Megaport Ltd (ASX: MP1) shares are on watch on Tuesday after the tech company announced almost $1 billion in new AI contracts.

The Megaport share price finished yesterday’s session down 3.92% at $18.85, although the stock has still climbed around 60% in 2026.

Megaport has delivered a raft of positive updates this morning, giving investors plenty to think about when trading gets underway.

So, let’s take a closer look.

Megaport lands almost $1 billion in new contracts

The biggest news this morning is the signing of three new AI infrastructure contracts through Megaport’s Latitude.sh business.

The deals are worth roughly $978.6 million in total and cover GPU and CPU compute, network, and storage services.

Two are with new customers, while the other expands an existing relationship.

Megaport will also receive around $322.6 million in prepayments, with roughly $281.5 million coming from one new customer before services are delivered.

Once everything is up and running, the company expects its pro forma annual recurring revenue (ARR) to reach around $1.1 billion.

That takes the total value of strategic contracts announced since April to about $2.3 billion.

CEO Michael Reid said:

Since April, we’ve announced approximately A$2.3 billion in total strategic contract value.

He added that the company is “just getting started”.

Business continues to grow

There was also a positive update on how the rest of the business is tracking.

Network ARR reached $302.6 million in August, up 29% year on year on a constant currency basis.

Net revenue retention increased to 116%, compared with 110% a year ago.

But it’s the Compute side of the business where the numbers are really starting to grow.

Compute ARR reached $201.4 million as of 22 September, up 90% since the end of June and 227% since Megaport completed the Latitude.sh acquisition.

Megaport is now billing more than $500 million in Group ARR, not including the full impact of the contracts announced today.

FY27 guidance upgraded

With all of this coming through, Megaport has upgraded its FY27 guidance as well.

Revenue is now expected to come in between $720 million and $810 million, compared with the previous range of $620 million to $730 million.

EBITDA margins are also expected to be higher, with guidance increasing to 42% to 44%.

Of course, all this growth comes at a cost.

Megaport now expects FY27 capital expenditure of between $1.78 billion and $1.88 billion, which is around $500 million higher than its previous guidance.

Despite the higher investment, Megaport says it remains fully funded, with pro forma liquidity of approximately $362.2 million.

The post Megaport shares on watch after locking in almost $1 billion of new AI deals appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 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 Medibank Private Ltd (ASX: MPL) share price has drifted lower, whcih this has given investors the chance to buy with a larger dividend yield.

When a share price declines, it means the dividend yield rises at a similar rate.

For example, if a business had a dividend yield of 5% and the share price declines 10%, then the dividend yield becomes 5.5% – a rise of 10%.

At the time of writing, the Medibank Private share price has declined by 14% since 7 August 2026, as shown in the chart below.

The business could be an attractive opportunity to look at for passive income. Let’s take a look at whether it’s a good buy today.

Dividend projection

The company reported a solid set of numbers in FY26, and this could continue into the 2027 financial year.

FY26 saw 22,100 (or 1.1%) net resident policyholder growth, with health insurance operating growth to $769.8 million. Segment operating profit rose 6.4% to $870.5 million, partly thanks to Medibank’s healthcare segment profit rising 31.3% to $100.7 million.

The company’s 6.7% rise in group operating profit to $813.5 million helped fund a 6.7% rise in the dividend per share to 19.2 cents.

At the current Medibank Private share price, the FY26 dividend translates into a grossed-up dividend yield of 6%, including franking credits, at the time of writing.

The projection on CMC Invest suggests that the ASX healthcare share could increase its annual dividend per share by 6.25%, leading to the company’s FY27 grossed-up dividend yield rising to 6.4%, including franking credits, at the time of writing.

That’s an impressive dividend yield for a business offering defensive earnings and exposure to the long-term tailwind of ageing demographics. It looks more appealing than the term deposit rates at the moment.

The company’s FY27 guidance of resident policyholder growth, non-resident private health insurance gross profit growth, and an increase in healthcare segment profit suggests to me that the 2027 financial year could be another good year.

Is this a good time to invest at the current Medibank Private share price?

According to CMC Invest, there have been seven analyst ratings on the business within the last three months. Two of those analyst ratings were a buy, and five analyst calls were a hold.

A price target tells us where analysts think the share price will be in 12 months from the time of the investment call.

The average price target of those seven analyst ratings is $5.03. Therefore, those analysts collectively suggest that the Medibank share price could rise by more than 10% over the next 12 months.

Combined with the dividend return, the business could be a market beater over the next year.  

The post Is the Medibank share price a buy for its 6% dividend yield? 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 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.

DroneShield Ltd (ASX: DRO) shares fell to a fresh 52-week low on Monday, closing the day down another 2% to just $1.58 a piece.

The drone operator’s shares have now lost around 53% of their value so far in 2026, and are down 64% over the past 12 months.

What happened to DroneShield shares in 2026?

After some heavy selling in late 2025, DroneShield shares started strong in 2026. Concerns around geopolitical volatility and instability in the Middle East saw governments around the world hike their defence budgets.

But by April, investors started turning their backs on the ASX defence stock amid concerns about whether the company’s future growth prospects are large enough to justify its share price.

The share sell-off accelerated in May when DroneShield announced that the Australian Securities and Investments Commission (ASIC) had requested that the company provide reasonable assistance in connection with an investigation under the Corporations Act. The investigation relates to market announcements and share trading in November 2025.

Sentiment slumped even further when the company posted a disappointing first-half FY26 result last month.

DroneShield posted a 74% increase in revenue for the six months ending 30th of June, and a 229% increase in recurring revenue. But DroneShield also posted a statutory net loss after tax of $32.2 million, compared with a $2.1 million profit a year earlier. Underlying EBITDA also came in at a $12.4 million loss, compared with an $8 million profit posted in the first half of FY25.

DroneShield’s revenue came in line with guidance expectations. But recurring revenue was a miss, at $11.5 million versus guidance of $14.2 million for the six-month period.

Even this month’s news of DroneShield’s new RfRecon weapon and new non-executive director, Lynne Saint, hasn’t been enough to reignite confidence in the stock.

So, can DroneShield shares bounce back? Or has the defence stock well and truly passed its peak?

Are the shares a buy, sell, or hold now?

The experts are still divided on their outlook for DroneShield shares over the next 12 months, which means it’s unclear whether the stock has the potential to rebound from the latest low.

TradingView data shows that of the four analysts, two have a strong buy rating and two have a sell/strong sell rating.

The target prices also vary. The average target price of $1.99 implies a potential 26% upside over the next 12 months, at the time of writing. 

But the minimum $1.45 target price implies an 8% downside at the time of writing. And the maximum $2.60 target price suggests DroneShield shares could rise another 65% over the next 12 months.

My view on DroneShield shares

I think that at the current trading price, DroneShield shares are probably below fair value. But without any visibility of tailwinds to drive the share price higher over the next few months, I can’t see a meaningful increase before the end of the year. All eyes will be on the company’s full-year FY26 result, expected in February next year.

The post Can DroneShield shares recover from a fresh 52-week low? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 DroneShield. 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.