Author: openjargon

Thematic investing is on the rise amongst ASX ETF investors. 

ETF providers are consistently coming up with newly designed funds to track niche areas of the market. 

For examples of this, look no further than the recently listed Betashares Space Industry ETF (ASX: RCKT). 

After listing in mid-May, the fund has already rocketed (excuse the pun) 13%. 

However it wasn’t the only thematic fund to perform well during May. 

Why target thematic ASX ETFs?

Thematic ASX ETFs can offer investors a simple way to back powerful long-term trends. 

Popular themes include artificial intelligence and cybersecurity to clean energy and biotech.

Rather than picking individual winners, investors gain exposure to a basket of companies positioned to benefit from a particular theme. 

This can help diversify and spread risk while capturing broad industry growth. 

These funds can also provide valuable insight into market sentiment, as strong inflows often signal growing investor confidence in a sector or economic trend. 

However, thematic investing is not without risks. 

Popular themes can become crowded, valuations may become detached from fundamentals, and trends that appear transformative today may fail to deliver the expected returns. 

With that in mind, here were three of the top performing funds during May. 

Global X Cybersecurity ETF (ASX: BUGG)

This ASX ETF was a market winner during the month of May. 

In the last four weeks, it has risen an astonishing 42%. 

The fund seeks to invest in companies that stand to benefit from the increased adoption of cybersecurity technology, particularly those whose principal business is in the development and management of security protocols preventing intrusion and attacks on systems, networks, applications, computers, and mobile devices.

At the time of writing, it is made up of roughly 28 holdings, with the majority based in the US. 

Global X China Tech ETF (ASX: DRGN)

Another high performing ASX ETF during May was the China focussed fund from Global X. 

It has risen more than 13% over the last 4 weeks, driven by semiconductor and AI tailwinds. 

The fund offers access to 20 leading Chinese technology companies listed in Hong Kong and Mainland. With a rules-based selection process across 15 core sectors including semiconductors, robotics, software, and internet platforms, DRGN captures China’s strategic push into self-sufficient innovation.

Global X Semiconductor ETF (ASX: SEMI)

It has been a similar story for this Semiconductor focussed ASX ETF. 

It has risen by more than 25% in the last month. 

The fund seeks to invest in companies that stand to potentially benefit from the broader adoption of tech-enabled devices that require semiconductors. This includes the development and manufacturing of semiconductors.

The post What are the best performing thematic ASX ETFs right now? appeared first on The Motley Fool Australia.

More reading

• This ASX ETF has soared because of the upcoming SpaceX IPO
• The growing case for this semiconductor ASX ETF
• SpaceX IPO buzz grows as ASX investors eye global tech giants
• Best 3 ASX ETFs to leverage massive artificial intelligence buildout
• Here are 3 ASX ETFs for smart investors to buy

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.

The Fair Work Commission handed down its 2026 Annual Wage Review decision yesterday, and it came in above most forecasts.

Australia’s 2.8 million lower-paid workers will receive a 4.75% pay rise from 1 July 2026, lifting the national minimum wage to A$1,004.90 per week, or A$26.44 per hour.

That is the first time the weekly minimum wage has crossed $1,000 in Australian history.

The increase was higher than last year’s 3.5% rise and 3.75% rise in 2024, but lower than the 5% to 6% increase sought by trade unions.

For ASX consumer stocks, the decision creates tension.

Higher wages for workers mean higher spending power for consumers. But they also mean higher labour costs for the large employers who dominate the retail sector.

Here is how the three biggest consumer names on the ASX are likely to navigate that tension.

Woolworths Group Ltd (ASX: WOW)

Woolworths employs more than 100,000 team members across Australia, the vast majority of whom are covered by enterprise agreements or modern award rates.

A 4.75% increase in award wages flows directly into Woolworths’ cost base. This already came under pressure in FY2026 as the company invested heavily in price competitiveness to win back market share.

The positive offset is that Woolworths’ customers are also among the workers receiving the wage increase.

Every dollar added to the weekly pay packet of a lower-income Australian household tends to flow quickly into grocery spending, which is exactly the category Woolworths dominates.

Woolworths CEO Amanda Bardwell has previously flagged that the company is navigating a “more cautious consumer” heading into the second half of FY2026.

A wage increase that puts more money in the pockets of the lowest-income households could be precisely the stimulus that reverses that caution for grocery spending, even if it simultaneously pressures the supermarket’s own wages bill.

Additionally, Westpac flagged today that the 4.75% increase was bigger than their expected 4.25% rise and implied some upside risk to wage growth. The bank flagged that there is risk inflation expectations remain elevated for longer, making the RBA’s job harder.

RBA risk cuts negatively for Woolworths, as further rate hikes would squeeze mortgage-holding households and reduce discretionary spending.

Wesfarmers Ltd (ASX: WES)

Wesfarmers faces the wage increase across a far more diverse set of businesses than Woolworths.

Bunnings, Kmart, Officeworks, and Target each employ significant numbers of award-covered workers, meaning the 4.75% increase flows through a wide cost base.

However, Wesfarmers has a meaningful advantage over most of its retail peers: pricing power.

In the first half of FY2026, Wesfarmers delivered NPAT of $1,603 million, up 9.3% year-on-year, with Bunnings and Kmart both delivering strong earnings growth despite a tough consumer environment.

That track record suggests Wesfarmers has the pricing discipline and operational efficiency to absorb a meaningful cost increase without sacrificing profitability.

Kmart in particular, with its low-price value proposition, stands to benefit if lower-income households use their wage increase to trade up from pure discount retailers while remaining value-conscious.

Morgans recently upgraded Wesfarmers to accumulate with an $81.10 price target. The broker cited the quality of the business and improving valuation after a 9% pullback over the past twelve months.

The wage increase is unlikely to change that broadly positive view on the stock’s medium-term trajectory.

JB Hi-Fi Ltd (ASX: JBH)

JB Hi-Fi occupies the most interesting position of the three in the context of a minimum wage increase.

The consumer electronics retailer draws its customers disproportionately from households in the middle-income bracket, not the very lowest incomes most directly affected by a minimum wage increase.

That means the direct spending boost from today’s decision is likely smaller for JB Hi-Fi than for Woolworths or Kmart.

However, there are tangible indirect benefits. A rising wage floor supports broader household income growth across the economy. This tends to increase consumer confidence and discretionary spending over time.

JB Hi-Fi delivered a strong first half of FY2026 with gross sales rising 13.2%, as the company benefited from strong demand for consumer electronics and the ongoing rollout of AI-capable devices.

For JB Hi-Fi, the wage increase is a secondary factor compared to the trajectory of interest rates and consumer confidence.

If the 4.75% increase adds to RBA concerns about inflation and increases the probability of another rate hike, that would be net negative for JB Hi-Fi’s customer base.

The inflationary risk

Today’s announcement carries a broader risk.

The Fair Work Commission noted it would not be practicable or responsible to award an increase sufficient to fully close the real wage gap that has opened since July 2021. This would have required a rise of more than 5%.

Nevertheless, a 4.75% increase on top of three consecutive RBA rate hikes creates a risk of a wage-price spiral if businesses pass through the cost increase in the form of higher consumer prices.

That is the scenario the RBA most fears, and it is the kind of development that could tip the June hold into an August hike.

Markets are currently pricing in a 7% chance of a fourth rate hike at the June meeting, but that probability could shift if this week’s wage decision is interpreted as adding to inflationary pressure.

Foolish takeaway

A minimum wage increase is not inherently good or bad for ASX consumer stocks.

For Woolworths it is both a cost headwind and a demand stimulus.

With Wesfarmers, it is a cost to manage but one its operational strength can absorb.

For JB Hi-Fi it is largely a sideshow to the interest rate story.

For all three, the more important variable in the months ahead remains what the RBA does next with rates, and whether today’s wage decision gives the board reason to keep the hiking cycle going.

The post Australia’s minimum wage just rose 4.75%. Here is what it means for ASX consumer stocks appeared first on The Motley Fool Australia.

More reading

• Are Woolworths shares a good buy for passive income?
• Why’s the ASX 200 falling today despite another tech rally?
• My 3 best ASX 200 blue-chip shares to buy in June
• Wesfarmers shares: Buy, hold or sell?
• Why Evolution Mining, JB Hi-Fi, Scentre Group, and TPG Telecom shares are falling 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 Wesfarmers. The Motley Fool Australia has positions in and has recommended Woolworths Group. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

4DMedical (ASX: 4DX) shares have been hotly covered over the past year. 

4DMedical is a medical technology company working in the field of respiratory imaging and ventilation analysis. It operates in the treatment of lung and respiratory diseases.

The company’s non-invasive lung imaging technology emanates from research work undertaken at Monash University. 

The medical technology company rocketed more than 2,000% higher between April 2025 and April 2026. 

However since reaching almost $7 per share, it has since fallen significantly and closed yesterday at $3.85. 

A new report from Bell Potter indicates that it could be set to rebound close to these record highs. This comes after the company announced its plans for a post approval study. 

What did the company announce?

4D Medical announced the launch of the CLEAR clinical study. The study is a major research program designed to demonstrate that its FDA-approved CT:VQ lung imaging technology can be used in patients with suspected pulmonary embolism (blood clots in the lungs).

The company will compare its CT:VQ scan directly against the current standard test. The current test requires patients to receive an injected contrast dye. 

CT:VQ uses routine CT scans and software to assess airflow and blood flow in the lungs without the need for contrast dye.

CT:VQ already received FDA clearance in 2025. However that approval was based primarily on patients undergoing traditional nuclear medicine ventilation-perfusion scans. 

The new CLEAR study is intended to generate evidence in the much larger population of patients.

4D Medical believes this is a significant commercial opportunity because around five million CTPA scans are performed each year in the United States for suspected pulmonary embolism, while only a small percentage of those scans ultimately confirm the disease. 

If the CLEAR study shows CT:VQ can deliver comparable clinical outcomes, it could encourage hospitals and physicians to adopt CT:VQ more broadly as a contrast-free alternative.

In practical terms, 4D Medical is not seeking another FDA approval. Instead, it is conducting the CLEAR study to build the clinical evidence needed to drive adoption of CT:VQ in emergency and acute-care settings, potentially expanding its addressable U.S. market to around US$3 billion annually.

What is Bell Potter saying about 4DMedical shares?

The team at Bell Potter has increased its share price target to $6.00 (previously $4.50). This is largely due to optimism surrounding the CLEAR study. 

The broker retained its speculative buy recommendation on 4DMedical shares. 

Bell Potter said The CLEAR study is essential to accelerate adoption of CTVQ in front line emergency departments and for inpatient use.

4D Medical is not required to seek further FDA approval or a label expansion to the current 510K approval, however, the clinical data from the CLEAR study will provide the necessary evidence to further support broad adoption for diagnosis of PE. Outpatient reimbursement will continue under the existing category III CPTA codes paid at US$650/scan.

The new share price target indicates an upside potential of approximately 56% from current levels. 

The post Why 4DMedical shares can return to record highs: Expert appeared first on The Motley Fool Australia.

More reading

• Why are 4DMedical shares charging higher today?
• Top 10 ASX shares bought and sold by investors in May
• Why 4DMedical, IperionX, Pro Medicus, and Ventia shaares are storming higher today
• This ASX healthcare rocket is up 14% in a week. Here’s why investors are still buying
• 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.

A $20,000 investment has the potential to become a much larger amount over time.

I think the key is approaching it the right way. Trying to turn $20,000 into $100,000 quickly can push investors towards risky choices, overhyped and speculative stocks, or businesses they do not really understand.

I would rather think about the question through the lens of compounding.

The target is a fivefold return. That sounds ambitious, but it does not require a miracle if the investor has enough time and owns the right types of assets.

What to target

If an investor achieved an average annual return of 9%, a $20,000 investment could grow to $100,000 in roughly 19 years.

That return is not guaranteed. Some years could be excellent, some flat, and some negative. But I think a 9% annual return is a useful long-term assumption for understanding how wealth can be built through ASX shares.

What stands out to me is that the investor does not need to find a stock that rises fivefold next year.

They need a sensible return, repeated over a long period.

That is the part of investing that often gets overlooked. Wealth is not only built by spotting one spectacular winner. It can also come from owning quality businesses, reinvesting returns, and giving the market enough time to work.

What I’d buy

If I were trying to turn $20,000 into $100,000, I would focus on quality and growth.

That could include a broad ASX exchange-traded fund (ETF) for simple market exposure, such as the Vanguard Australian Shares Index ETF (ASX: VAS) or the iShares S&P 500 AUD ETF (ASX: IVV). This would give investors exposure to a wide range of Australian and US stocks in one investment.

But I would also want exposure to individual businesses that could grow earnings at a good rate over time.

For example, REA Group Ltd (ASX: REA) has one of the strongest digital platforms in Australia through realestate.com.au. Its market position offers several avenues for growth through premium listings, data, agent tools, property insights, and finance leads.

Macquarie Group Ltd (ASX: MQG) is another type of long-term compounder I like. It has exposure to asset management, infrastructure, commodities, private capital, and global markets. Its earnings can move around, but its ability to adapt has been a major strength over time.

I would also look at businesses with strong brands and global opportunities. Breville Group Ltd (ASX: BRG) is a good example. It has built a premium appliance brand with growth potential across coffee and kitchen products, as well as international markets.

Patience is the hard part

The biggest challenge is not the calculation. It is staying invested.

A 19-year journey will almost certainly include market sell-offs, recessions, disappointing company updates, and periods where investors feel like nothing is happening.

That is normal. The danger is giving up too early, selling quality shares during weak periods, or constantly jumping between ideas in search of faster returns.

If the investment case remains intact, I think time can be a powerful advantage.

Foolish Takeaway

Turning $20,000 into $100,000 with ASX shares is possible, but I think investors need the right mindset.

The goal is not to force a quick fivefold return. It is to own assets that can compound steadily and give them enough time to grow.

A 9% annual return could get the job done in roughly 19 years. That may not sound exciting at first, but I think that is the point. Successful investing often looks ordinary in the early years before the results become impressive later on.

The post Can you turn $20,000 into $100,000 with ASX shares? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• How to get wealthy investing $300 a month into ASX shares
• 2 ASX 200 shares I think could beat the market over 10 years
• Top 10 ASX shares bought and sold by investors in May
• Are ASX 200 bank shares a buy in June?

Motley Fool contributor Grace Alvino has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The big four banks are popular options for many Australian investors. But are Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB) shares worth buying this week?

To find out, let’s take a look at what analysts are saying about these two big four bank shares courtesy of The Bull. Here’s what you need to know about them:

CBA shares

Red Leaf Securities has named Australia’s largest bank as a hold this week.

It highlights that CBA is the highest quality franchise in Australian banking and has resilient earnings.

However, with its growth moderating and mortgage competition intensifying, Red Leaf Securities has concerns. This is especially the case given the significant premium that CBA shares trade on compared to both local and international peers.

Commenting on its hold rating, Red Leaf Securities said:

CBA remains the highest quality franchise in Australian banking, supported by its dominant deposit base, strong digital ecosystem and industry leading profitability. Earnings remain resilient, but growth is moderating as mortgage competition intensifies and credit expansion normalises.

Credit quality is stable and dividends remain highly reliable, reinforcing its defensive appeal. However, the key issue is valuation, with the stock trading at a significant premium to domestic and global peers. Much of the quality and stability is already priced in, leaving limited upside without a material macro or earnings surprise to the upside.

NAB shares

The team at Catapult Wealth isn’t feeling upbeat on the investment opportunity with NAB shares.

With NAB recently delivering a disappointing half-year result for FY 2026 and Federal Budget policies potentially weighing on loan and property price growth, Catapult Wealth thinks that NAB could struggle to deliver on the market’s expectations in the near term.

As a result, the financial services company has named NAB as a sell this week.

Commenting on the big four bank, Catapult Wealth said:

The bank’s first half result in fiscal year 2026 was underwhelming, in our view. Investment loans account for about a third of residential lending. Proposed changes to negative gearing and capital gains tax are likely to reduce loan and property price growth, in our view. Given higher interest rates and affordability pressures, NAB may struggle to deliver the growth needed to support current expectations.

The post Should you buy CBA and NAB shares this week? appeared first on The Motley Fool Australia.

More reading

• Brokers rate these 5 ASX 200 shares as a sell!
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• Top 10 ASX shares bought and sold by investors in May

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 S&P/ASX 200 Index (ASX: XJO) endured another lacklustre session this Tuesday. After starting the week on a negative note yesterday, investors didn’t exactly come back to the markets with a renewed sense of optimism today.

The ASX 200 spent the entire session in red territory, and ended up closing with a 0.057% loss. That drags the index down to 8,724.4 points.

This rather uninspiring Tuesday session for the local markets comes after a more positive start to the American trading week up on the US markets last night.

The Dow Jones Industrial Average Index (DJX: .DJI) had a wild ride, but managed to pull off a win, gaining 0.091%.

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) was a little more decisive, rising 0.42%.

But let’s return to the ASX boards now and take stock of what the different ASX sectors were up to amid today’s challenging trading conditions.

Winners and losers

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

More reading

• Which tech share is the ‘most defensively positioned software business’ on the ASX?
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• WiseTech, Cochlear, CSL shares: Can these beaten down stocks rebound in 2026?
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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, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Life360, WiseTech Global, and Xero. The Motley Fool Australia has recommended CAR Group Ltd, Pro Medicus, and Srg Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Woolworths Group Ltd (ASX: WOW) shares have slumped lower in Tuesday afternoon trade. At the time of writing, the supermarket giant’s shares are down around 2% to $34.30 a piece.

It’s been a rocky road for Woolworths shares this year, with its value swinging anywhere between $28.84 and a multi-year high of $38.15. After today’s decline, the shares are now around 17% higher year to date and 7% higher than 12 months ago.

A key catalyst was the company’s third-quarter sales update in early May. For the 13 weeks to the 5th of April, Woolworths reported total sales of $18.1 billion, up 4.5% from Q3 in FY25. Its Australian Food sales were up 5.9% year on year to $13.8 billion. 

The company said that underlying trading momentum remained solid, but management noted they have seen “some signs of increased customer caution”.

Investors were spooked and quickly offloaded their shares.

Analysts are mostly neutral on the outlook for Woolworths shares. 

TradingView data shows that 11 of 18 analysts have a hold rating on Woolworths shares, another 6 have a buy or strong buy rating, and 1 has a sell rating.

The average target price is $34.94, which implies a 2% upside at the time of writing.

But some more bullish analysts think there is still potential for the supermarket’s shares to return to the multi-year highs seen earlier this year. The $39 maximum target price implies a potential 14% upside over the next 12 months, at the time of writing.

While the outlook for Woolworths shares may seem unclear, there are reasons investors should consider adding them to their portfolios.

Are Woolworths shares a good buy for passive income?

Supermarkets are inherently defensive stocks. Even if confidence and customer sentiment fall, inflation keeps rising, and purse strings get even tighter, Australians still need to buy groceries. 

The main benefit of Woolworths is its scale. This gives the company strong buying power, an extensive supply chain, and the ability to invest in efficiency over time.

Combined with its defensive nature, Woolworths can generate a relatively stable cash flow regardless of economic conditions. And this means it can continue to pay its shareholders.

How much passive income does the supermarket giant pay its shareholders?

Woolworths typically pays its investors twice-yearly dividends: an interim dividend in April and a final dividend in October.

Woolworths’ latest dividend payment in April was 45 cents per security, fully franked.

CommSec’s consensus estimates suggest Woolworths could pay a total dividend per share of 99.5 cents in FY26. Based on the current share price of $34.30, that would yield around 2.9%.

The supermarket giant is then forecast to pay shareholders $1.13 in FY27, and $1.28 in FY28.

The post Are Woolworths shares a good buy for passive income? appeared first on The Motley Fool Australia.

More reading

• Why’s the ASX 200 falling today despite another tech rally?
• Here’s how Coles and Woolworths shares stacked up in May
• 6 ASX 200 shares just upgraded by the experts
• 2 ASX dividend shares I’d buy for reliable passive income
• 3 reasons to buy Woolworths shares at $34

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

Fears over how artificial intelligence (AI) may impact software businesses contributed to a 48% rout for ASX tech shares between 29 August last year and 30 March this year.

James Gerrish from Shaw and Partners reckons software stocks have now bottomed, and several are well-placed for a rebound in 1H FY27.

In a newsletter, Gerrish told investors his Market Matters team was buying one particular stock today for their Active Growth Portfolio.

Which ASX tech share?

Following a 30% share price decline over 12 months, Gerrish and his team are buying Pro Medicus Ltd (ASX: PME) shares.

Pro Medicus designs and distributes medical imaging software and services to healthcare providers around the world.

Now, a technical note.

Pro Medicus is actually classified as an ASX healthcare share.

But its business is all about high tech.

That’s why it’s among the top 10 stocks in the S&P/ASX All Technology Index (ASX: XTX), the benchmark for Australian technology companies.

400% share price rise

Pro Medicus became an ASX darling between 2023 and 2025 when its share price rocketed 400% on the back of many contract wins.

The Pro Medicus share price reached a record $336 per share on 17 July 2025.

Then came the correction, which sent the tech company tumbling to a two-year low of $107.75 on 24 February.

Today, Pro Medicus shares are trading at $157.46, up 9% on yesterday’s close of $144.46.

Today’s surge follows a new contract win announced yesterday.

For 1H FY26, Pro Medicus reported a 28% lift in revenue and a 30% increase in underlying net profit after tax (NPAT).

Gerrish said Pro Medicus had continued to execute exceptionally well while the share price reset itself.

Importantly, the recent pullback has been driven far more by multiple compression than any deterioration in the company’s fundamentals.

In our view, PME remains the highest-quality and arguably most defensively positioned software business on the ASX.

How is Pro Medicus ‘defensively positioned’ against AI?

For starters, the company’s Visage 7 medical imaging platform is already deeply embedded across leading US hospital networks.

Gerrish said:

This is not discretionary software that can be easily switched off or replaced.

PME continues to maintain an exceptional customer retention record, while also winning major contracts against much larger competitors — a strong endorsement of the quality of its technology and the value it delivers to customers.

While AI disruption is a legitimate concern for investors in ASX tech shares, Gerrish reckons Pro Medicus will benefit from AI.

… we think Pro Medicus is one of the few names where AI is more likely to enhance the moat than erode it.

Rather than replacing Visage, AI can make the platform more valuable by improving radiology workflows, accelerating image analysis, supporting detection tools and automating parts of the reporting process.

Management has been actively embedding AI capabilities into Visage, including advanced breast cancer screening applications and its RadPath Hub, which integrates radiology and pathology data to support more sophisticated clinical decision-making.

ASX tech shares rebounding

The ASX tech sector turned a corner on 31 March after a 48% decline over seven months.

Since then, Pro Medicus shares have risen 38%, outperforming the S&P/ASX 200 Information Technology Index (ASX: XIJ), up 29%.

Gerrish says Pro Medicus shares look “exceptionally well placed” in a market beginning to rotate back to quality software providers.

Investors often pay up for genuine scarcity, and PME offers exactly that: world-class technology, recurring revenue, strong margins, global growth potential and a product that is becoming more important, not less, as healthcare systems digitise.

The expert acknowledges that Pro Medicus shares still trade on a premium multiple, so valuation and execution remain risks.

PME still trades on a premium multiple, leaving less room for disappointment, while US hospital budget cycles and the timing of large contract wins can create volatility.

However, with only a modest share of the US imaging market, a mission-critical product, a long runway for new contract wins and clear leverage to AI-enabled healthcare digitisation, we think Pro Medicus remains one of the best-positioned structural growth stories on the ASX.

The post Which tech share is the ‘most defensively positioned software business’ on the ASX? appeared first on The Motley Fool Australia.

More reading

• Why DroneShield, Pro Medicus, SRG Global, and Woodside shares are charging higher today
• Is June set to be the month of the ASX healthcare rebound?
• Here are the top 10 ASX 200 shares today
• Why 4DMedical, IperionX, Pro Medicus, and Ventia shaares are storming higher today
• Why are Pro Medicus shares rocketing 12% today?

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 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.

Zip Co Ltd (ASX: ZIP) shares have fallen into the red again on Tuesday.

After a brief rebound, Zip shares have now fallen around 3% at the time of writing to $2.36 each. 

Zip shares have been volatile ever since the stock was caught up in an ongoing sector-wide tech sell-off. Technology and growth shares have also come under renewed pressure again recently as investors reassess valuations and risk appetite. The ASX 200 tech shares continued softening through May as investor sentiment struggled to rebound.

As for today’s share price decline. It looks likely that investors are taking their gains off the table after Zip shares rallied around 10% to a two-week high yesterday. 

At the time of writing, the buy now, pay later (BNPL) provider’s shares are down 29% year to date but are still around 22% higher than this time last year. 

For context, the S&P/ASX 200 Index (ASX: XJO) is around 0.4% lower on Tuesday afternoon, and just over 3% higher over the year.

Zip shares might be struggling to regain momentum, but I still think there are compelling reasons for investors to buy the stock. Here are three of them.

1. Zip’s financial results have been positive

Zip’s financial results have been robust over the past few quarters. Its latest third-quarter FY26 results announcement in mid-April showed that growth has started to accelerate.

Zip reported a 22.4% year-on-year increase in its total translation volume (TTV). The company also confirmed a 20.2% increase in total income, a higher operating margin of 19.4%, and confirmed it has grown its active customer base by another 3.5%.

The fintech business also upgraded its FY26 group cash EBTDA guidance to at least $260 million, from previous guidance of around $248.6 million.

2. The company is aggressively expanding

Aside from financial growth, Zip is also rapidly expanding its product range and aggressively expanding its global presence, especially in the US. 

Late last year, the company announced that its US segment was expanding its partnership with the programmable financial services business Stripe, a move that caused some investor panic at the time. 

In early February, the company confirmed it is expanding its US presence by launching a new Pay in 2 product. The new product allows consumers to split a purchase into two instalments paid over two weeks.

Zip is also pursuing a dual sharemarket listing on the Nasdaq in the US. This could help drive an even opportunity for business expansion in the area.

3. Brokers tip a huge upside ahead for Zip shares

TradingView data shows that analysts are very bullish on Zip’s outlook over the next 12 months.

All 12 analysts have a buy consensus on the shares, and the average $3.82 target price implies a potential 62% upside.

Some are even more optimistic and tip the shares to increase up to 129% to $5.40 a piece, at the time of writing.

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

More reading

• Here are the top 10 ASX 200 shares today
• Here are the 10 most shorted ASX shares
• 4 ASX 200 shares I’d buy with $5,000 in June
• 3 key reasons to buy Zip Co shares now
• 3 quality ASX stocks I’d buy under $5 a share

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.

Shares in Peter Warren Automotive Holdings Ltd (ASX: PWR) are trading not far off their 12-month lows at the moment, which the analyst team at Jarden says offers an opportunity to buy in.

Small-cap ASX shares looking cheap

The Jarden team has significantly reduced its share price target on the company, from $2.50 to $1.55, but this is still well above the current share price of 76 cents.

This follows Peter Warren earlier this week issuing a downbeat trading update.

The company said:

Following a significant deterioration in trading conditions over recent weeks, and with the outlook for May and June – which typically represent a large proportion of the Company’s annual result – subdued, Peter Warren expects underlying profit before tax (PBT) for FY26 to be in the range of $12m to $15m. This substantial reduction, following a solid first half growth, predominantly reflects intense pressure on new car trading margins.

This was caused by a rapid shift in customer demand, the dealership said, with “new car buyers … favouring smaller, more fuel-efficient vehicles and fewer high margin vehicles often purchased with accessories”.

There were also more new brands competing for market share, and the high demand for some models had led to a backlog of orders, the company said.

Worst not yet over for small cap ASX share

The Jarden research note on Peter Warren said there could be more pain to come.

As the analyst team said:

Feedback continues to suggest that, at a headline level, new car demand has remained relatively resilient (obviously mix has changed under the surface). However, with broad expectations of house price declines to come, we note new car sales historically have not performed well in this environment. The 2017-2019 cycle of national house price declines of over -8% coincided with new car sales declining of -11% over the same period (peak to trough annual). Combined with a shift away from higher priced, higher margin ICE vehicles and a more promotional price environment (and more finance promotions), we have taken a conservative stance on FY27 earnings.

The Jarden team noted that Peter Warren owns land and buildings worth more than the company’s entire market capitalisation.

They added that they believed that the company’s particular brand mix had played a significant part in the profit downgrade.

They added more broadly on the sector:

Commentary points to several broader potential headwinds worth watching for the industry, including new vehicle competition and associated gross margin compression (particularly in the ICE side of the market), OEM finance promotional activity, and continued shortages of supply of in-demand NEV (new energy vehicle) models.

Peter Warren is valued at $129.2 million.

The post Looking for a 100% gain? One broker says try this small-cap ASX car dealer appeared first on The Motley Fool Australia.

More reading

• Are Woolworths shares a good buy for passive income?
• Which tech share is the ‘most defensively positioned software business’ on the ASX?
• 3 reasons to buy Zip shares today
• Why’s the ASX 200 falling today despite another tech rally?
• Brokers rate these 5 ASX 200 shares as a sell!

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.