When it comes to artificial intelligence (AI) and initial public offerings (IPOs), there’s never been any shortage of excitement.

Since ChatGPT entered the scene in late 2022, markets have been captivated by the promises of AI.

By now, many people have likely experimented with some form of AI and may be using it to improve efficiency in their personal or professional lives.

Investors in AI-linked companies have clearly benefited. Over the past five years, the tech-heavy Nasdaq has rallied nearly 100%. Nvidia has led the charge, surging by more than 1,000% over this period. 

The chipmaker shows no signs of slowing down. After setting a new all-time high this week, it currently sits on the cusp of becoming the world’s first US$6 trillion company

On the IPO side of things, Elon Musk’s Space Exploration Technologies Corp (SpaceX) debuted on the NASDAQ this year. This was the largest IPO in history, raising nearly US$86 billion. It also crowned Musk the world’s first-ever trillionaire, with his wealth surging even further ahead of his tech-industry rivals.

So, when Australia’s second-largest IPO in history promises to provide Aussie investors with exposure to AI, is the opportunity too good to be missed?

I am, of course, referring to Firmus Technologies, which is set to list on the ASX later this month.

What is Firmus?

Firmus Technologies was founded in 2019 by Oliver Curtis, Tim Rosenfield, and Jonathan Levee. The company originally started out as a Bitcoin mining operation before pivoting to AI infrastructure around 2021-2022.

Today, the company designs, builds, and operates highly energy-efficient, modular, and liquid-cooled data centres, referred to as ‘AI factories’. These factories are fitted with highly sought-after specialist equipment such as Nvidia’s graphics processing units (GPUs), which are rented to companies.

With Meta Platforms, Nvidia, and OpenAI as customers and Nvidia as a supplier, many of the biggest names in tech are part of the ecosystem.

Given the scale of demand for data centres driven by the global AI boom, it’s easy to see why this IPO has gathered so much attention.

As Regal Partners’ Phil King put it, “Firmus is incredibly lucky. It’s in the right spot at the right time for the biggest technology revolution we have seen and the biggest cap-ex boom in history.”

For ASX investors with little exposure to AI-themed companies in the local market, the offering adds a new level of opportunity and excitement.

When will the company begin trading?

According to The Australian Financial Review, Firmus is set to begin trading on the ASX on 23 October. 

Based on the originally reported offer price of $11, the company is looking to raise around $7 billion. Combined with existing ownership, this would give it an implied equity valuation of nearly $44 billion. For context, this would put it in the league of well-known Aussie blue chips Transurban Ltd (ASX: TCL), Woolworths Ltd (ASX: WOW), and Woodside Energy Group Ltd (ASX: WDS). Each of these companies currently has a market capitalisation of between $40 to $50 billion.

If priced at $11, the proposed deal would be Australia’s second-largest IPO by funds raised. Telstra Group Ltd (ASX: TLS)’s 1997 listing, which raised $14 billion, still holds the top spot. Medibank Private Ltd (ASX: MPL), which raised nearly $6 billion in 2014, would move to third place.

However, overnight, it was reported that the initial bid price may be reduced as low as $8.25, amid a lack of interest from prospective investors at the higher price. This would materially reduce its market capitalisation upon listing. 

It’s also worth noting that the prospectus is yet to be released. That’s due on 12 October.

Who are the existing investors?

Should you choose to buy shares in the company, you may be wondering who you’d be investing alongside. After all, high insider ownership is a common criterion many investors look for when making a new investment, as it often signals alignment of managerial and shareholder interests. 

In the case of Firmus, there is decent alignment with company founders and their close family owning around 24% of the company. Co-Founder and Co-CEO Oliver Curtis holds the largest stake at 13.3%, followed by his father, Nick Curtis, at 5.5%. 

It’s also worth noting that the three founders have the majority of their holdings subject to escrow restrictions. This means they can’t sell their shares when the stock begins trading, even if the stock skyrockets in value. 

Other notable investors include Nvidia (7.2%) and Blackstone (6.7%). 

Several institutional investors hold 53%, including Wilson Asset Management and Regal Partners, who were early backers. 

How can ASX retail investors participate?

Not all ASX retail investors can participate in IPOs. When a company is getting ready to list, shares are allocated to specific brokers and investment banks. In the case of Firmus, that being JPMorgan, Morgan Stanley, Bank of America, and Morgans. 

If you’re interested, you’ll need to check with your broker to see if you can access an allocation. 

Retail applications and offers are expected to run from 12-19 October. 

It’s also worth noting that Firmus’ broker syndicate has revealed that around half of the IPO book is likely to go to existing investors. 

Of course, should you miss out, there will be an opportunity to buy the stock after it lists.

The common IPO trajectory

Rather than focusing on whether you can participate, you should also question whether you should do so.

IPOs are exciting, and FOMO can be a powerful motivator. 

However, history has shown that shares often retract after initially listing. 

SpaceX was arguably the most highly anticipated IPO in history. After listing at a share price of $135 on 12 June, the company soared, powered by market enthusiasm. However, within just a few months, it retreated. In August, investors could have picked up shares for $104. While it is currently trading (marginally) back above its IPO price, patience paid off for those who waited for a more attractive entry point. 

Using a more local example, fast food retailer Guzman Y Gomez Ltd (ASX: GYG) listed on the ASX in June 2024. This was regarded as one of Australia’s most successful and high-profile public floats in recent years. GYG shares followed a similar ‘pop and drop’ trajectory to SpaceX, soaring 36% on its day of listing before retracting. Only recently has the company climbed back above its IPO price.

More broadly, the Australian Financial Review reported earlier this year that of the 17 companies that had listed this year, just six were trading above their IPO price.

Firmus specific risks

Of course, it’s not just ‘IPO risk’ that prospective investors need to consider. While Firmus appears to be a promising company backed by strong demand, there are risks to consider. 

Firstly, the company has very little operating history, making it difficult to determine what it’s actually worth. Critics have noted that the company has yet to make a profit and has billions in debt. The reported listing price ($11 per share) implies a valuation multiple of up to 1,000 times its current revenue.

Another risk worth noting is environmental concerns that have been flagged with regard to data centres. These have been widely reported in the media and could cause major setbacks. 

Goodman Group (ASX: GMG) recently abandoned plans to build a $1.2 billion data centre in Sydney over similar concerns. 

It was also recently reported that hedge fund Plato Asset Management is planning to short the stock as soon as it lists. 

Another skeptic, Ten Cap’s portfolio manager Jun Bei Liu, described the Firmus IPO as a “high risk proposition”. 

As reported by the Australian Financial Review, Bei Liu described Firmus as “probably the most polarising IPO [she has] ever seen”, claiming that “the lack of detail they disclose is unprecedented.”

So, not everyone is convinced.

How to decide

If you’re still on the fence about whether to invest in Firmus, remember that investing does not need to be an all-or-nothing decision. It’s up to you to decide how much you want to invest and when. You can always start out small and build your position as you learn more about the company, or decide to wait for a more attractive valuation before going all in. 

There are also other ways to invest other than buying the stock directly. Given the likely size of the company, it could be included in the S&P/ASX 200 Index (ASX: XJO) at the December rebalance. Hence, the stock will likely make its way into many exchange-traded funds (ETFs) in the near future, providing investors with diversified exposure.

The post Should you participate in Australia’s second-largest IPO in history? appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. 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 positions in and has recommended Blackstone, Goodman Group, JPMorgan Chase, Meta Platforms, Nvidia, and Transurban Group. The Motley Fool Australia has positions in and has recommended Goodman Group, Telstra Group, and Transurban Group. The Motley Fool Australia has recommended Meta Platforms and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

BHP Group Ltd (ASX: BHP) is already one of the biggest mining shares in the world.

But what could the business look like in five years?

Its commodity mix is changing, major growth projects are progressing, and some of its biggest markets could look quite different by 2031.

So, is BHP the ASX mining share I would want to own for that journey?

Copper could become even more important

The biggest reason I am positive about BHP’s next five years is copper.

It has already become a much larger part of the business. In FY26, copper contributed more than half of BHP’s underlying EBITDA for the first time, while the company produced around 2 million tonnes for the second consecutive year.

I think the longer-term opportunity is even more compelling. Electrification, renewable energy, data centres, and AI infrastructure all require enormous amounts of copper. BHP expects global demand to rise from around 34 million tonnes a year today to more than 50 million tonnes by 2050.

The company is positioning itself accordingly. It has growth options across Chile, South Australia, Argentina, and the United States, with management believing its copper pipeline could lift attributable production by around 40% by FY35.

Not all of that will arrive within five years, but I think the direction is clear. BHP is becoming increasingly geared towards a commodity that could face strong structural demand.

Iron ore still has an important job

I would not overlook iron ore simply because copper is getting more attention.

BHP’s Western Australian iron ore operations remain a major source of cash, and FY26 delivered record production and shipments. The business also retains its position as one of the lowest-cost major producers globally.

That is important because iron ore can help fund the next phase of growth.

China’s property sector remains a risk, but BHP still expects Chinese steel production to stay around 1 billion tonnes annually through the remainder of this decade, while India is becoming increasingly important as infrastructure and industrial investment expand.

In my opinion, iron ore does not need to be the growth engine. It can remain the dependable cash generator behind the rest of the portfolio.

A new commodity joins the mix

The next five years should also see potash become meaningful. BHP’s Jansen project in Canada is on track for first production in mid-2027. Stage 1 is already well advanced, while Stage 2 is designed to eventually help take the combined output to around 8.5 million tonnes a year.

Potash gives BHP exposure to agriculture and food production, which brings a different demand driver from metals such as copper and iron ore.

I think that diversification could become increasingly valuable as Jansen ramps up.

What could go wrong?

BHP is still a commodity producer, so prices will have a major influence on returns.

A sharp fall in copper or iron ore prices could outweigh operational progress, while large projects such as Jansen and future copper developments bring execution and cost risks.

I would also expect the dividend to move around with the cycle. BHP can offer a good dividend yield at times, but I would not buy it expecting a perfectly smooth income stream.

Foolish takeaway

For me, BHP would be the ASX mining share I would most want to own over the next five years.

Iron ore should continue providing substantial cash flow, copper is becoming a much bigger part of the growth story, and potash adds another long-term opportunity.

There will be commodity cycles along the way, but I think BHP’s portfolio is moving in the right direction for the world investors are likely to face in 2031.

The post Is BHP the best ASX mining share to buy for the next 5 years? appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Life360 vs Droneshield shares: Which ASX tech stock stands out?

Picking between two innovative tech shares on the ASX can feel like comparing apples to oranges, but if you’re weighing up Life360 Inc (ASX: 360) versus Droneshield Ltd (ASX: DRO), you’re not alone. Both operate at the cutting edge of technology—Life360 in global safety apps for families and friends, Droneshield on the frontline of drone detection. So, which one shines brighter as a buy right now? Here’s how the numbers and business models stack up.

The case for Life360

Life360 is a US-based software company best known for its popular family safety and location-sharing app, available in multiple languages across the world. It boasts over 104 million monthly active users, connecting families and friends to share whereabouts, communicate, and get help with roadside emergencies, theft identification, and more. The company has also pushed into the advertising market with its acquisition of ad-tech firm Nativo, pointing to diverse revenue streams beyond just app subscriptions.

There are a few stand-out fundamentals for Life360:

• Market capitalisation of $4.91 billion—significantly larger than Droneshield, showing real global ambition and scale.
• A positive earnings per share (EPS) of $0.573, paired with a P/E ratio of 24.59—showing strong underlying profitability for a tech stock, even though it’s had a rough run this year.
• No dividend on offer, but this is common among fast-growing tech companies who’d rather reinvest in expansion.

Year to date, the stock has fallen sharply (down 40%), but investors may see this as an opportunity to buy a global leader well below its earlier highs.

The case for Droneshield

Droneshield is an Australian defence tech business focused on creating artificial intelligence-powered hardware and software to detect, disrupt, and protect against rogue drones. Its product suite serves a serious need for governments, airports, and critical infrastructure, keeping unwelcome drones out of sensitive airspace. The company has growing reach in Australia, the US, and the UK, and sits at the intersection of cybersecurity, national security, and emerging technology.

Here’s what jumps out in Droneshield’s fundamentals:

• Market cap of $1.60 billion—quite a bit smaller than Life360, but still marking it as a noteworthy mid-cap disruptor on the ASX.
• EPS is negative at -$0.033, and the P/E ratio is an eye-watering 433.75. This high multiple reflects the market’s expectations for future earnings growth, but also signals just how little earnings Droneshield is generating today. (Note: Droneshield’s reported P/E ratio may be based on a different earnings measure than the EPS figure shown, which is why they may appear inconsistent.)
• Like Life360, there’s no dividend on offer as the company remains laser-focused on reinvestment and scaling up.

Year to date, the share price has also had a rough run (down 41.4%), despite megatrends like defence spending and security concerns staying front of mind globally.

Valuation comparison

When it comes to key valuation and size metrics, here’s how both tech businesses compare:

	Life360	Droneshield
Market Cap	$4.91 billion	$1.60 billion
P/E Ratio	24.59	433.75
Earnings per Share (EPS)	0.573	-0.033
Dividend Yield	0.00%	0.00%
YTD Return	-39.99%	-41.40%

Both companies don’t pay dividends, so income investors may look elsewhere. The big contrast is in valuation: Life360’s P/E ratio is much closer to what many would expect for a profitable tech stock, while Droneshield’s enormous P/E suggests the market is pricing in very strong future growth, despite its currently negative EPS.

Recent share price momentum

Comparing recent share price performance up to 6 October 2026:

• Life360 closed at $20.12, slipping 0.98% on the day. Over the recent fortnight, it’s mostly traded between $18.90 and $20.50, showing a mix of swings but little clear upward momentum. Its YTD return sits at -39.99%.
• Droneshield finished at $1.73, down 3.88% for the session. Over the same time, it’s moved between $1.58 and $1.83, likewise failing to show a bounce-back. Its YTD performance is -41.4%.

Both stocks are down around 40% over the year to date and have struggled to generate positive momentum in recent weeks.

Which is the better buy?

For me, Life360 Inc stands out over Droneshield at this point. Here’s why: Life360 boasts solid positive earnings, a reasonable P/E ratio for a scale tech stock, and a diverse, global user base with proven monetisation through both subscriptions and advertising. While its share price has sunk this year, I think the fundamentals and business model are robust—and current price weakness could offer a compelling entry point for patient investors.

Droneshield is an exciting, high-potential business in a vital industry. Yet, with its high P/E and negative EPS, I see it as much more speculative at present: the market’s pricing in a lot of future hope, rather than current profits.

Neither pays a dividend, and both have copped it price-wise in 2026. But if I had to pick between the two right now, my pick would be Life360 for its stronger profitability, larger market presence, and more reasonable valuation. For those who crave a pure growth punt on future tech, Droneshield could appeal, but for me, Life360 offers a better mix of scale and earnings power today.

The post Life360 vs Droneshield: Which ASX tech stock is a better buy? 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 positions in and has recommended DroneShield and Life360. The Motley Fool Australia has positions in and has recommended Life360. 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 draft. 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.