The ASX share Nexgen Energy (Canada) CDI (ASX: NXG) may well be one of the best ways to benefit from the strong growth of AI. It’s the owner of a large uranium deposit in Canada, which could be a great profit generator.

It’s one of the picks inside the L1 Long Short Fund Ltd (ASX: LSF) portfolio, which is a listed investment company (LIC) that targets ASX shares and international shares. The LIC likes to invest in ASX mining shares – it’s very willing to do so when they seem attractively priced.

Attractive project

L1 recently noted that NexGen is preparing to develop the world’s largest undeveloped uranium deposit called Arrow, which is located in Saskatchewan, Canada.

The fund manager said that Arrow will be a new major strategic Western source of uranium to address the “looming market deficit”.

L1 highlighted that the ASX energy share received final regulatory approvals in March 2026. The company is preparing to commence full-scale project construction, with an estimated four-year construction timeline.

How much money could this project generate?

The fund manager believes that once the project is completed, Arrow has the potential to generate around C$2.8 billion of operating profit (EBITDA) annually, assuming a uranium price of US$80 per pound, which is below the current uranium price. In the three months to June 2026, the uranium price increased by 1.5%.

L1 suggested that the ASX share is a “highly compelling proposition given NexGen’s current market cap” of approximately C$8.8 billion. That suggests it’s trading at around 3 times the future potential operating profit.

I think the project could generate stronger profits than expected because AI demand is growing, and therefore additional power generation is needed to plug the gap. Nuclear could be a key part of the equation globally, alongside renewable energy, as coal is slowly phased out around the world.

What do other experts think of the NexGen share price?

According to CMC Invest, there have been three analyst ratings on the business within the last three months, with all of those being a buy.

The average price target of those three ratings is $21.07, suggesting a possible rise of around 60% from where it is today. The ASX share looks much better value after falling more than 20% since early June 2026.

The Arrow projection completion is still a while away, but the company could be a compelling buy at the current level. But there are other ASX shares that could also be compelling investments today.

The post Is this ASX share the best way to play the AI demand growth? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in L1 Long Short Fund. 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.

It has been a strong year thus far for Australia’s two largest blue-chip materials stocks Rio Tinto Ltd (ASX: RIO) and BHP Group Ltd (ASX: BHP). 

Year to date, Rio Tinto and BHP shares are up 9% and 25% respectively. 

For comparison, the S&P/ASX 200 Index (ASX: XJO) is up just 0.8% in the same period. 

Why are Rio Tinto and BHP shares soaring?

These shares have risen strongly this year because investors have become more optimistic about the mining sector. 

Higher prices for key commodities such as copper and resilient iron ore prices, driven by growing demand from AI infrastructure, data centres, electrification and renewable energy projects, have boosted earnings expectations. 

Both companies have also delivered solid production results and attracted investors looking for large, financially strong businesses with reliable dividends, helping push their share prices higher.

What is Morgan’s updated view on BHP shares?

At the end of last week, the team at Morgans provided fresh outlooks on both Rio Tinto and BHP shares. 

Looking at BHP shares, the broker said the mining giant ended FY26 on a good note, with an operational result largely in line with consensus and a touch ahead of our estimates in places. 

Normally a source of volatility, BHP’s coal operations posted decent consensus beats at both BMA and NSWEC. FY27 guidance appears steady relative to our existing estimates, although consensus appears high for group copper. Best-in-breed global diversified miner in what remains a healthy upcycle for resources. We maintain our HOLD rating and A$60.20 target price.

Rio Tinto remains posts healthy Q2

Looking at Rio Tinto shares, Morgans said the company posted a healthy Q2 where it matters. 

Pilbara shipments beat consensus (+2%), while Morgans said it sees the headline Simandou miss (-68% vs consensus) as a net positive: a slower Simandou ramp supports iron ore benchmarks, and each US$10/t on the benchmark is worth ~US$2.5bn of annual EBITDA to RIO’s far larger Pilbara business. 

The sting in the tail was Kennecott, with a late June converting furnace breach requiring a ~75-day full rebuild, hitting H2 refined copper and gold output (total copper including saleable matte unchanged). Copper C1 guidance halved to US30-50c/lb, on strong by-prod prices, a material margin tailwind into the H2 result. Trading back close to where we see fair value, RIO remains one of the highest quality global exposures to a sector enjoying a multi-year upcycle (albeit not without its volatility). We maintain our HOLD rating, A$163.00 TP (was A$165.00).

From last week’s closing price of $160.95, the updated price target is just 1.2% above current levels. 

The post What is Morgan’s updated view on Rio Tinto and BHP shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has positions in BHP Group. 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.

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished a relatively flat week in the red. The benchmark index fell 0.5% to 8,796.7 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set for a good start to the week despite a poor session on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 55 points or 0.6% higher. In the United States, the Dow Jones fell 0.75%, the S&P 500 dropped 1%, and the Nasdaq sank 1.4%.

Oil prices jump

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a strong start to the week after oil prices jumped on Friday night. According to Bloomberg, the WTI crude oil price was up 4.5% to US$81.49 a barrel and the Brent crude oil price was up 4.6% to US$88.10 a barrel. Traders were bidding oil prices higher in response to an escalation in US-Iran tensions.

Buy WiseTech shares

WiseTech Global Ltd (ASX: WTC) shares are seriously undervalued according to analysts at Bell Potter. This morning, the broker has retained its buy rating and $71.75 price target on the logistics software provider’s shares. It commented: “We believe the stock looks value on an FY27 EV/EBITDA multiple of c.15x and is trading at an excessively large discount to the Technology One multiple of c.27x. We note WiseTech has higher forecast earnings growth than Technology One over the next few years given the expected margin recovery post the e2open acquisition.”

Gold price rises

It could be a decent start to the week for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price rose on Friday night. According to CNBC, the gold futures price was up 0.65% to US$4,018.8 an ounce. This couldn’t stop the gold price from recording a weekly decline on increased US interest rate bets.

Hold BHP shares

Morgans thinks that BHP Group Ltd (ASX: BHP) shares are around fair value right now. In response to its quarterly update, the broker has retained its hold rating and $60.20 price target on the mining giant’s shares. It said: “A good end to FY26 for BHP, with an operational result largely in line with consensus and a touch ahead of our estimates in places. […] Best-in-breed global diversified miner in what remains a healthy upcycle for resources. We maintain our HOLD rating and A$60.20 target price.”

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor James Mickleboro has positions in WiseTech Global and Woodside Energy Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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.