Author: openjargon

There are not too many ASX-listed exchange-traded funds (ETFs) that offer both high passive income and strong capital growth potential for retirees. I believe WCM Quality Global Growth Fund (ASX: WCMQ) could tick all of the boxes – that’s why I’ve started building a position in the fund myself.

The fund manager WCM Investment Management, is in charge of making the investment picks for the ASX ETF – WCM is based in California, far away from the noise of Wall Street.

The WCMQ ETF has numerous positives, so let’s get into those to see why it’s so appealing for retirees.

Quality diversification

This fund aims to own between 20 to 40 positions from across the global share market.

Its current portfolio is nicely spread throughout the world, with a 56% allocation to the Americas, 23% to Europe, 17% to Asia Pacific and 4% to ‘other’. I like how significantly less of its portfolio is invested in US shares than many other ASX ETFs and managed funds.

The businesses that WCM invests in are not just random names picked from the global share market because they’re a particular size or from a certain industry.

This ASX ETF is looking for businesses that the WCM investment team see as having improving/expanding economic moats. In other words, their competitive advantages are strengthening and their ability to generate profit is getting even better over time. It’s a great sign for future shareholder returns.

On top of that, the ASX ETF’s investment team also want to see that the businesses have a corporate culture that supports improvements in the competitive advantages. I think it’s a winning formula.

Solid dividend yield for retirees

This fund aims to provide investors with an annualised distribution yield of a minimum of 5%. While that’s not the biggest dividend yield around, I think it’s a great middle ground – it provides a solid yield, while not being too high and unsustainable.

As the net asset value (NAV) of the ASX ETF increases, its distribution will increase, so I believe there will be pleasing long-term distribution growth, though it won’t necessarily see an increase every single period.

I should also note that the ASX ETF pays quarterly, so investors are getting a pleasing level of payment frequency.

Great returns drives capital growth

Past performance is not a guarantee of future returns, of course. But, the strategy that this fund follows has returned an average of 16.5% per year over the last 10 years (the ASX ETF itself is not 10 years old yet).

Since the ASX ETF’s inception, it has returned an average of 14.7% per year from August 2018 to April 2026. If it can continue to deliver good double-digit returns, then the fund can deliver both a good yield and the remainder of the return will translate into good capital growth for investors.

With its investment strategy and long-term track record, I’m optimistic it can perform well in most economic environments, making it a useful long-term pick for retirees.

The post Why this ASX ETF is a retiree’s dream appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Wcm Quality Global Growth Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

SpaceX filed its S-1 registration document with the SEC on 20 May 2026 and is preparing to kick off its investor roadshow on 8 June.

Trading on the open market is anticipated to start in late June under the ticker SPCX.

The company is targeting a valuation of between US$1.7 trillion and US$2 trillion.

If it prices anywhere near that range, the deal would surpass Saudi Aramco’s 2019 listing as the largest IPO in history by a wide margin.

Goldman Sachs is leading the deal, and retail investors are earmarked for 30% of the float, three times the standard mega-cap norm.

For Australian investors, unfortunately, SpaceX will not be available on the ASX.

The question for ASX investors is how to participate in the excitement the SpaceX IPO is generating from within the Australian market.

Two options stand out.

The SpaceX S-1: what the numbers actually show

Before diving into the ASX plays, it is worth understanding what SpaceX has disclosed about its own finances.

SpaceX generated $18.7 billion in total revenue for full-year 2025, up 33% year-on-year, with Starlink contributing $11.4 billion, or 61% of total revenue.

On an adjusted EBITDA basis, the company reported $6.6 billion in profit for 2025, however SpaceX posted a GAAP net loss of $4.94 billion for full-year 2025. This was driven by stock-based compensation, depreciation on the Starlink constellation, and AI infrastructure capex.

In Q1 2026, that trend accelerated with a net loss of $4.28 billion in a single quarter alone. That is an important caveat for investors who will be tempted to buy SPCX on day one.

SpaceX is a remarkable and transformative business but is not yet a conventionally profitable one.

That makes the two ASX alternatives potentially more attractive on a risk-adjusted basis.

Betashares Space Industry ETF (ASX: RCKT)

The Betashares Space Industry ETF is the most accessible way for Australian investors to participate in the SpaceX IPO excitement without buying SpaceX directly.

RCKT units floated at $14 on 12 May 2026 and have gained approximately 12% since launch. The underlying Solactive Space Industry Index has returned 249% over the twelve months to 31 May 2026.

RCKT tracks the Solactive Space Industry Index, which holds 28 companies across the global space economy, with its two largest positions being Rocket Lab USA and AST SpaceMobile at 12.6% each.

Rocket Lab has risen significantly over twelve months and AST SpaceMobile has surged on confirmation of its first commercial satellite communications service with major US carriers.

Importantly for ASX investors, SpaceX would need to meet index inclusion criteria after listing before RCKT could hold it, a process that could take months.

However, as the roadshow generates headlines this week and next, RCKT is likely to keep attracting investor attention.

Electro Optic Systems Holdings Ltd (ASX: EOS)

The second ASX option is less obvious but equally interesting.

Electro Optic Systems Holdings is primarily known as a defence stock. The stock having risen approximately 550% over the past twelve months on the back of a record contract pipeline in counter-drone and directed energy systems.

What fewer investors appreciate is that EOS also operates a dedicated Space Systems division. This division provides laser tracking and communications technology for satellite operators around the world.

At its AGM, EOS chair Garry Hounsell confirmed the company’s turnaround phase is now complete and that 60% to 80% of its $726 million order book is expected to convert to revenue in 2026 and 2027.

SpaceX’s Starlink constellation now has more than 10,300 satellites in orbit. Moreover, the company has filed applications to deploy up to 42,000 in total.

Every satellite launched creates demand for the precision tracking and communications infrastructure that EOS provides through its Space Systems division.

As the SpaceX IPO draws global attention to the space economy, EOS offers Australian investors a way to participate that is backed by contracted revenue rather than pre-IPO speculation.

The risks

Both RCKT and EOS carry meaningful risk.

RCKT’s top holdings are pre-profit companies whose valuations reflect enormous future potential.

If the SpaceX IPO disappoints or the broader technology sector rotates lower, RCKT units could give back a significant portion of recent gains quickly.

EOS carries its own risks: contracts are lumpy, defence spending can be reprioritised, and the space division remains a small part of overall revenue.

Neither is suitable for investors who cannot tolerate volatility.

Foolish takeaway

The SpaceX IPO is coming soon, and the excitement is already moving markets.

Australian investors cannot buy SPCX directly on the ASX, but RCKT and EOS each offer a distinct way to participate in the space economy boom that SpaceX is generating.

For investors who believe the commercial space economy has years of growth ahead, both deserve a place on the watchlist.

The post The SpaceX IPO is coming. Here’s how ASX investors can benefit from the excitement appeared first on The Motley Fool Australia.

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• These ASX stocks have hit the ground running in June – can they keep rising?
• What are the best performing thematic ASX ETFs right now?
• 3 top ASX shares at 52-week highs I’d still buy
• This ASX ETF has soared because of the upcoming SpaceX IPO
• Why are Electro Optic Systems shares up more than 10% today?

Motley Fool contributor Mark Verhoeven 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 Electro Optic Systems. 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.

An uncertain economy can make dividend investing more difficult.

When households are under pressure, business confidence is mixed, and interest rates remain a key focus, income investors need to be selective, especially for a retirement portfolio.

With that in mind, here are three strong ASX dividend shares that could be top options for retirees right now.

APA Group (ASX: APA)

The first ASX dividend share to look at is APA Group.

APA sits behind a large part of Australia’s energy system. Its pipelines, storage assets, processing facilities, and power infrastructure help connect energy supply with demand across the country.

That gives the business a useful role in a period of economic uncertainty. Energy security remains important whether the economy is strong or weak. Households, businesses, manufacturers, and utilities all need reliable energy infrastructure to keep operating.

APA is also positioned in a part of the market where long-life assets matter. Pipelines and related infrastructure are not easy to replicate, and that can support more predictable cash flows than many cyclical sectors.

The market is forecasting a 5.7% dividend yield from APA shares in FY 2027.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that could be worth a look is HomeCo Daily Needs REIT.

This property trust is focused on retail and services assets that sit close to everyday spending. Its centres are built around categories such as supermarkets, pharmacies, medical services, childcare, large-format retail, and other regular-use tenants.

That matters when the economy is uncertain. Consumers may delay big-ticket purchases or cut back on discretionary spending, but many daily needs categories remain part of normal household life.

HomeCo Daily Needs REIT therefore offers a different type of property exposure from trusts that depend heavily on office demand or fashion-focused shopping centres.

Overall, the trust’s tenant mix and convenience-based assets could make its rental income more resilient than many parts of the property market.

HomeCo Daily Needs REIT is expected to provide income investors with a 7% dividend yield in FY 2027.

Telstra Group Ltd (ASX: TLS)

A third ASX dividend share to consider is Telstra.

Telstra’s strength is its position in essential connectivity. Its mobile network, fixed-line services, and enterprise products help support how Australians communicate, work, bank, shop, and access digital services.

That makes the telco giant less exposed to some of the pressures facing more discretionary sectors. Consumers may reduce spending elsewhere, but phone and data services have become hard to cut from household and business budgets.

Telstra has also become a simpler business in recent years, with management focused on mobile leadership, cost control, and improving returns from its core operations.

Competition remains a risk, but in an uncertain economy, a dominant telecommunications business with defensive earnings can still be highly valuable.

The market is expecting Telstra to pay a 21.5 cents per share fully franked dividend in FY 2027. This represents a forward dividend yield of approximately 4.1%.

The post 3 strong ASX dividend shares for retirees to buy 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 positions in and has recommended Apa Group and Telstra Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX share market is a great place to find investments that can pay significant dividend yields to investors. It’s my preferred place for unlocking passive income.

Aside from the huge yield, it’s also possible to find investments that can deliver growing payouts. They are not just a term deposit with a larger yield. Hopefully, the ASX shares can deliver capital growth too.

Below are two of my favourite picks for a dividend yield that’s above 8%.

Hearts and Minds Investments Ltd (ASX: HM1)

This business is a listed investment company (LIC) that operates very differently from most other LICs.

Its portfolio is partly decided by a core group of permanent fund managers and the rest of the portfolio is made up of ‘best pick’ choices from investment professionals who pitch their idea at an annual investment conference.

All of the investment decisions are given for free by these investment professionals so that Hearts and Minds can donate 1.5% of its net assets for medical research.

The investment performance of the LIC’s portfolio is being used to pay a stable and growing payout. It intends to increase its dividend by 0.5 cents per share every six months for the foreseeable future.

That suggests the next 12 months of dividends could come to a grossed-up dividend yield of 10%, including franking credits, at the time of writing.

I also like that the business can provide investors with a pleasing level of diversification because of the types of shares it invests in from across the world.

Future Generation Global Ltd (ASX: FGG)

Future Generation Global is another LIC with a noble cause. It donates 1% of its net assets each year to youth mental health charities.

Its investments are the funds of various fund managers who work for free to enable the philanthropy. This ASX share gives investors significant diversification because it’s invested in thousands of underlying businesses – not many investments on the ASX can do that.

Future Generation Global has a number of positives, not just the donations but also the large dividend payments.

The ASX share has steadily grown its regular annual dividend per share each year since 2019. The annual 2025 dividend comes to 11 cents, including the 3 cent per share special dividend, which translates into a grossed-up dividend yield of 9.5%, including franking credits, at the time of writing.

The post 2 ASX shares with dividend yields above 8% appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Global and Hearts And Minds Investments. 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 new report from Global X has explored the pros and cons of passive and active ASX ETFs. 

The decision between active and passive is an important one for investors. 

What’s the difference?

There are now hundreds of ASX ETFs for investors to choose from. 

ETF providers design these products in many different ways. 

One key distinction is whether the fund simply tracks an index or is actively managed to beat the returns of an index. 

Passive ETFs aim to track a market index. They follow a rules-based approach, holding securities in the same proportions as a benchmark such as a broad equity index like the largest 300 companies in Australia or a bond index.

An example would the Global X Australia 300 ETF (ASX: A300). 

It seeks to provide investors with a return that tracks the performance of the FTSE Australia 300 Index.

Meanwhile, active ETFs aim to beat the market and do not track an index. 

Portfolio managers make investment decisions, such as selecting securities, adjusting exposures, and responding to market conditions, in an effort to generate excess returns above the index.

Understanding fees 

According to Global X, fees are often the most visible but misunderstood difference between the two approaches.

Passive ETFs are typically much cheaper because they don’t require research teams or frequent trading. 

Average expense ratios sit around 0.36% per year for passive ETFs (i.e. $36 per year for a $10,000 investment) versus roughly 0.78% for active ETFs (i.e. $78 per year for a $10,000 investment).

The $42 per year gap in fees may seem small, but over time it compounds. Higher fees reduce net returns year after year, which is why cost is often described as one of the few variables investors can control.

Why passive has gained market dominance 

The report from Global X highlighted that passive investing has grown rapidly over the past two decades for the following reasons:

• Consistent returns – Passive ETFs are designed to deliver the return of the market. They also avoid the risk of underperformance tied to poor manager decisions and avoids key person risk if a particular fund manager decides to leave.
• Lower costs – With minimal trading and no need for stock-picking teams, passive ETFs pass cost savings directly to investors. Lower trading costs, reduced tax impacts, and lower overall fees all help ensure more of the returns remain in investors’ pockets.
• Transparency and simplicity – Investors can easily understand what they own, as passive ETF holdings are typically disclosed daily and tied directly to an index. Active ETFs typically don’t disclose their full holdings and sometimes only periodically reveal them with a three-month lag.
• Long-term evidence – After fees, many active managers struggle to consistently outperform benchmarks over long periods.

These factors have led to a market dominance in terms of funds under management for passive ASX ETFs. 

A blended approach 

According to Global X, there is a case to be made for a combination of both ASX ETFs. 

Active ETFs may justify their higher fees when investors seek access to niche opportunities, enhanced risk management, or exposure to less efficient markets. In these cases, skilled managers can potentially add value. 

They can also serve as a tactical complement to a broader passive investment portfolio.

Ultimately, the most effective portfolios are not built on ideology but on thoughtful allocation, where cost, conviction, and context all play a role.

The post Are passive or active ASX ETFs a better investment choice? 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.

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) fought back from a poor start to end the day only a fraction lower. The benchmark index dropped slightly to 8,724.4 points.

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

ASX 200 to rise

The Australian share market looks set for a better day on Wednesday following a positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 37 points or 0.4% higher. In the United States, the Dow Jones rose 0.45%, but the S&P 500 rose 0.15% and the Nasdaq edged slightly higher.

Oil prices rise

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good session after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.5% to US$93.54 a barrel and the Brent crude oil price is up 0.9% to US$95.87 a barrel. This has been driven by concerns over rising tensions between the US and Iran.

Buy 4D Medical shares

Bell Potter remains bullish on 4DMedical Ltd (ASX: 4DX) shares. This morning, the broker has retained its speculative buy rating on the medical technology company’s shares with an improved price target of $6.00 (from $4.85). It said: “The clinical data from the CLEAR study will provide the necessary evidence to further support broad adoption for diagnosis of PE [Pulmonary Embolism]. Outpatient reimbursement will continue under the existing category III CPTA codes paid at US$650/scan. TAM for this market is estimated at $2.5bn annually.”

Gold price rises

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a decent session on Wednesday after the gold price rose overnight. According to CNBC, the gold futures price is up 0.3% to US$4,519.2 an ounce. Traders appear to believe the precious metal has been oversold.

Hold Graincorp shares

Bell Potter thinks Graincorp Ltd (ASX: GNC) shares are fully valued. This morning, the broker has retained its hold rating on the grain exporter’s shares with a reduced price target of $5.20 (from $5.90). It said: “In the June report we noted a seven year low in east coast winter crop acreage sown and a seven year low in southeastern (VIC/NSW/SA) canola production. Key months are now the August-September window, which are crucial for yield development in a potentially dryer backdrop.”

The post 5 things to watch on the ASX 200 on Wednesday 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.

It’s been a fast start to the month of June for several ASX stocks.

Stocks hitting 52-week highs after big gains on Tuesday included: 

• Alcoa Corporation (ASX: AAI)
• Electro Optic Systems Holdings Ltd (ASX: EOS)
• Develop Global Ltd (ASX: DVP)
• SRG Global Ltd (ASX: SRG). 

Many holders of these companies will likely be considering profit taking after considerable gains, while those on the outside looking in might be curious if there is further value. 

Here is what experts are saying. 

Alcoa keeps steaming ahead

Alcoa is a global industry leader in bauxite, alumina and aluminium products.

It rose almost 2% yesterday to hit new yearly highs of over $110 per share. 

It has been spurred on this year by healthy earnings results and a solid dividend.

In the last 12 months its share price is now up over 168%. 

Based on analyst forecasts, it appears there are mixed views on how much further upside is in store. 

9 analysts out of 17 still rate the stock as a strong buy, however the average 12 month forecast sits at $107.88, right around current levels. 

Electro Optic Systems still generating buzz

Electro Optic Systems is an Australian company that develops and produces advanced electro-optic technologies. The company’s products are used in space information and intelligence services, optical, microwave and on-the-move satellite products, optical sensor units, and remote weapons systems for land, sea, and air.

It has benefited from global defence spending over the last couple of years, and now sits more than 500% above levels from a year ago. 

When stocks explode this much in a short period, brokers and analyst ratings can lag, as markets reassess true value. 

That seems to be the case here, as Electro Optic Systems still has plenty of tailwinds working in its favour.

At the same time, broker targets indicate it is fully valued. 

However the team at The Motley Fool has consistently covered key contract wins and exciting updates that indicate it could continue rising. 

Develop Global hits new highs 

Develop Global shares rose an impressive 3% yesterday to hit fresh 52-week highs of $6.47 per share. 

The mineral exploration and development company has now seen its share price rise 65% over the last year. 

Bell Potter recently placed a price target of $7.10 on this ASX mining stock, indicating it still has modest upside potential. 

The broker is optimistic after Develop Global won a new contract at the Finniss Lithium project with Core Lithium.

SRG Global soars 16% in single session

Yesterday, SRG Global shares rocketed 16% in a single day following an earnings guidance upgrade. 

According to an ASX release, the company has secured $1.85 billion of contracts with blue-chip clients across a diverse range of sectors.

The impressive rise now takes its 12 month gain to nearly 140%. 

It closed trading yesterday at $3.66 per share. 

Unfortunately for prospective investors, it now appears to be fully valued. 

Analysts forecasts via TradingView have an average one year price target of $3.35 on this ASX stock. 

The post These ASX stocks have hit the ground running in June – can they keep rising? appeared first on The Motley Fool Australia.

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• Why DroneShield, Pro Medicus, SRG Global, and Woodside shares are charging higher today
• Guess which ASX 200 share is jumping 17% on earnings guidance upgrade
• Why are Electro Optic Systems shares up more than 10% 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 positions in and has recommended Electro Optic Systems. The Motley Fool Australia has recommended Srg Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Qantas Airways (ASX: QAN) shares closed 2% lower on Tuesday afternoon, at $9.21 a piece. 

The airline has faced significant headwinds so far in 2026 as conflict in the Middle East and rising fuel prices put airlines under pressure. The shares are now down 12% for the year-to-date and 14% lower than a year ago.

The airline’s shares might be tumbling, but I think now is a great time for investors to snap up the shares for cheap. Here’s why.

5 reasons to buy Qantas shares

1. It is a dominant airline stock

The aviation heavyweight has dominated the Australian domestic aviation market for decades. The company currently has a duopoly in the market alongside rival Virgin Australia Holdings Ltd (ASX: VGN). Together the two companies control around 99% of Australia’s aviation market. However, Qantas’ share of the domestic market currently accounts for around 60%, and it’s still growing.

2. Its fuel exposure are hedged in H2 FY26

Tensions in the Middle East are ongoing and each time it looks like the US and Iran are about to reach a peace agreement, something shifts. The uncertainty continues to severely restrict the supply of oil out of the region, and given jet fuel is Qantas’ largest operating expense, it could affect the company’s earnings. But the good news is that Qantas is working effectively to minimise costs. The company said that around 90% of its second-half fuel exposure is already hedged. Its plan to increase fares and make some route changes will also help to recover part of the fuel price pressure.

3. Travel demand is stronger than expected

Despite cost-of-living pressures and higher airfares, demand for domestic, international, and corporate travel remains high. In fact, in April, Qantas significantly upgraded its second-half FY26 revenue guidance off the back of strong demand and capacity shifts despite higher fuel costs. The airline said its international and domestic unit revenues are currently running ahead of expectations.

4. It pays shareholders a passive income

Qantas resumed its twice-yearly payment dividends to shareholders in April 2025. The airline previously paused its dividend payments in 2019 when the Covid-19 pandemic forced the airline to halt payouts and conserve cash. Qantas most recently paid its shareholders a 19.8 cents per share interim dividend, fully franked, in March. The business is forecast to pay an annual dividend per share of 39.6 cents per share. At the time of writing, that translates into a forecast grossed-up dividend yield of around 4.3%, including franking credits.

5. Analysts tip a strong upside ahead

TradingView data shows that the majority of analysts (13 out of 14) have a buy or strong buy rating on Qantas shares. They tip a 20% upside to an average $11.01 target price, or a 40% upside to a maximum $12.80 target price.

The post 5 reasons to buy Qantas shares today appeared first on The Motley Fool Australia.

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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.

Australia needs sovereign AI infrastructure. The federal government has made that clear.

And in March 2026, the government has put its money where its mouth is.

Macquarie Technology Group Ltd (ASX: MAQ) secured a $200 million hybrid investment from the National Reconstruction Fund Corporation. This is the largest single technology sector investment the NRF has made to date.

The funding will help ensure that critical digital infrastructure and information, including the data of everyday Australians, remains securely onshore.

This is a bet by Australia’s sovereign investment fund on the most important digital infrastructure company many Australian investors have never heard of.

What Macquarie Technology actually does

Macquarie Technology is not a household name, but its customers are.

The company provides sovereign cloud, cybersecurity, data centre, and telecommunications services to Australian businesses, critical infrastructure operators, and government agencies.

Its data centre in Canberra is home to some of Australia’s most sensitive government data. The company’s cloud platform hosts critical workloads for departments that cannot risk their information residing on offshore servers.

Unlike many speculative AI stocks, Macquarie Technology already generates meaningful earnings and has very visible demand drivers.

The company has now delivered 20 consecutive half-years of operating income growth, an impressive track record in any market environment.

The $200 million investment and what it funds

The NRF investment is structured as a hybrid note, part debt and part equity, making it the first of its kind from the NRF.

Management plans to draw down the first $100 million by this month and the second tranche by March 2027.

The capital will fund the expansion of Macquarie Technology’s IC3 Super West data centre in Sydney. This facility is designed specifically for AI infrastructure workloads requiring the highest levels of security and sovereignty.

The investment will create 140 high-skilled jobs in cybersecurity, AI and software engineering.

CEO David Tudehope said at the time of the announcement:

This investment will accelerate our ability to provide the most secure, sovereign AI infrastructure in Australia, allowing our customers to harness the rapid growth of AI while ensuring their critical data never leaves Australian shores.

The broker view on MAQ shares

The broker community responded positively to the NRF investment.

Canaccord Genuity upgraded MAQ shares following the announcement, with an upgraded price target predicting significant upside from current levels.

The broker noted the NRF investment validates Macquarie Technology’s unique position in the Australian market and dramatically improves its capacity to fund growth without relying on traditional equity raisings.

The ASX AI share has now delivered 20 consecutive half-years of operating income growth. This metric has given Canaccord confidence the momentum will continue as the IC3 Super West expansion comes online.

The risks worth knowing

Macquarie Technology is not the most liquid stock on the ASX, with a market capitalisation of approximately $1.96 billion placing it firmly in mid-cap territory.

That means institutional buying can move the price significantly in either direction.

The company operates in a competitive market for cloud and data centre services, even if the sovereign angle provides some insulation from hyperscale competition.

Furthermore, the government contract market can be lumpy, with large tenders taking time to convert to revenue.

Foolish takeaway

Goodman Group (ASX: GMG) and NextDC Ltd (ASX: NXT) attract most of the data centre headlines on the ASX.

But Macquarie Technology is quietly something different and arguably more defensible: the sovereign AI infrastructure layer that Australian government agencies and critical industries cannot outsource offshore.

The NRF investment provides $200 million of growth capital at favourable terms, 20 consecutive half-years of earnings growth provide the track record, and Canaccord’s upgraded price target provides the broker conviction.

For investors who have not yet discovered Macquarie Technology shares, now may be the time to look more closely.

The post Why Macquarie Technology is one of the most interesting AI infrastructure plays on the ASX appeared first on The Motley Fool Australia.

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Motley Fool contributor Mark Verhoeven 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 Goodman Group. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

PLS Group Ltd (ASX: PLS) shares have been on fire over the past year.

In afternoon trade on Tuesday, shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock– formerly known as Pilbara Minerals – were trading for $6.54 each.

While shares lost ground on Tuesday, that sees the PLS share price up a blistering 473.3% over the past 12 months, smashing the 3.4% one-year gains posted by the benchmark index.

To put this performance in some perspective, if you’d bought $10,000 worth of the ASX lithium stock on 2 June 2025, you’d be sitting on $57,325 today.

Atop its own operational successes above and below the ground, the Aussie miner has enjoyed strong tailwinds from the ongoing global resurgence in lithium demand.

With only limited new supplies coming into play over the past year, this has sent spodumene (a lithium bearing ore) prices up around 196% in 12 months.

Which brings us back to our headline question.

With the stock having surged so much in the past year…

Should I buy PLS shares now?

Catapult Wealth’s Dylan Evans recently analysed the growth outlook for the Aussie lithium miner (courtesy of The Bull).

“PLS is an Australian lithium producer, with its primary operation in Western Australia,” he noted.

Commenting on the company’s recent performance, Evans said:

PLS has a solid balance sheet. Revenue of $624 million in the first half of 2026 was up 47% on the prior corresponding period. Driving growth is a combination of increasing demand for lithium and near-term supply constraints.

As for that solid balance sheet, as at 31 March PLS reported a cash balance of $1.45 billion. That was up 52% from 31 December.

Connecting the dots, Evans issued a hold recommendation on PLS shares following their huge run higher.

He concluded:

Demand is fuelled by growing battery and electric vehicle adoption, which has been boosted by the conflict in Iran and crude oil disruptions. The strong balance sheet and free cash flow should enable PLS to fund its expansion plans.

What’s the latest from the ASX 200 lithium stock?

PLS released its third quarter update on 24 April.

Highlights for the three months included an impressive 52% quarter on quarter increase in revenue to $567 million.

That revenue boost was driven by a 61% increase in the average realised spodumene price PLS received over the quarter.

The ASX 200 lithium miner also increased its quarterly spodumene production by 12% to 232,400 tonnes, and it sold 195,700 tonnes over the three months.

PLS shares closed up 1.6% on the day of the results release.

The post Up 473% in a year, should I buy PLS shares today? appeared first on The Motley Fool Australia.

More reading

• How ASX 200 lithium stocks like Liontown, Mineral Resources and PLS shares again beat the benchmark in May
• Which ASX lithium shares to buy as the market recovers: 2 brokers weigh in
• Buy, hold, sell: 3 very popular ASX mining stocks
• Top 10 ASX shares bought and sold by investors in May
• Buy, hold, sell: BHP, PLS Group, CBA shares

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.