Author: openjargon

With so many shares to choose from on the Australian share market, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are outlined below. Here’s why they are bullish on them:

Gentrack Group Ltd (ASX: GTK)

According to a note out of Bell Potter, its analysts have retained their buy rating on this utilities software company’s shares with a reduced price target of $8.80. This follows the announcement of the bolt-on acquisition of Middle East airport technology and services provider, Dubai Technology Partners (DTP), for US$10 million. Bell Potter is positive on the news and believes that broader trends are supportive of the acquisition. Outside this, it remains upbeat on Gentrack due to the large secular tailwinds in rapidly shifting energy production and consumption trends. It expects these to drive increased complexity within grids, billing platform requirements, and broader digital transformations. The Gentrack share price is trading at $4.85 on Monday.

ResMed Inc. (ASX: RMD)

A note out of Morgans reveals that its analysts have retained their buy rating on this sleep disorder treatment company’s shares with a trimmed price target of $41.72. This follows the release of a third-quarter update which Morgans described as solid. It highlights that the company delivered double-digit revenue and earnings growth, further margin expansion, and strong cash flow generation. The broker also points out investors are seemingly focusing on variability in US device growth while pondering if the Noctrix acquisition is merely a plug to a slowing core. However, it views these concerns as myopic and manageable. As a result, Morgans thinks now could be an opportune time to invest. The ResMed share price is fetching $28.89 at the time of writing.

Xero Ltd (ASX: XRO)

Analysts at Citi have retained their buy rating and $112.65 price target on this cloud accounting platform provider’s shares. According to the note, the broker was pleased to see news that Xero has lifted its prices in Australia. Citi expects this to boost its revenue per user metric in the market. And while it suspects the increase could cause some level of churn, it is supportive of the move and remains bullish on the investment opportunity here. The Xero share price is trading at $82.86 on Monday afternoon.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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• 10 excellent ASX shares to buy in May

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in ResMed and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Gentrack Group, ResMed, and Xero. The Motley Fool Australia has positions in and has recommended Gentrack Group, ResMed, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

May is now underway, and I think it is a good time to look at a couple of ASX 200 shares that could be worth buying for the long term.

The market has been shifting around quickly, with some sectors under pressure and others still trading strongly. In that kind of environment, I like looking for businesses with clear strengths and enough quality to hold through different conditions.

Two ASX shares I would be happy to buy this month are Commonwealth Bank of Australia (ASX: CBA) and Qantas Airways Ltd (ASX: QAN).

CBA shares

Commonwealth Bank is one of the highest-quality businesses on the ASX, in my view.

It is the largest bank in Australia and has a powerful position across mortgages, deposits, business banking, and digital banking. That scale gives it advantages that smaller competitors can struggle to match.

One thing I like about CBA is the consistency of its customer franchise. The bank has spent years investing in its technology and app experience, and I think that has helped it maintain a strong connection with customers.

This is important because banking can be a fairly competitive industry. Customers can move, pricing can be tight, and margins can shift. But CBA’s brand, distribution, and digital strength give it a good platform to defend its position.

Another reason I would consider buying CBA shares is income.

The bank has long been popular with dividend investors, and I think it remains one of the more reliable dividend payers on the ASX. The dividend yield may not always be the highest among the major banks, especially when the share price is strong, but I believe the quality of the business helps justify that.

I also think CBA can benefit from a resilient Australian economy. If employment remains solid and credit quality holds up reasonably well, the bank should remain in a strong position to generate profits and return capital to shareholders over time.

Qantas shares

Qantas is another ASX share I would consider in May.

It certainly isn’t risk-free. The airline industry can be affected by fuel costs, competition, regulation, and economic cycles. Even so, I think Qantas has a few things working in its favour.

The domestic market remains highly valuable, and Qantas has a strong position across both leisure and corporate travel. Its loyalty program also adds something different to the investment case. It gives the company a recurring, data-rich earnings stream that is not tied purely to seat sales.

I also think the fleet renewal story is important. Newer aircraft can improve efficiency, customer experience, and route flexibility. That can help Qantas strengthen its network over time and support better returns if management executes well.

There is also the broader travel backdrop to consider. Australians continue to value travel highly, and Qantas remains one of the country’s most recognised brands. If demand holds up, I think the business can keep generating solid cash flow.

The share price can be sensitive to oil prices and travel sentiment, so I would expect some volatility along the way. However, I believe the business has more going for it than many investors give it credit for.

Foolish Takeaway

So, should I buy CBA and Qantas shares this month?

For me, the answer is yes.

CBA offers quality, scale, dividends, and one of the strongest banking franchises in the country. Qantas offers exposure to travel demand, a valuable loyalty business, and potential benefits from fleet renewal.

They are very different, but I think both have enough long-term appeal to be worth considering in May.

The post Should I buy CBA and Qantas shares this month? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: CBA, South32, and Worley shares
• Are CBA shares a buy amid record $5.5 billion first-half cash profits?
• What happened with ASX 200 banks stocks NAB and CBA in April?
• How to shave a decade off retirement with 3 ASX stocks and ETFs
• 3 ASX dividend stocks with 4% yields to buy for a winning income portfolio

Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. 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.

Zip Co Ltd (ASX: ZIP) shares were on fire in April and were among the best performers on the ASX 200 index.

During the month, the buy now pay later (BNPL) provider’s shares rocketed approximately 55%.

Let’s see why investors were fighting to get hold of them.

Why did Zip shares rocket in April?

Investors were bidding its shares higher last month after it released an impressive quarterly update.

At a time when many in the market were expecting the BNPL provider to be struggling, it outperformed expectations and even upgraded its guidance.

According to the update, Zip achieved record cash EBTDA of $65.1 million for the third quarter, which is a 41.5% increase on the prior corresponding period.

The key driver of this was its strong total transaction volume growth. Zip revealed growth of 22.4% year on year to $4 billion. This underpinned total income growth of 20.2% to $335.2 million for the three months.

Another positive was that Zip reported an expansion in its operating margin to 19.4%. This is up from 16.5% a year earlier.

Commenting on its performance, Zip’s CEO and managing director, Cynthia Scott, said:

Zip’s resilient business model continues to drive increased profitability at scale, delivering record cash earnings of $65.1m, up 41.5% year on year. Operating margin expanded 292bps to 19.4%, reflecting strong unit economics and significant operating leverage. Momentum continued across both markets, underpinned by deepened customer engagement and disciplined execution.

But as mentioned above, the major highlight was arguably the guidance upgrade.

It now expects group cash EBTDA of at least $260 million for the full year. This is a 4.6% increase on its previous guidance of approximately $248.6 million.

Cynthia Scott added:

Following a strong third quarter performance, we have upgraded our FY26 Group cash EBTDA guidance to be no less than $260.0m, while reconfirming each of our FY26 target ranges.

Where next for its shares?

Despite rising strongly in April, a number of brokers see significant upside for Zip shares. One of them is Ord Minnett, which responded to the update by retaining its buy rating with an improved price target of $4.00.

Based on its current share price of $2.46, this implies potential upside of over 60% for investors over the next 12 months.

Elsewhere, the team at Macquarie Group Ltd (ASX: MQG) has an outperform rating and $3.40 price target on Zip shares. This suggests that upside of almost 40% is possible from current levels.

The post Why Zip shares rocketed 55% in April (and could keep rising) appeared first on The Motley Fool Australia.

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• These are the 10 most shorted ASX shares
• These ASX financial stocks are bouncing, is it just the start?
• The five best ASX 200 stocks to buy and hold in April revealed
• Why these ASX shares jumped 15%+ in April
• Prediction: Zip shares could fly another 121% higher

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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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) shares have been very strong performers over the past 12 months.

During this time, the mining giant’s shares have risen an impressive 45%.

While this is great for shareholders, it could mean that non-shareholders have missed the boat.

But don’t worry, because Bell Potter believes another ASX mining stock could be a top buy this month.

Which ASX mining stock?

The stock that Bell Potter is tipping as a buy this month is Develop Global Ltd (ASX: DVP).

It operates a hybrid model as an underground mining contractor and operator of three mining assets. These are the Woodlawn Zinc-Copper Mine, the Sulphur Springs Zinc-Copper Project, and Pioneer Dome.

It is the latter project that has caught the eye of Bell Potter. It said:

We believe a spodumene DSO mining operation at Pioneer Dome is optimal with respect to the group’s capital management while delivering the fastest route to market for the project. Observed variability in DSO demand during prior cycles suggests acute sensitivities to lithium chemical and spodumene concentrate prices.

As such, we envisage Pioneer Dome production cadence to be highly responsive to lithium chemical supply-demand imbalances. A relatively simple mine, crush and haul operation at Pioneer Dome would have a relatively short ramp-up and ramp-down timeline. We therefore see Pioneer Dome’s economics based on favourable short-term lithium market fundamentals, operating only when DSO offtake and pricing underwrite a restart.

Bell Potter notes that Pioneer Dome could be important for the ASX mining stock. It points out that the cash flow it generates could be used to pay down debt at Woodlawn and fund the construction of Sulphur Springs. The broker explains:

Pioneer Dome’s importance should be seen through the lens of short-term operating cash flow generation. Pioneer Dome operating cash flows could be used to settle outstanding Woodlawn debt, partly finance the construction of Sulphur Springs’ processing plant and provide balance sheet flexibility to enable another mining asset acquisition.

Strong potential returns

According to the note, Bell Potter has retained its buy rating and $6.60 price target on the ASX mining stock.

Based on its current share price of $5.38, this implies potential upside of 23% for investors over the next 12 months.

Commenting on its buy recommendation, Bell Potter said:

Pioneer Dome’s importance lies in its ability to provide timely liquidity for the Group, supporting de-leveraging and financing of Sulphur Springs construction. The resulting financial flexibility would allow DVP to act nimbly on any forthcoming organic and inorganic opportunities.

The post Forget BHP shares, this ASX mining stock could rise 20%+ appeared first on The Motley Fool Australia.

More reading

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• Buying ASX 200 mining shares? Here’s how Rio Tinto, Fortescue and BHP stacked up in April
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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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It has been another rough session for Accent Group Ltd (ASX: AX1), with heavy selling following a fresh update to the market.

At the time of writing, the retailer’s shares are down 14.11% to 53.3 cents.

That drop has pushed the stock back to levels not seen since June 2013, wiping out years of gains.

Shares are now down around 25% over the past month and roughly 71% over the past year.

The move comes after the company released a trading update alongside news of an ASIC investigation.

Let’s take a closer look at the announcement.

Profit outlook cut after tough April

In its release, Accent said trading was broadly in line with expectations through to the end of March, but conditions became more difficult as April progressed.

The company pointed to weaker consumer confidence, higher fuel prices, and geopolitical tensions as key factors hitting both sales and margins.

For the first 18 weeks of the second half, total sales rose 7.1%, though like-for-like retail sales slipped 1%, while gross margin also eased to 54.2%, down 80 basis points on last year.

Those pressures are now starting to show up in the earnings outlook.

Accent now expects the second-half EBIT to land between $23 million and $28 million, including $2 million in restructuring costs tied to a planned cost-out program.

Full-year EBIT is now expected to come in between $79.5 million and $84.5 million.

Back in February, the company was guiding to $30 million to $35 million for the second half, so this has been a clear step down.

ASIC investigation adds uncertainty

Alongside the trading update, Accent confirmed it has received notices from ASIC requesting information as part of an investigation.

The probe relates to suspected contraventions of the Corporations Act tied to trading in the company’s securities between 23 May and 10 June 2025.

The investigation involves CEO Daniel Agostinelli, Non-executive director Michael Hapgood, and another senior employee.

No charges have been laid, and the company said there are no allegations against the business itself.

Accent also noted that Agostinelli’s share sales were pre-approved and that he retains the full support of the board. Hapgood has advised that he did not trade during the relevant period.

The company said it is cooperating with ASIC.

Foolish bottom line

There are a few moving parts here, but the downgrade looks to be doing most of the damage.

The retail environment is already a tough space, and the latest update shows how quickly conditions can turn against the business.

Sales growth is still positive on the surface, but margins and like-for-like performance are going the other way.

The ASIC investigation adds another issue for investors to weigh up, even if no wrongdoing has been alleged.

Personally, I would stay away until things start to stabilise and margins improve.

The post Why Accent shares just crashed to a 13-year low 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are on the lookout for some new portfolio additions, then it could be worth hearing what analysts are saying about the ASX shares named below, courtesy of The Bull.

Are they bullish, bearish, or something in between? Let’s find out.

Commonwealth Bank of Australia (ASX: CBA)

The team at Alto Capital has named Australia’s largest bank as a sell this week.

Due to the bank’s premium valuation, it thinks the risk-reward balance favours taking profit on CBA shares now. It explains:

Australia’s largest retail bank enjoys a dominant position across mortgages, deposits and consumer banking. The company recently reported a record first half cash net profit after tax in 2026 of $5.445 billion, supported by lending growth and strong deposit volumes.

Recently, the share price had re-rated significantly and traded at a premium to domestic peers and global banking counterparts. With much of the operational strength already reflected in the valuation, the risk-reward balance favours taking profits at current levels.

South32 Ltd (ASX: S32)

Over at Fairmont Equities, it has named this mining giant’s shares as a hold this week.

However, the equities firm does believe that South32 shares have potential to rally strongly in the future. It said:

S32 is a diversified mining company. I expect base metals prices to continue trending higher this year to the benefit of S32. After a share price sell-down in February, the stock had mostly recovered by the end of March. I see a clear resistance zone around $4.80. Buyers are also stepping in on any dips. I’m confident S32 will rally strongly moving forward. The shares were trading at $3.935 on April 30.

Worley Ltd (ASX: WOR)

The team at Baker Young is positive on this engineering and construction services company and is tipping it as a buy this week.

It believes that Worley has a positive outlook thanks to its exposure to structural trends such as the de-globalisation of supply chains and energy efficiency. It explains:

Worley is an engineering and construction group. It recently stepped back from underlying earnings before interest and tax growth due to delays on Middle East projects. However, we believe the longer term outlook remains supportive. Structural trends, such as de-globalisation of supply chains and increasing investment in energy efficiency, align closely with WOR’s core capabilities.

Earnings volatility and missed expectations have weighed on sentiment. But the company is trading on an undemanding valuation relative to its medium term growth potential.

The post Buy, hold, sell: CBA, South32, and Worley shares appeared first on The Motley Fool Australia.

More reading

• Are CBA shares a buy amid record $5.5 billion first half cash profits?
• What happened with ASX 200 banks stocks NAB and CBA in April?
• How to shave a decade off retirement with 3 ASX stocks and ETFs
• 3 ASX dividend stocks with 4% yields to buy for a winning income portfolio
• How are Australia’s biggest ASX stocks really tracking in 2026?

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 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.

Commonwealth Bank of Australia (ASX: CBA) shares are slipping today.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed on Friday trading for $173.04. In early afternoon trade on Monday, shares are changing hands for $172.22 apiece, down 0.5%.

For some context, the ASX 200 is down 0.4% at this same time.

If you’ve been following the price charts, you’ll know that shares in Australia’s biggest bank plumbed a one-year closing low of $147.22 on 21 January.

That means, despite today’s dip, CBA shares have gained 17.0% in just over three months.

And that doesn’t include the $2.35 a share fully franked interim dividend CommBank paid out on 30 March. If we add that back into today’s share price, then the cumulative value of CBA stock is up 18.6% since the 21 January lows.

A lot of those gains were achieved in the days following CBA’s half year results (H1 FY 2026) release on 11 February, with investors reacting enthusiastically to the big four bank’s all-time high half year cash profits.

“We have continued to execute our strategy with discipline, maintaining a strong focus on supporting customers while delivering sustainable outcomes for shareholders,” CBA CEO Matt Comyn said on the day.

Which brings us back to our headline question.

Should you buy CBA shares today?

Alto Capital’s Tony Locantro recently analysed the outlook for Australia’s biggest bank stock (courtesy of The Bull).

“Australia’s largest retail bank enjoys a dominant position across mortgages, deposits and consumer banking,” Locantro said.

As for CBA’s profitability, he noted, “The company recently reported a record first half cash net profit after tax in 2026 of $5.445 billion, supported by lending growth and strong deposit volumes.”

Despite that strong result, Locantro believes the ASX 200 bank stock could be trading in overvalued territory.

Summarising his sell recommendation on CBA shares, Locantro concluded:

Recently, the share price had re-rated significantly and traded at a premium to domestic peers and global banking counterparts. With much of the operational strength already reflected in the valuation, the risk-reward balance favours taking profits at current levels.

How does CommBank’s valuation compare to the other big four ASX 200 bank stocks?

CBA shares currently trade on a price to earnings (P/E) ratio of around 28 times.

That compares to a P/E ratio of around 19 times for Westpac Banking Corp (ASX: WBC) shares, a P/E ratio of around 18 times for ANZ Group Holdings Ltd (ASX: ANZ) shares, and a P/E ratio of around 18 times for National Australia Bank Ltd (ASX: NAB).

The post Are CBA shares a buy amid record $5.5 billion first half cash profits? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: CBA, South32, and Worley shares
• What happened with ASX 200 banks stocks NAB and CBA in April?
• How to shave a decade off retirement with 3 ASX stocks and ETFs
• 3 ASX dividend stocks with 4% yields to buy for a winning income portfolio
• How are Australia’s biggest ASX stocks really tracking in 2026?

Motley Fool contributor Bernd Struben 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.

One of the hottest ASX mining stocks to own over the last year has been Viridis Mining and Minerals Ltd (ASX: VMM). 

It is an ASX listed exploration and development company. 

The business has seven projects across three countries, however the majority of the value in the business is focused on its Colossus ionic adsorption clay (IAC) project in Minas Gerais Brazil.

In the last 12 months, this ASX mining stock has rocketed 780% higher. 

That includes 100% year to date. 

However, today, its share price has dipped more than 5%. 

A new report from Bell Potter indicates it could be an opportunity to buy a quality stock at a value. 

Why has this mining stock been rising?

Veridis has been advancing its Colossus rare earths project in Brazil. The project is situated within the highly prospective Poços de Caldas rare earths complex.

Colossus is viewed as one of the most economically compelling rare earths developments worldwide.

A recent economic assessment indicates a potential 20-year initial mine life, alongside a relatively short two-year payback period for a proposed operation at the project.

In addition, rising geopolitical tensions heightened concerns over global supply, with China accounting for around 60% of global rare earths production and more than 90% of refining capacity.

This makes Viridis an attractive rare earths miner. It is well positioned as a potential Western-aligned alternative source of supply. This is along with a large-scale, relatively low-payback project.

What is Bell Potter’s updated view

The broker said the recent 3QFY26 report highlighted the meaningful progress made in derisking the Colossus Rare Earth Project (Colossus) in Minas Gerais, Brazil. 

All equipment for the CPTR/MREC demonstration plant was delivered to site with building works completed and utilities installed, with commissioning targeted for early May 2026.

Bell Potter said VMM had a very busy quarter. Additionally, it is making solid progress across several important parts of its project.

Key workstreams like the feasibility study, engineering contracting, approvals, and commissioning are all approaching important milestones. 

Because multiple steps are advancing at the same time, it lowers the risk that a single problem could cause major delays.

Overall, the message is that the project is tracking well toward its expected final investment decision around Q3 2026.

Speculative buy rating retained

Based on this guidance, Bell Potter has retained its speculative buy rating on this ASX mining stock. 

The broker also has an unchanged price target of $4.30. 

This ASX mining stock has dipped more than 5% this morning, which has created more value moving forward. 

From today’s share price of approximately $2.55, this indicates an upside potential of more than 68%. 

The post Why investors should buy the dip on this ASX mining stock appeared first on The Motley Fool Australia.

More reading

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• Are CBA shares a buy amid record $5.5 billion first half cash profits?
• BrainChip shares rocket 6% on new chip deal
• Why are A2 Milk shares crashing 13% to fresh 52-week lows?
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Motley Fool contributor Aaron Bell 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.

BrainChip Holdings Ltd (ASX: BRN) shares are back in focus on Monday after a new announcement landed before market open.

At the time of writing, the BrainChip share price is up 6.45% to 16 cents.

Adding in today’s increase, the stock has now climbed about 13% over the past month.

But while this shows some momentum, it remains down roughly 35% over the past year on the back of a weakened tech sector.

Here’s what the company just reported to the market.

New licensing deal opens another pathway

In its release, BrainChip announced it has entered into an IP licence agreement with South Korea-based Asicland Co Ltd (KOSDAQ: 445090).

The deal gives ASICLAND non-exclusive, worldwide access to BrainChip’s Akida neuromorphic AI technology. This allows ASICLAND to integrate Akida into its own system-on-chip designs for customers across multiple industries.

There is also a pathway from evaluation into full production.

ASICLAND can start with prototype and testing licences, then convert those into production licences if projects move forward.

BrainChip keeps ownership of its intellectual property and retains the option to work directly with end customers on additional services.

How the commercial model works

The structure follows a familiar model used across the semiconductor IP industry.

There are upfront fees for evaluation and production, along with ongoing royalties tied to chip sales. Extra service fees can also come into play depending on the level of support required.

Management said it’s too early to put a figure on it, but expects the agreement to contribute revenue over time.

ASICLAND is positioned as both an enabler and a channel partner. It designs custom silicon solutions and works with customers across edge AI, industrial, automotive, and IoT markets.

Why investors are paying attention

Deals like this usually get attention because they show the tech is starting to move beyond development.

BrainChip has spent years developing its neuromorphic technology. What investors want to see now is evidence that it is being picked up and used in real products.

This agreement adds another partner to the ecosystem and creates more potential entry points into customer programs.

But while it does not guarantee near-term revenue, it does add more opportunities if these projects move forward.

Foolish Takeaway

This is another step forward for BrainChip, but there is still a significant gap between signing deals and seeing actual revenue.

Licensing agreements only start to matter once they move into production and generate ongoing royalties, which takes time and depends on customer uptake.

With this in mind, I would be watching from the sidelines until these partnerships come to fruition.

The post BrainChip shares rocket 6% on new chip deal appeared first on The Motley Fool Australia.

More reading

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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 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.

ASX share A2 Milk Company Ltd (ASX: A2M) plunged to fresh 52-week lows on Monday. The stock initially fell as much as 18% before recovering to $6.35 in afternoon trade, still down almost 13%.

The decline followed news that the company had recalled multiple batches of infant formula sold in the US over contamination concerns.

Today’s fall comes on top of an already brutal month for the ASX share. It’s now down roughly 31% over the past month as investor sentiment deteriorates quickly.

What triggered today’s sell-off?

The immediate catalyst was a voluntary recall of three batches of A2 Platinum Premium infant formula sold in the US after testing detected trace levels of a toxin known as cereulide.

This is a heat-stable toxin produced by certain strains of Bacillus cereus bacteria. The concern is that it can survive normal food processing and, in sufficient quantities, may cause vomiting and gastrointestinal illness.

While regulators and the ASX share confirmed the issue following additional testing, there have been no reported illnesses linked to the affected products.

Why the market reacted so strongly

Even though the recall is limited, investors reacted sharply for several key reasons. First is reputational risk. Infant formula is one of the most sensitive food categories globally. Even small contamination events can significantly damage consumer trust.

Second is geographic exposure. ASX share A2 Milk earns a large portion of its revenue from China, where food safety concerns are historically heightened. Any negative headlines in this category can quickly influence brand perception and demand.

Third, this is not an isolated scare. Similar cereulide-related recalls have recently affected major global players such as Nestlé SA (XSWX: NESN) and Danone SA (XPAR: BN). This has increased investor sensitivity across the sector.

More than just the recall

The share price weakness is also being driven by broader concerns around execution and earnings momentum.

In April, the ASX share downgraded its FY2026 guidance, citing ongoing supply chain disruptions. The company now expects revenue growth in the low to mid double-digit range. That’s down from previous expectations of mid double-digit growth.

The company also downgraded EBITDA margins. The guidance is now at 14% to 14.5%, compared to the prior range of 15.5% to 16%. As a result, the business expects net profit after tax to be flat or slightly lower than FY2025.

These revisions reinforced investor concerns that operational challenges may be more persistent than previously anticipated.

Foolish Takeaway

The latest plunge in the ASX milk share reflects a combination of factors: a high-profile product recall, worsening sentiment around food safety risks, and already weakening financial guidance.

While underlying demand for infant formula remains solid, investors are clearly waiting for evidence that supply chain issues and execution challenges are under control before stepping back in.

The post Why are A2 Milk shares crashing 13% to fresh 52-week lows? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nestlé. 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.