underperformed in 2026. 

At the time of writing, year to date: 

• Commonwealth Bank of Australia (ASX: CBA) shares are up 5%
• National Australia Bank Ltd (ASX: NAB) shares are down 6%
• ANZ Group Holdings Ltd (ASX: ANZ) shares are down nearly 1%
• Westpac Banking Corp (ASX: WBC) shares have fallen 6%. 

There have been several headwinds contributing to this underperformance. 

Big four bank shares have generally underperformed in 2026 after entering the year on elevated valuations, leaving limited upside as investors questioned whether earnings growth could justify their premium prices. 

Interest rates, softer net interest margins and a rotation into cheaper sectors have also weighed on sentiment toward the major banks.

However, it is worth noting that there has been an upward trajectory in recent weeks, as murmurs of interest rate declines have improved sentiment.

What are experts saying about bank shares?

As we look towards the back half of 2026, there appears to be limited upside for big four bank shares. 

For Australia’s largest bank, Morgan Stanley recently maintained its sell rating on CBA shares with a $125 target. 

This target represents a 26% downside compared to current levels. 

Morgan Stanley also has a sell rating on NAB and Westpac shares. 

Its price targets of $34.50 and $31.50, respectively, indicate between 13% and 14% downside risk. 

Finally, in some good news, Citi reaffirmed its buy rating on ANZ shares recently with a price target of $39.25.

This indicates an upside of roughly 9% from current levels. 

Why this unique ASX ETF could be an option 

It’s important for investors to understand that broker targets aren’t guarantees, and analysts can be wrong. 

However, the current consensus suggests the major banks may offer limited capital growth after their strong run. 

For investors who still want exposure to the sector without relying heavily on any single bank, a diversified ASX ETF such as VanEck Australian Banks ETF (ASX: MVB) could be a smart investment. 

It includes a majority exposure to the big four banks in one simple trade, as well as three other large ASX financials shares. 

It may help investors diversify their exposure to the big four banks. 

The post What are experts tipping for the big four bank shares in the back half of 2026? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has positions in National Australia Bank. 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.