Author: openjargon

Two ASX All Ords shares that reported earnings results yesterday are Abacus Storage King (ASX: ASK) and New Hope Corp Ltd (ASX: NHC). 

As earnings results continue to roll in, investors react which can lead to significant share price swings. 

Both of these ASX All Ordinaries (ASX: XAO) shares saw positive movement yesterday following their results. 

Here’s what the companies reported. 

Results overview

Abacus Storage King is an ASX REIT and fully integrated owner and operator of 128 operating self-storage facilities and 21 future-self-storage development sites across Australia and New Zealand.

It released HY26 Results yesterday which included:

• Statutory profit of $71.1 million, up 4.8% on HY25
• Funds from Operations (FFO) of $41.0 million, down 5.3% on HY25
• Net Tangible Assets (NTA) of $1.76 per security, up 1.1% on FY25
• Distribution per security unchanged at 3.10 cents. 

Its share price climbed 2.3% higher on the back of these results. 

Another ASX All Ords stock that reported yesterday was New Hope Corp. 

It is a low-cost thermal coal producer, through its primary operations in New South Wales and Queensland. 

It released Q2 FY26 earnings which included: 

• Group Run of Mine (ROM) coal production: 4.1 million tonnes, up 4.8% from last quarter
• Coal sales: 2.9 million tonnes, up 8.2% from last quarter
• Average realised sales price: $139.0 per tonne, up from $136.6 per tonne
• Underlying EBITDA: $106.9 million for the quarter, and $214.8 million for the first half FY26. 

Its share price rose just over 1% following this announcement. 

One buy and one sell from Bell Potter

Following the results, Bell Potter released fresh analysis on both companies. 

It retained its buy recommendation on Abacus Storage shares on a sector relative basis. 

This was along with a price target of $1.70. 

This indicates an upside of approximately 9.7% from yesterday’s closing price of $1.55. 

We continue to like ASK on a sector relative basis as the sole way to gain exposure to Australian self-storage and, per our recent initiation, there continues to be a disconnect between listed-market storage valuations (ASK now -12% to NTA) and private markets (Brookfield / GIC take-private bid for NSR at +9% premium).

Meanwhile, Bell Potter is bearish on New Hope shares. 

The broker has a sell recommendation, along with an updated price target of $4.10. 

This indicates a downside of 14%. 

We move to a sell recommendation following recent share price strength and a subdued thermal coal price outlook. NHC’s low-cost operations will continue to underpin margins through the coal price cycle, funding capital expenditure commitments and supporting shareholder returns.

The post Broker weighs in on two ASX All Ords shares following earnings results appeared first on The Motley Fool Australia.

More reading

• 3 reasons to buy New Hope shares today
• New Hope Corporation Q2 FY26 earnings: coal sales and EBITDA hold steady
• Abacus Storage King posts profit growth, reaffirms outlook for 2026
• Buy, hold, sell: BHP, Hub24, and New Hope shares
• Here are the top 10 ASX 200 shares today

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.

These two S&P/ASX 200 Index (ASX: XJO) shares have dropped significantly in the past few months.

The headlines on Aristocrat Leisure Ltd (ASX: ALL) and Life360 Inc (ASX: 360) have soured, resulting in 31% and 47% respective share price declines over 6 the past months. Volatility has spiked, and long-term growth strategies have suddenly been labelled broken models.

However, sharp sell-offs often create the best long-term entry points in quality ASX 200 shares. Let’s take a closer look at these battered stocks.

Aristocrat Leisure Ltd (ASX: ALL)

The gloss has come off this $30 billion ASX 200 gaming share. Valuation pressure and rising uncertainty have dragged Aristocrat into ‘cheap’ territory compared with its long-term growth record.

Recent results of the ASX 200 share were uneven. Revenue missed expectations. Even with record machine deployments and resilient recurring earnings from digital gaming, the market focused on the soft spots. Confidence slipped. The share price followed.

However, taking a step back, the core business still looks strong. The ASX gaming group spans land-based machines and digital and mobile platforms. That mix matters. As player behaviour shifts, Aristocrat can pivot. Few rivals match its global scale or depth of content.

Risks remain. Gaming spend moves with economic cycles. Regulators can change the rules quickly. Currency swings can distort earnings. In short, expect choppy short-term numbers.

There are offsets. Management of the ASX 200 share is disciplined with capital, backing buybacks and cutting debt to strengthen earnings quality. Mergers and acquisitions firepower and further expansion in online gaming add optionality. If growth stabilises, the stock could re-rate.

For investors chasing growth with some defensive traits, today’s price range of $49.51 looks compelling. Analysts agree, pointing to potential upside of about 42% and an average 12-month target of $70.36.

Life360 Inc (ASX: 360)

Life360 shares rose 6.8% on Monday to $23.51. A welcome bounce, but far from a recovery. The ASX 200 share is still down 27% year to date and still sits 58% below its October high of $55.44.

What drove the sell-off? Last year, the ASX 200 tech company surged on the back of its new GPS pet-tracking launch. Investors piled in.

Then momentum broke. There was no single price-sensitive shock. Instead, investors banked profits after a strong run. Broader tech weakness added pressure. Fresh fears that AI could disrupt traditional software models hit sentiment again earlier this month, triggering another pullback.

The weakness followed a wider tech correction in late 2025. However, the fundamentals remain solid. Last month, Life360 posted a standout quarterly update. The stock jumped nearly 30% on the result.

Monthly active users hit 95.8 million, which is a record Q4 result. The company added 16.2 million users across 2025 and growth remains strong. But the rally faded fast.

What’s next for this ASX 200 share? Management of the ASX 200 share expects continued user and monetisation growth in its core US market and expanding international regions. After pets, the company plans to target the elderly care segment.

If engagement holds, growth could accelerate. Analysts lean bullish. TradingView data show that 9 of 13 rate the ASX 200 share a strong buy. The top price target sits at $49.13, implying potential upside of almost 109%.

If execution continues, today’s price may look cheap before the next leg higher.

The post 2 bruised ASX 200 shares analysts tip to soar this year appeared first on The Motley Fool Australia.

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• Should you just forget ASX tech stocks after the AI selloff?
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• Are Light & Wonder shares a buy after tumbling 7% yesterday?
• 3 of the best Australian stocks to buy and hold until 2036

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 positions in and has recommended 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.

Clarity Pharmaceuticals Ltd (ASX: CU6) shares were on fire on Monday.

The ASX 300 biotech stock rocketed 25% to end the day at $3.57.

But if you thought you might be late to the party, think again. That’s because Bell Potter believes the company may have just delivered what it calls “a breakthrough moment” and is tipping major upside for its shares from current levels.

Let’s see what the broker is saying.

‘A breakthrough moment’

Bell Potter’s note has been looking at the ASX 300 stock’s new abstract data, which was presented ahead of an upcoming conference presentation. The broker said:

The abstract of Professor Louise Emmett’s upcoming presentation of Co-PSMA data was released over the weekend. The study compared the detection rate per patient between 64Cu-SAR-bisPSMA and 68Ga-PSMA11 in men with biochemical recurrence (BCR) of prostate cancer [..] The aim of the study was to prove that 64Cu-SAR-bisPSMA is a superior agent for the detection of BCR of prostate cancer in men with low PSA levels.

The results were compelling. Bell Potter highlights:

64Cu-SAR-bisPSMA positively identified lesions in 39 of 50 patients (78%), compared to 18 of 50 patients (36%) with 68Ga-PSMA-11 [..] The investigators concluded that 64Cu-SAR-bis-PSMA PET CT identified a statistically higher number of disease recurrences compared to 68Ga-PSMA 11 with a high true positive rate (p <0.0001).

What happens next?

Attention now turns to the AMPLIFY Phase 3 approval study, which is currently recruiting 220 patients. Bell Potter adds:

The stage is now set for a readout from the approval study for 64Cu-SAR-bisPSMA (AMPLIFY)… A similar true positive rate in the approval study is likely to warrant a highly differentiated label claim to currently marketed products for the detection of BCR, particularly in patients with low PSA levels.

Importantly, the broker also points out that supply of 64Cu is secured under long-term arrangements for the US market and that Clarity is well funded, with cash in excess of $226 million at the end of December.

Big potential returns for this ASX 300 stock

In response to the news, the broker has retained its speculative buy rating and $6.40 price target on the ASX 300 stock.

Based on its current share price of $3.57, this implies potential upside of almost 80% for investors over the next 12 months.

However, it is worth highlighting that its speculative rating means this would only be suitable for investors with a high tolerance for risk.

The post Why this ASX 300 stock could be a buy after ‘a breakthrough moment’ appeared first on The Motley Fool Australia.

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

The a2 Milk Co Ltd (ASX: A2M) share price shot almost 7% higher yesterday as the company enjoyed strong earnings season momentum. 

It is in the business of producing, marketing and selling branded dairy and infant milk formula (IMF) products in Australia, New Zealand, China, US and UK. A2M branded milk contains only A2 Protein rather than both A1 and A2 proteins which are found in regular cows’ milk.

What did A2 Milk report yesterday?

The company released 1H26 Results which included revenue up 18.8% on the prior corresponding period.

Underlying EBITDA also grew strongly, up 25.9% to NZ$164.8 million, while underlying net profit after tax increased 19.6%.

A2 Milk also upgraded its guidance for FY2026. 

According to the release, management now expects revenue growth in the mid double-digit percentage range, up from low double-digits. 

Finally, it declared an interim dividend of 11.5 NZ cents per share, up 35.3% year-on-year. 

Investors gobbled up A2 Milk shares following the results, as its share price closed 6.8% higher on Monday. 

It is now up approximately 27% over the last year, despite facing significant volatility. 

What is Bell Potter’s outlook?

Following the results, the team at Bell Potter released updated guidance on A2 Milk shares. 

The broker said Bell Potter said A2 Milk’s 1H26 result was ahead of expectations, with revenue, EBITDA and underlying NPAT all beating forecasts. 

It also highlighted that Infant milk formula (IMF) revenue rose 14%, supported by strong English label growth, while operating cashflow improved and the balance sheet remains solid despite lower net cash following asset transactions.

Additionally, performance at the Pokeno facility was better than expected, with smaller EBITDA losses and improved FY26 loss guidance. 

Management upgraded top-line growth and margin guidance, though operating cash conversion was slightly downgraded and capex increased.

NPAT changes are +8% in FY26e, +5% in FY27e and +6% in FY28e. Changes reflect the performance in 1H26, downward movements in birth rates and changes in FX, interest and a tax rates.

Modest upside

Based on this guidance, Bell Potter retained its hold recommendation on A2 Milk shares. 

It also slightly lowered its price target to $9.55 (previously $9.70). 

From yesterday’s closing price of $9.10, this indicates an upside of approximately 4.95%. 

A2M is likely to benefit from a flight to safety in the near term. Despite the headwinds of lower birth rates, A2M should be capable of delivering reasonable growth to FY28e executing on backward integration, which should be lower risk.

The post What’s Bell Potter’s view on A2 Milk shares after earnings results? appeared first on The Motley Fool Australia.

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• Why A2 Milk, Aurizon, JB Hi-Fi, and Magnetic Resources shares are storming higher today
• A2 Milk shares jump 12% on strong half-year result and guidance upgrade
• The a2 Milk Company impresses with 1H26 earnings—shares in focus
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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.

Webjet Group Ltd (ASX: WJL) shares are in focus today after a disappointing start to the week. 

Webjet is an Australian online travel company known for its popular website that allows customers to compare and book flights, hotels, and holiday packages.

Yesterday, its share price tumbled 2.6%. 

This follows on from the losses from Friday last week which saw Webjet shares tumble more than 20% after the announcement of a failed takeover bid.

What happened?

Helloworld Travel Ltd (ASX: HLO), which already owns a stake in Webjet, made a conditional offer to buy the rest of the company late last year. 

Here is the timeline: 

• 19 November 2025 Webjet announced it had received a non-binding and indicative offer from Helloworld Travel o acquire 100% of the shares in Webjet that Helloworld did not already own by way of a scheme of arrangement at an all-cash price of A$0.90 per share. 
• 21 November 2025 Webjet announced it had received a revised non-binding and indicative offer from BGH Capital to acquire all the shares in Webjet not already owned by BGH and its associates via an off-market takeover at an all-cash price of A$0.91 per share (Revised BGH Proposal).

However, after several weeks of due diligence and negotiations, neither Helloworld nor BGH Capital submitted a formal binding proposal that Webjet’s board felt was certain and attractive enough. 

According to a release Webjet ended the talks and the proposed takeover ended. 

What now?

Webjet management reinforced that its time, focus and resources should return wholly to executing the company’s existing strategy.

After yesterday’s share price fall, Webjet shares are trading at $0.56. 

That’s a decline of 26% across two days of trading. 

It now sits almost 36% lower than the start of the year. 

So, could this be an opportunity to buy the dip?

Morgans weighs in 

In a note out of the team at Morgans, the broker said Webjet has downgraded its FY26 EBITDA guidance by another 7-9%.

Earnings uncertainty remains high given cyclical and structural threats and at a time when WJL is investing in its business for longer term success. 

Given WJL is no longer in play, focus returns to the fundamentals of the business which look challenged in the near term.

The broker has retained a hold rating on Webjet shares. 

It also has updated its price target to $0.61.

From yesterday’s closing price, that indicates an upside of approximately 9%. 

Based on this target, it seems any further share price dip could make it an attractive buy-low option. 

The post Where to next for Webjet shares after a 26% crash? appeared first on The Motley Fool Australia.

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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.

ASX All Ords share Humm Group Ltd (ASX: HUM) had a rough start to the week.

Shares in the diversified financial services company closed on Monday trading for 68.5 cents apiece, down 3.52%.

For some context, the All Ordinaries Index (ASX: XAO) closed the day up 0.27%.

That loss sees Humm shares down 0.72% since this time last year.

Though those losses will have been greatly eased by the two fully-franked dividends the ASX All Ords share paid out over the past 12 months. Humm shares currently trade on a fully-franked trailing dividend yield of 3.28%

Following Humm’s half-year results release (H1 FY 2026) last Wednesday, the team at Ord Minnett reiterated their buy rating on Humm shares, forecasting a much more profitable year ahead for stockholders.

What did Humm report?

For the six months to 31 December, Humm reported statutory profit (after tax) of $13.9 million, up 13% from the prior half year (H2 FY 2025). Assets under management of $5.4 billion were down 1.9%.

The ASX All Ords share declared a fully-franked interim dividend of 1.5 cents per share. At Monday’s closing price, that represents a pending yield of 2.2%.

If you’d like to bank that passive income payout, you’ll need to own shares by market close this Wednesday. Humm shares trade ex-dividend on Thursday, 19 February.

Commenting on the half-year results, Humm CEO Angelo Demasi said:

1H26 demonstrates disciplined execution, stable net interest income and net interest margin through the cycle. Credit quality remains robust, supported by ongoing enhancements to origination scorecards and a continued focus on higher‑quality assets.

Why Ord Minnett is bullish on this ASX All Ords share

Commenting on Humm’s half-year results, Ord Minnett noted:

Humm Group’s 1H26 was a slight miss at the reported line, however this was skewed by a number of ‘one-off’ charges – when we focus on the Net operating income line, it delivered a 1% beat against our forecasts.

And Ord Minnett was pleased with the net interest margin Humm managed to achieve.

According to the broker:

Whilst were slightly softer, net interest margin of ~5.5% was a pleasant surprise. The business is clearly in a transformation phase (with investments being made in the humm loan product, the transformation) – once completed, these should put HUM in a stronger footing to deliver growth.

Connecting the dots, Ord Minnett said, “With the stock trading on only 8.9x PE [price to earnings ratio] for FY26, we retain our buy rating on valuation grounds.”

Ord Minnett has a price target of 87 cents per share for the ASX All Ords share. That represents a potential upside of 27% from Monday’s closing price.

The post Why this buy-rated ASX All Ords share is tipped to surge 31% 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 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.

Yesterday afternoon, PEXA Group Ltd (ASX: PXA) announced plans to exit its majority-owned Digital Solutions businesses, leading to around $26 million in net impairments and an update to its FY26 guidance.

What did PEXA Group report?

• Decision to exit majority-owned Digital Solutions businesses, classified as ‘held for sale’ and discontinued operations
• C$26 million in net impairments expected to be recognised
• Significant items of $7–8 million to be recognised in 1H26, excluding impairments
• FY26 group revenue guidance restated to $395–415 million, down from $405–430 million previously
• FY26 group EBITDA margin guidance upgraded to 34–37% (from 32–35%)
• FY26 group core NPAT guidance lifted to $15–25 million (from $5–15 million)
• FY26 group CAPEX guidance reduced to $50–55 million (from $60–65 million)

What else do investors need to know?

PEXA’s move comes after a strategic review found the Digital Solutions businesses weren’t the best long-term fit for the group. These businesses, including Value Australia and .id, will be divested by mid-2026, and their financials will be reported as discontinued operations for FY25 and FY26.

Costs related to redundancies and restructuring of around $7–8 million will be recognised in the first half of FY26. The company expects its cost optimisation program to deliver more than $10 million in annual cash savings. Management has already completed exits from Land Insight and Elula, with sale proceeds to be used for future growth initiatives.

What did PEXA Group management say?

CEO and Group Managing Director of PEXA Russell Cohen said:

Our decision to exit the Digital Solutions businesses reflects our disciplined focus on our core capabilities to drive long-term, profitable growth for our shareholders. While quality assets with strong management teams, the strategic review confirmed that PEXA was not the best long-term natural owner of these businesses… management is fully focused on accelerating our growth strategy and unlocking value from existing operations and future opportunities.

What’s next for PEXA Group?

PEXA is now focused on its core operations, integrating remaining relevant products into its “Australia” segment, and targeting continued growth in its home and UK markets. Updated guidance points to improved profit margins and cash efficiency, with capital redeployed to support the group’s long-term strategy.

Investors can expect a full update and results commentary at the 1H26 results briefing on 27 February 2026. The company will continue to seek opportunities to unlock value from its core platform and maintain a disciplined approach to capital management.

PEXA Group share price snapshot

Over the past 12 months, PEXA Group shares have risen 17%, outperforming the S&P/ASX 200 (ASX: XJO) which has risen 5% over the same period.

View Original Announcement

The post PEXA Group: Divestment drives strategy shift 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 PEXA Group. The Motley Fool Australia has positions in and has recommended PEXA Group. 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 summary of the company announcement. 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.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 Life360, Technology One, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Life360, WiseTech Global, and Xero. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors will not hear from Coles Group Ltd (ASX: COL) this earnings season until much later this month. Coles is scheduled to drop its latest half-year earnings report on 27 February, meaning we have quite a few ASX 200 shares to get through before we hear from the supermarket operator. So today, let’s talk about the current Coles stock price and whether it is cheap enough for me.

I’ve long advocated Coles stock as a dividend investment, perfect for income-focused investors. Its nature as a defensive consumer staples stock makes Coles a reliable provider of dividend paycheques. This is evident in Coles’ impressive dividend track record, which has seen this company reward shareholders with an annual dividend hike every year since 2019.

However, I am not an investor who solely prioritises dividend income. I try to aim for the highest absolute returns possible in my own portfolio, whether those returns come from dividends or from capital growth.

As such, I don’t own Coles shares at the present time. But I wouldn’t be opposed to adding this company to my portfolio, given its clear moat, pricing power, and huge store network. It would have to be at the right price, though.

So what is the right price for Coles?

What share price would I buy Coles stock at?

Well, it’s not the price at the time of writing of $22.98. At this stock price, Coles is trading on a dividend yield of 3.12%. That means its shares would need to appreciate by a compounded 5.1% per annum over the years ahead just to keep up with the long-term return of the market (8.2%). That is certainly possible, but unlikely in my view. Last year, Coles reported underlying profit growth of 3.1% for its FY2025. If profits grow at 3% per annum on average going forward, it’s unlikely that its share price growth will meaningfully exceed that growth rate.

I estimate that for Coles to be a consistent market beater, it would need to have a dividend yield of at least 5%. Given Coles paid out 69 cents per share in fully-franked dividends over 2025, we would need to see the company’s share price drop to about $13.80 to reach a 5% dividend yield.

I’d be happy to pay $14.50 or even $15 for Coles stock, since the company has a strong track record of increasing its dividends. But I wouldn’t be paying anything close to $20, let alone the $22 the company is going for at the time of writing.

So while I still hold the view that Coles is a strong income stock, I don’t see it as a long-term market beater at current prices.

The post Here’s the share price I would buy Coles stock at appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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.

The NextDC Ltd (ASX: NXT) share price is trading 1.93% lower today at $13.75.

However, despite edging lower on Monday, NextDC shares are up almost 10% over the past month. That compares with a roughly 18% decline in the S&P/ASX All Technology Index (ASX: XTX) over the same period.

So why is this S&P/ASX 200 Index (ASX: XJO) stock holding up?

Let’s take a closer look.

Why are tech stocks under pressure?

The recent sell-off has been driven by a reset in expectations around artificial intelligence (AI).

Over the past year, many technology stocks rallied strongly on the back of AI optimism. Valuations expanded as investors priced in rapid revenue growth and long-term margin expansion.

In recent weeks, that enthusiasm has cooled. Markets are reassessing how quickly AI spending will convert into earnings, particularly for software and platform businesses still investing heavily.

As a result, higher growth companies have seen valuations compress sharply. That change in sentiment has weighed on the broader technology sector, including ASX-listed tech stocks.

What does NextDC do?

NextDC is not a software company. It develops and operates data centres that provide colocation and connectivity services to enterprises, cloud providers, and government customers.

It owns and runs the physical infrastructure that houses servers and network equipment. These facilities are critical for cloud computing, digital services, and increasingly AI workloads, which require significant computing power and secure environments.

Because of this model, NextDC generates recurring revenue from long-term customer contracts and capacity utilisation rather than from software licence or subscription sales.

Recent developments

Today, the company received development approval for its M4 Melbourne data centre project. This supports its expansion pipeline and reflects continued demand for high-quality data centre capacity in major metropolitan markets.

NextDC has previously highlighted growth in contracted utilisation and a rising forward order book. This provides greater visibility over future revenue as new capacity comes online.

The business continues to invest heavily in new facilities, with capital expenditure directed toward expanding its national footprint and supporting customer growth.

Is it a buy?

NextDC’s outperformance relative to the broader tech sector suggests investors view it more as infrastructure than as a high-growth software stock.

Structural demand for data storage, cloud services, and high-performance computing remains solid. Even if sentiment toward software companies stays weak, the need for physical data centre capacity is unlikely to fade.

That said, the business operates in a capital-intensive industry and continues to invest heavily in expansion. It also trades on growth expectations, which can leave the share price exposed during periods of market volatility.

NextDC may appeal to investors seeking exposure to the infrastructure underpinning digital and AI growth.

The post This ASX 200 tech stock is defying the AI sell off. Is it a buy? 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 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.