Author: openjargon

The S&P/ASX 200 Index (ASX: XJO) is having a poor session on Tuesday. In afternoon trade, the benchmark index is down 0.55% to 8,719.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price is down 2% to $1.17. Investors have been selling the energy company’s shares following the release of a disappointing third-quarter update. Beach Energy reported production of 4.8 MMboe for the quarter, which was up 7% on the prior quarter. However, it has downgraded its full year production guidance and now expects FY 2026 production to be in the range of 19.4 MMboe to 20.3 MMboe. This is down from its previous guidance range of 19.7 MMboe to 22.0 MMboe. This reflects a combination of factors, including weather-related disruptions, ramp-up challenges at the Waitsia Gas Plant, and cyclone-related shutdowns.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price is down 10% to $15.96. The catalyst for this has been the release of an update from Domino’s Pizza Inc (NASDAQ: DPZ) in the United States overnight. It revealed same-store sales growth of just 0.9%, which was lower than the 2.3% increase the market was expecting. It also lowered its guidance for the full year. Investors may believe Domino’s Pizza Enterprises could also be struggling in the current environment.

Origin Energy Ltd (ASX: ORG)

The Origin Energy share price is down a further 4% to $11.60. Investors have been selling the energy giant’s shares this week after it released its quarterly report. Origin revealed that March quarter production was lower compared to the prior quarter. It also advised that Integrated Gas revenue was down $247 million compared to the prior quarter at $1,855 million. This reflects lower realised LNG prices. Origin Energy’s CEO, Frank Calabria, said: “Global commodity markets have experienced significant volatility this quarter, with the conflict in the Middle East affecting oil and LNG supply. Changes in oil prices have a lagged effect on Australia Pacific LNG’s long term export contracts, and we do not expect this to flow through to results until FY27.”

Pantoro Gold Ltd (ASX: PNR)

The Pantoro Gold share price is down 10% to $3.44. This follows the release of the gold miner’s quarterly update. Pantoro Gold revealed production of 17,757 ounces of gold, which is down 19.5% quarter on quarter. Also going the wrong way was its all-in sustaining cost, which increased 24.5% to $3,204 per ounce.

The post Why Beach Energy, Domino’s, Origin Energy, and Pantoro Gold shares are dropping today appeared first on The Motley Fool Australia.

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• Why is this $1.5 billion ASX 200 gold stock tumbling 8% today?
• Why are Beach Energy shares sinking today?

Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza and Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is under pressure again on Tuesday, with the benchmark slipping deeper into a short-term slide.

At the time of writing, the ASX 200 is down 0.53% to 8,720 points. That puts the index at a 3-week low and extends a run of recent losses.

The move comes despite a relatively steady lead from the United States, where major indices have been holding near record levels.

Here’s what is behind the latest drop.

Broad weakness across the market

Selling has been fairly widespread today, with most sectors sitting in the red.

Earlier reports showed around three quarters of the ASX 200 trading lower at one point in the session. That lines up with the current price action, with few clear pockets of strength.

The S&P/ASX 200 Financials Index (ASX: XFJ) and S&P/ASX 200 Materials Index (ASX: XMJ) are both softer, down 0.1% and 0.84% respectively. Given their heavy weighting in the index, this tends to hold the ASX 200 back.

Some of the major banks are mixed, while large miners like BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) are edging lower.

The S&P/ASX 200 Health Care Index (ASX: XHJ) is also weaker, down 1.23%, adding to the broader drag on the index.

There are still a few standouts moving higher, but they are not large enough to offset the broader decline.

Oil and macro signals back in focus

One of the key factors sitting over the market right now is oil prices.

Brent crude has pushed higher in recent sessions, trading around the US$109 per barrel mark after a sharp rebound earlier in the week.

That move has been linked to renewed tension in the Middle East, particularly around stalled negotiations involving Iran.

Higher oil prices usually feed into inflation, which is where the market starts to pay closer attention.

Investors are already looking ahead to the next round of inflation data, which could shape expectations around interest rates.

There is also a Reserve Bank (RBA) meeting on the horizon, adding another layer of uncertainty for markets in the near term.

A run of losses starting to build

Today’s decline also adds to a string of recent falls for the ASX 200.

The index is now tracking towards its longest losing streak since mid-2022, which highlights how sentiment has shifted over the past week.

While the moves each day have not been extreme, the consistency of the selling is starting to stand out.

Trading volumes have also been relatively light, which can sometimes amplify short-term moves on the market.

What to watch from here

From here, attention is likely to stay on the macro signals.

Inflation data, which is due tomorrow morning, will be a key input, along with any shifts in oil prices or geopolitical headlines.

The other piece is whether buying interest starts to return at these levels, or if the ASX continues to drift lower in the short term.

The post ASX 200 falls to a fresh 3-week low. Here’s what’s driving the sell-off today appeared first on The Motley Fool Australia.

More reading

• This ASX gold stock just smashed records, so why is it down?
• Greatland Resources posts record March quarter cash build and gold-copper resource growth
• Beach Energy lifts production in Q3 FY26, updates outlook
• Reliance Worldwide resets FY26 outlook, updates on tariffs and Middle East
• Capricorn Metals reports Mt Gibson gold results

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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Origin Energy Ltd (ASX: ORG) shares have slumped another 5% in Tuesday lunchtime trade, to $11.52 a piece.

Today’s decline means the shares have now tumbled nearly 10% since the ASX closed on Friday afternoon. 

For the year-to-date, Origin Energy shares are up nearly 2%, and they’re 10% higher than they were 12 months ago.

Why is everyone selling Origin Energy shares this week?

Origin Energy was one of the strongest performers on the S&P/ASX 200 Index (ASX: XJO) last week. But after the energy provider posted a March quarter update ahead of the ASX open on Monday morning, investors quickly sold off their shares.

The update, which covers Origin Energy’s Integrated Gas, Energy markets and Octopus energy segments, revealed declines across the board.

Its Integrated Gas segment saw lower production over the quarter, primarily reflecting two fewer days in the period, and natural field decline. The segment’s revenue was also down $247 million, on the back of lower realised LNG prices and the Australian dollar’s appreciation against the US dollar.

Its Energy Markets segment saw a 4% increase in sales volumes quarter-on-quarter, but a 32% decline in gas volumes, primarily due to lower trading volumes and lower gas demand for power generation.

Origin Energy’s share of Octopus Energy Group FY26 EBITDA has also been downgraded to between -$70 million and +$30 million. Guidance was previously in the $0-150 million range. Origin said emerging impacts from changes to the Energy Company Obligation scheme, higher gas capacity charges, and adverse weather in the UK in February and March have caused the guidance downgrade.

Origin Energy’s CEO, Frank Calabria, said:

Global commodity markets have experienced significant volatility this quarter, with the conflict in the Middle East affecting oil and LNG supply. Changes in oil prices have a lagged effect on Australia Pacific LNG’s long-term export contracts, and we do not expect this to flow through to results until FY27.

Are the shares still a buy? Or is there more downside ahead?

Data shows that brokers are neutral about Origin Energy shares. 

At the time of writing, TradingView data shows that three out of 10 analysts have a hold rating on the ASX energy stock. Another three have a sell or strong sell rating, and the final four have a buy or strong buy rating.

The average target price is $12.58, which implies a potential 8% upside at the time of writing. But some think the shares could drop 5% to $11.07, and others are more bullish and expect the energy provider’s shares could jump 21% higher to $14.10 a piece.

With lower EBITDA expected this year and the potential for oil and LNG headwinds to continue trickling through into FY27, I expect we could see some more downside ahead for Origin Energy shares this year. 

The post Origin Energy shares slump 10% this week: Buy, sell or hold? appeared first on The Motley Fool Australia.

More reading

• Why Beach Energy, Domino’s, Origin Energy, and Pantoro Gold shares are dropping today
• Why Cochlear, Karoon Energy, Origin Energy, and WiseTech shares are falling today
• Why are Origin Energy shares sinking on Monday?
• Here are the top 10 ASX 200 shares today
• Origin Energy shares: Experts argue the case to buy, hold, and sell

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 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.

Pro Medicus Ltd (ASX: PME) shares are slipping today.

Shares in the S&P/ASX 200 Index (ASX: XJO) health imaging company closed yesterday trading for $138.12. In early afternoon trade on Tuesday, shares are swapping hands for $137.07 each, down 0.8%.

For some context, the ASX 200 is down 0.5% at this same time.

As you’re likely aware, Pro Medicus shares have come under heavy pressure since last July.

Indeed, on 17 July the stock notched an all-time closing high of $330.48 a share. The share price has since crashed 58.5% from that high water mark.

But it’s not just Pro Medicus that has suffered.

While the ASX 200 is up 0.8% since 17 July, the S&P/ASX All Technology Index (ASX: XTX) has tumbled 32.4% over this period as investors sold off a lot of Software as a Service (SaaS) stocks.

In what you may have heard called the SaaSpocalypse, Pro Medicus and many other stocks dependent on their proprietary software have gotten hit amid investors’ concerns that artificial intelligence, or AI, might replace the services these companies provide.

But following the past months’ steep selloff, Medallion Financial Group’s Stuart Bromley now sees “a rare buying opportunity” (courtesy of The Bull).

Should you buy Pro Medicus shares today?

“The company provides medical imaging software and services to hospitals and healthcare groups across the world,” Bromley said.

Citing the first reason he’s bullish on Pro Medicus shares, Bromley noted, “The share price is down significantly in the past year on fears of artificial intelligence impacting the business.”

But that sell-off doesn’t reflect the ASX 200 healthcare stock’s ongoing contract wins. Which is the second reason you might want to buy the stock today.

According to Bromley:

The company continues winning large and long-term contracts. PME recently renewed a five-year, $37 million contract with Northwestern Medicine based in Chicago. The renewal comes with increased minimums and a higher fee per transaction.

Pro Medicus announced that $37 million contract renewal on 13 April.

Commenting on the deal on the day, Pro Medicus CEO Sam Hupert said:

We are extremely pleased that in addition to committing to a second five-year term at an increased fee per exam, Northwestern Medicine have also committed to an increase in their minimums reflecting the growth in their exam volumes since standardising on our platform five years ago.

Summing up his buy recommendation on Pro Medicus shares, Medallion Financial Group’s Bromley concluded, “In our view, PME presents a rare chance to buy a world class software play at a significant discount.”

The post 3 reasons to buy Pro Medicus shares today appeared first on The Motley Fool Australia.

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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 recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX gold stock Greatland Resources Ltd (ASX: GGP) is edging lower today. During Tuesday lunch hour trade, it was down 2.1% to $13.87, even after the company delivered a standout quarterly result.

The gold and copper miner reported a record $260 million cash build for the March quarter, driven by strong production and solid operations. That pushed its closing cash balance to an impressive $1.2 billion.

Despite today’s dip, the $9 billion ASX gold stock is still up 42% over the past month, comfortably beating the roughly 2% gain from the S&P/ASX 200 Index (ASX: XJO).

So, what’s behind the pullback?

A strong quarter on all fronts

Greatland didn’t just perform well; the ASX gold stock delivered across the board.

The company produced 82,723 ounces of gold and 4,128 tonnes of copper during the quarter, keeping all-in sustaining costs (AISC) tight at $2,056 per ounce. It then converted that production into strong sales, moving 97,800 ounces of gold and 4,620 tonnes of copper, generating $742 million in revenue.

Cash flow followed suit. Operations delivered $453 million, lifting total cash to $1,208 million, up sharply from $948 million previously. In short: more metal, more revenue, more cash.

And it’s not slowing down

Management expects full-year gold production to land near — or even above — the top end of guidance. Costs, meanwhile, are tracking toward the lower end of forecasts.

Greatland Managing Director, Shaun Day, commented:

Based on the strong year-to-date performance, we currently expect full-year production to be around, or slightly above, the upper end of the guidance range of 260,000 – 310,000 ounces, and full-year AISC to trend towards the lower end of the guidance range of $2,400 – $2,800 per ounce.

The balance sheet remains a standout. The ASX gold stock carries no debt and sits on total liquidity of $1.28 billion, including an undrawn $75 million facility.

It also retains full exposure to rising gold prices while using put options to soften potential near-term downside.

Growth engine building momentum

Operationally, the company is pushing ahead with its key growth projects.

At Havieron, development is advancing, with permitting progressing and early decline works already underway — steps that help de-risk future production. Meanwhile, resource upgrades at Telfer and O’Callaghans have boosted total group resources to 14.9 million ounces of gold and 645,000 tonnes of copper.

That strengthens the long-term outlook and supports ambitions for a multi-decade mining footprint in the Paterson region.

Drilling is also ramping up, with a massive 240,000-metre program on track this financial year.

So why the drop?

After a 42% surge in just one month, today’s decline of the ASX gold stock looks less like bad news — and more like a breather. Investors may simply be locking in gains following a strong run, even as the underlying business continues to deliver.

Greatland has just posted a powerful quarter, with rising production, surging cash flow, and a rock-solid balance sheet. But when a stock runs this hard, this fast, even good news can trigger a pause.

For long-term investors, the key question isn’t today’s dip. It’s whether the company can keep turning strong operations into sustained growth.

The post This ASX gold stock just smashed records, so why is it down? appeared first on The Motley Fool Australia.

More reading

• ASX 200 falls to a fresh 3-week low. Here’s what’s driving the sell-off today
• Greatland Resources posts record March quarter cash build and gold-copper resource growth
• Beach Energy lifts production in Q3 FY26, updates outlook
• Reliance Worldwide resets FY26 outlook, updates on tariffs and Middle East
• Capricorn Metals reports Mt Gibson gold results

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 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.

S&P/ASX 200 Index (ASX: XJO) shares are down 0.5% to 8,725.3 points on Tuesday.

Among the 11 market sectors, energy is on its own in the green, up 0.3%, after the Brent Crude oil price rose to US$108 per barrel.

Utilities is the worst performer today, down 3.6%.

ASX 200 consumer discretionary shares are also down 1.2% ahead of tomorrow’s crucial quarterly inflation report.

Meanwhile, on The Bull this week, two experts give us their views on three ASX 200 shares.

Let’s take a look.

Sigma Healthcare Ltd (ASX: SIG) 

The Sigma Healthcare share price is $2.76, down 0.5% on Tuesday and down 11% over the past six months.

Sigma Healthcare shares hit a record of $3.28 apiece in June 2025 before enduring a prolonged tumble alongside the broader sector.

Damien Nguyen from Morgans has a buy rating on this ASX 200 healthcare share. 

He explains why:

It has a solid balance sheet with conservative leverage and strong operating cash flows.

We believe SIG can continue to widen margins through expanding labels it owns and exclusive products.

We expect improving operating leverage through efficiencies in the supply chain and consolidation in distribution centres.

A softer share price provides a compelling buying opportunity for long term focused investors.

Macquarie Group Ltd (ASX: MQG)

The Macquarie share price is $231.15, down 0.4% today and up 16% over the past month.

Nguyen has a hold rating on this ASX 200 bank share.

He says:

Macquarie is a diversified financial services group with strengths across asset management, infrastructure and global markets. Its business model benefits from long term infrastructure investment and energy transition themes, but earnings can be volatile due to market conditions.

Recent performance has been solid, and much of the medium term opportunity is already reflected in the share price, in our view. While Macquarie remains a high quality company with strong management, near term upside looks balanced by cyclical and market risks. At current levels, a hold is appropriate.

Macquarie will release its full-year FY26 results next Friday, 8 May.

Santos Ltd (ASX: STO)

The Santos share price is $7.73, up 1% today and up 26% in the year to date (YTD).

Most of that YTD gain has been due to skyrocketing oil and gas prices as the Iran war continues into its ninth week.

Stuart Bromley from Medallion Financial Group has a sell rating on this global energy giant.

We would be inclined to lock in gains given volatile and uncertain energy prices emanating from the conflict in the Middle East.

Bromley points out that Santos shares have risen from $5.92 on 7 January to $7.73 today.

For full-year FY25, Santos reported an 8% fall in revenue due to lower realised prices and a 33% drop in net profit after tax (NPAT).

The post Buy, hold, sell: Sigma Healthcare, Macquarie, Santos shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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.

ASX rare earths stock Oceana Metals Ltd (ASX: OCN) is off to the races on Tuesday.

If you haven’t seen Oceana Metals shares on the boards lately, that’s because the stock entered a trading halt on 13 February pending an announcement about a proposed acquisition.

That announcement has been a long time coming!

But today the ASX rare earths stock is back in action after releasing the long-awaited acquisition news.

And investors are responding very enthusiastically.

On 12 February, Oceana Metals shares closed at 43.5 cents. In earlier trade today, shares were trading for 73.0 cents apiece, up a whopping 67.8%. After some likely profit taking, shares are currently trading for 60.5 cents each, up 39.1%.

For some context, the All Ordinaries Index (ASX: XAO) is down 0.5% at this same time.

Here’s what we know.

ASX rare earths stock rockets on Brazil mine purchase

Oceana Metals shares are surging today after the miner reported that it has entered into a binding agreement with private vendors to acquire 100% of the Serra Negra rare earths and niobium project, located in Brazil.

The ASX rare earths stock said it will acquire the project by purchasing Songeo Mineracao, the company holding the Serra Negra permits. On completion, this will provide Oceans with full ownership and control, enabling it to advance the project through resource definition and development studies.

According to the release, Serra Negra, a 10-kilometre-wide carbonatite complex. This makes it the largest known alkaline carbonatite intrusion in the Alto Paranaiba Igneous Province.

Oceana said it will pay a total upfront and deferred consideration of up to US$10.3 million in cash and shares for the rare earths project, as well as a trailing 2.5% net smelter royalty.

The ASX rare earths stock noted that it has received “firm commitments” for a $20 million share placement, anchored by domestic and international institutional, professional and sophisticated investors. Oceana plans to use the new funds for the Serra Negra acquisition and an accelerated exploration program.

What did Oceana Metals management say?

“This is an outstanding opportunity to acquire a global-scale rare earths and niobium project in a tier-one location,” Oceana Managing Director, Mick Wilson said. “The Serra Negra Project will transform Oceana and give our shareholders exposure to a critical minerals project with huge scope for growth.”

Looking to what’s next for the ASX rare earths stock, Wilson added:

Our recent due diligence and site visit confirmed a large quantity of historic core remains available for re-assay (around 8,000 metres) and our technical team has already made preparations to do this.

At the same time, we are planning surveys of modern geophysics, and plan to commence an accelerated 20,000 metre drill program, in what will be the first drilling program at Serra Negra in well over a decade.

The post Guess which ASX rare earths stock just leapt 68% on big acquisition news appeared first on The Motley Fool Australia.

More reading

• Why Beach Energy, Domino’s, Origin Energy, and Pantoro Gold shares are dropping today
• ASX 200 falls to a fresh 3-week low. Here’s what’s driving the sell-off today
• Origin Energy shares slump 10% this week: Buy, sell or hold?
• 3 reasons to buy Pro Medicus shares today
• This ASX gold stock just smashed records, so why is it down?

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.

A fresh defence-linked update has put Elsight Ltd (ASX: ELS) back in the spotlight on Tuesday.

At the time of writing, the Elsight share price is up 8.51% to $7.27, after earlier touching a new all-time high of $7.33.

It adds to an already strong run, with the stock up about 133% this year and nearly 1,600% over the past 12 months.

Here’s what was announced.

US defence approval opens new door

The key announcement is that Elsight’s Halo platform has been added to the US Defence Contract Management Agency (DCMA) Blue List.

This is a pre-approved list of technologies that meet strict operational, cybersecurity, and supply chain standards set by the US Department of War.

In effect, this allows US military units to procure Halo directly through an approved marketplace, avoiding the longer traditional procurement channels.

That shortens the path from testing to deployment and removes some of the delays that can slow adoption.

The company said Halo had already met the necessary standards for operational reliability and data integrity, which supported its inclusion on the list.

Positioned in a fast-growing segment

The update lands at a time when US defence spending on drones and autonomous systems is expanding.

Elsight pointed to a proposed US defence budget that includes tens of billions of dollars allocated to drone and counter-drone capabilities.

There is also a broader push to scale autonomous systems across military operations over the coming years.

Halo is designed to provide secure, resilient connectivity for drones and unmanned systems, which becomes more critical as deployment increases.

Being added to the blue list means the platform now sits within a system that is already helping fast-track approved technologies into use.

It also means demand is likely to concentrate among vendors that have cleared these hurdles, with fewer players competing across the space.

What investors are watching next

This announcement does not immediately translate into revenue, but it changes the pathway to getting there.

The focus now shifts to whether this approval actually turns into contracts, pilot programs, and repeat orders over time.

Investors will also be watching how quickly Halo moves from being approved to being used across US defence programs.

After such a strong share price run over the last year, expectations are already pretty high.

That leaves execution as the key variable from here, especially when it comes to turning this into real revenue.

Foolish Takeaway

While investors are piling into Elsight shares, the latest update shows why the market has been pushing the stock higher.

The company has secured a position inside a tightly controlled procurement ecosystem, in a segment that is seeing huge investment.

The next step is showing that this access leads to real use, with contracts being signed and the technology being rolled out more widely.

The post Up 133% this year and still climbing: Why this ASX tech stock just hit a record high appeared first on The Motley Fool Australia.

More reading

• Why Elsight, IperionX, Predictive Discovery, and Reliance shares are pushing higher today
• Buy this ASX defence stock with a ‘high ROIC business model’
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• Looking for another DroneShield? Check out this buy-rated ASX defence stock

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.

Xero Ltd (ASX: XRO) shares are trading around $80 on Tuesday.

That is a long way from their 52-week high of $196.52.

When a stock falls that far, it is easy to focus on what has gone wrong. I think it is just as important to ask what could go right from here.

So, could buying Xero shares at these levels actually lead to strong long-term returns and make me rich?

A big gap back to previous highs

One of the simplest ways to think about the opportunity is to look at where the share price has come from.

If Xero were to return to its previous high of $196.52, that would represent a gain of almost 150% from current levels.

That alone is not a reason to buy.

But it does highlight how much expectations have shifted. The market is no longer pricing Xero the way it once did.

The question now is whether the cloud accounting business can grow into something that justifies moving back toward those levels, or even beyond them over time.

The growth engine is still there

Stepping back, the core of the Xero story has not really changed.

It is still a global cloud accounting platform serving small and medium businesses, with millions of subscribers and a growing ecosystem.

Importantly, management continues to highlight a large and expanding total addressable market, supported by both software adoption and new opportunities like payments.

The acquisition of Melio is a good example of that.

By combining accounting with payments, Xero is trying to capture more value from each customer and expand its presence in the US market. That has the potential to drive both revenue growth and stronger unit economics over time.

So this is not a business that has run out of runway. It is still building.

AI looks like an opportunity

Artificial intelligence (AI) is one of the main reasons sentiment has weakened across technology stocks.

For Xero, I think the story is a bit different.

The company is positioning itself as a system of record for small business financial data, with the goal of becoming a system of action and decision-making through AI.

That is important. If Xero sits at the centre of a customer’s financial data, it is in a strong position to layer AI tools on top. That can help automate workflows, generate insights, and improve decision-making.

There are already signs this is happening.

More than two million subscribers are using AI features, and the company is continuing to expand these capabilities across its platform.

Rather than disrupting the business, AI could make the platform more valuable.

The path for Xero shares will not be smooth

Even with all of that, I do not think this is a simple story.

The Xero share price decline reflects real uncertainty.

There are questions around competition, the pace of AI change, and how the business executes in key markets like the US. Sentiment toward tech stocks more broadly also plays a role.

This means any recovery is unlikely to happen quickly.

But for long-term investors, that is often where the opportunity sits. The market tends to be more cautious and undervalue shares when uncertainty is high.

Foolish takeaway

Buying Xero shares at $80 does not guarantee anything.

But it does give you exposure to a business that still has a large market, multiple growth drivers, and the potential to expand its role through AI and payments.

If the company continues to execute and sentiment improves over time, I think the current price could look very different in a few years.

The post Could buying Xero shares at $80 make me rich? appeared first on The Motley Fool Australia.

More reading

• 3 amazing ASX growth shares that continue to stand out
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• 4 reasons to buy Xero shares today
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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 positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in artificial intelligence company FortifAI Ltd (ASX: FTI) surged to a new 12-month high north of $1 per share earlier on Tuesday, after the company announced it has raised new growth capital.

New capital the accelerant

The company said in a statement to the ASX on Tuesday that it had raised $15 million in a strongly supported capital raising at 71.5 cents per share.

The company’s shares took off on the news, racing to $1.01, up 41.3% and a new 12-month high.

The shares have traded as low as 2.5 cents over the past year, meaning some shareholders are sitting on very impressive gains.

The company said the money would be used, “to accelerate technology, marketing and business development of Nol8 Technology, support business development programs for existing assets, strengthen commercial initiatives and general working capital”.

FortifAI non-executive chair Shannon Robinson said of the raise:

We are delighted with the exceptional support for this Placement and welcome a number of highly credentialled institutional investors to the register. The demand achieved, and the at-market pricing secured, are a strong validation of the market’s recognition of Nol8’s world-first technology and the scale of the opportunity ahead. As we look to engage enterprise design partners in the coming quarter, this capital positions the Company to accelerate that process whilst continuing broader business development and growth objectives at Fortifai. We look forward to putting these funds to work and keeping the market informed of our progress.

The company’s No18 division is, it said, “building the foundational AI Data Plane for the era of Autonomous Agents”.

Next-generation technology

The company added:

By combining Neural Network-Based Algorithms with FPGA hardware acceleration, Nol8 delivers unprecedented speed, efficiency, and scale for the world’s most demanding AI data environments. Nol8’s world-first technology has unlocked a previous ceiling to data processing and scalability — enabling enterprise AI systems to operate at the speed of the data stream itself.

The company recently said in a separate release to the ASX that, “testing has demonstrated that a single Nol8 FPGA appliance has been benchmarked to replace the equivalent compute capacity of up to 60,000 CPU’s under AI-grade workload conditions”.

No18 founder Dr Alon Rashelbach said at the time:

These results reframe how enterprises should think about AI infrastructure investment. The question is no longer around how many CPU’s do we need? It is about why are we still using CPU’s at all for this class of workload. A single FPGA appliance replacing 60,000 CPU’s is not an incremental efficiency gain. It is a structural shift in the economics of data infrastructure.

FortifAI was valued at $229.3 million at the close of trade on Monday.

The post Up 3000% over a year, what’s moving this AI company’s shares now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.