Author: openjargon

Santos Ltd (ASX: STO) shares are edging lower today.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $8.31. In morning trade on Thursday, shares are changing hands for $8.29 apiece, down 0.2%.

For some context, the ASX 200 is just about flat at this same time, while the S&P/ASX 200 Energy Index (ASX: XEJ) is down 1.2%.

Now, here’s what’s happening with Santos’ growth outlook.

Santos shares in focus amid major project progress

In news that could support Santos shares over the longer-term, the company announced a “significant milestone” at its Pikka oil project, located on Alaska’s North Slope.

Pikka is one of Santos’ two major growth projects that could help the ASX 200 oil and gas stock increase its production by up to 30% in the second half of the year (H2 2026) compared to H1.

And Pikka is fast progressing to full production, with Santos reporting the successful commencement of seawater injection at the Nanushuk Drillsite-B (NDB) within the project.

Continuous production at Pikka commenced in June.

The project is now delivering around 40,000 barrels of oil per day (gross). And Santos shares could catch further tailwinds, with management reporting the company plans to bring additional wells online over the coming weeks now that the water injection is also online.

The company said that water export from the seawater treatment plant began on 18 August via a 75-kilometre seawater pipeline that connects the Beaufort Sea to the Pikka project site.

With injection into the reservoir having started on 26 August, Santos said the water injection milestone testing has since been successfully completed. The current water injection was reported to be around 40,000 barrels per day.

Why is Santos injecting seawater?

The company explained:

Seawater injection provides pressure support to the reservoir, a key enabler of the production ramp-up targeting plateau production of approximately 80,000 barrels of oil per day (gross) at the end of the third quarter of 2026.

What did management say?

Commenting on the progress at Pikka that could provide long-term support for Santos shares, managing director and CEO Kevin Gallagher said:

Seawater injection is a critical step in unlocking Pikka’s production capacity. With pressure support now established and wells coming online progressively, we continue to target plateau production rates at the end of the third quarter of 2026.

Pikka is a world-class asset and seawater injection, together with continued efficient drilling and operations, keeps us firmly on track to deliver its full potential.

Santos share price snapshot

With today’s intraday moves factored in, shares in the ASX 200 energy stock are up 34.8% in 2026, well ahead of the 2.9% year to date gains posted by the benchmark index.

The post Buying Santos shares? Here’s why the company is celebrating this production milestone appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Buy, hold, sell: New Hope, BOQ, Santos shares
• Why is the ASX 200 having its worst day in 3 months?
• Santos versus Woodside shares: Which ASX energy stock outperformed in August?
• 5 things to watch on the ASX 200 on Wednesday

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.

Bond yields just hit their highest points since 2011, with Australia’s 10-year government bond yield reaching roughly 5.19%.

The US 10-year Treasury has climbed to 4.79%, its highest level since October 2023.

When the risk-free rate moves this far, the valuation of the market typically moves with it.

What the bond market is saying

June quarter GDP grew 0.4% and annual growth reached 2.1%, both faster than economists expected.

Meanwhile, trimmed mean inflation remains at 3.6%, comfortably above the Reserve Bank’s target band.

Traders now put a 60% probability on a rate rise at the 29 September meeting, up from 52% before the GDP release.

The three-year bond yield has pushed to 4.82%, which tells you the market expects higher rates to persist.

Why higher yields hurt some ASX shares more than others

The mechanism is simple arithmetic.

A company’s value is its future cash flows discounted back to today. By raising the discount rate, distant cash flows lose more value in today’s terms.

Businesses whose earnings are decades away, or which carry heavy debt, therefore suffer twice.

The result is a wholesale repricing of ASX shares.

Partly as a result of this, the S&P/ASX 200 (ASX:XJO) had its worst day in three months even as the growth data improved.

Transurban is the best example

Transurban Group (ASX: TCL) owns toll roads with concession periods running for decades.

The shares closed at $13.76 on Wednesday, down 1.43%, and now are close to a 52-week low of $13.25.

The distribution yield is 5.01%, which is almost exactly what the 10-year government bond pays.

That’s part of the problem. An investor can now earn a similar income from a government guarantee, without accepting traffic risk or $23 billion of debt.

The offset is that Transurban’s tolls escalate with inflation, so its cash flows grow while a bond coupon does not.

Higher inflation is typically good for the revenue line and typically bad for the discount rate applied to it.

Goodman Group is another exposed ASX share

Goodman Group (ASX: GMG) exhibits the same pressure as Transurban group

The company’s shares trade near $27.50 against a 52-week high of $34.78, on a price-to-earnings ratio of 20.87.

Despite this, the company’s results were strong. FY26 operating profit rose 15.7% to $2,675 million, with operating earnings per security up 10.1% to 129.9 cents.

Data centres now represent roughly $15.4 billion of work in progress, or 78% of the total.

Higher yields raise its cost of capital and lower the value of the assets it builds, which is a direct headwind.

The counterweight for the company is a 6.4 gigawatt power bank across 16 cities and FY27 guidance for 9% earnings growth.

Foolish takeaway

Higher yields are not a reason to abandon long-duration ASX shares.

But they could potentially offer more attractive entry points for long-term investors.

Transurban is closer to fair value than it has been for years, though its yield no longer looks that special beside a government bond.

Goodman still has the better growth story and is priced accordingly.

The mistake would be assuming the market has finished adjusting, because the bond market clearly has not.

The post Australian bond yields are back at 2011 levels. What does this mean for ASX shares? 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 and Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban 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.

ASX copper explorers don’t often move like this, and Kaoko Metals Ltd (ASX: KAO) had one of the great sessions on Wednesday.

The shares closed at $1.85 after gaining 151.7%.

They touched $2.28 during the day.

That is a long way from the 20 cent offer price at which the company raised roughly $6.5 million earlier this year.

As a result of all of this, the company’s market capitalisation now sits near $66 million.

What this ASX copper explorer announced

The news came from the Chalkos Copper-Silver Project in northwestern Namibia.

Two drill holes from the maiden campaign intersected broad zones of visible copper mineralisation.

One returned 60.25 metres of mineralisation, including a stronger 32.36 metre zone within it.

Kaoko describes the ground as sitting in the Damara Belt, which management considers geologically comparable to the Central African copper systems.

The company also holds the Karibib copper, gold and tungsten project in central Namibia, where it has an 85% earn-in.

Both assets were the reason for the float, and both were described as drill-ready at listing.

Here is what was missing from the announcement

However, some key bits of information were left out.

Visible mineralisation is what a geologist can see in the core, not what a laboratory has measured.

No assay results have been reported, and as such nobody yet knows the copper grade.

Those results are expected within four to six weeks.

Until they arrive, the entire 151% remains quite speculative.

The ASX noticed the same thing and issued a price and volume query, the so-called speeding ticket.

The speeding ticket is a routine request, and asks whether the company is aware of anything explaining the move.

Why ASX copper is suddenly interesting

The backdrop around copper helps explain the enthusiasm.

Copper prices rose 3.7% across August while iron ore fell 2%, which is an unusual split for a market as iron ore heavy as ours.

Additionally, BHP Group Ltd (ASX: BHP) specifically credited copper for driving its record FY26 result.

Electrification demand keeps growing while new discoveries have become scarce, which is why exploration success is being rewarded this aggressively.

That is why this ASX copper discovery is drawing this much attention right now.

Investors who missed the move in the large producers have been hunting further down the market for exposure.

What has to happen next

Three things determine whether this can continue for Kaoko Metals.

First, the assays need to confirm commercial grades.

Second, the zones need enough width and continuity.

And finally the company needs to fund the follow-up drilling, which almost certainly means raising capital at some point.

A share price near $1.85 makes that raising far less dilutive than it would have been in July, which is one of the benefits of a move like this.

Foolish takeaway

Buying an ASX copper explorer before its assays is a speculative bet on geology.

The odds are not in the buyer’s favour, because most exploration campaigns disappoint.

A $66 million market capitalisation is not demanding if Chalkos turns out to be a true discovery, but it is far too high if the grades are disappointing.

The post This ASX copper explorer is up 390% since its May IPO. Is it still a buy? appeared first on The Motley Fool Australia.

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• Why is this ASX small cap up 160% to get an ASX ‘speeding ticket’?

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

The Regis Healthcare Ltd (ASX: REG) share price is in focus after the company noted only a 2.55% increase to the industry-wide government funding rate, with inflation and wage pressures running well ahead of this increase.

What did Regis Healthcare report?

• The AN-ACC starting price will rise 2.55% from $295.64 to $303.19 per resident per day from 1 October 2026
• The hotelling supplement will remain at $22.15 per resident per day
• Government has kept the care minute requirements and funding categories unchanged
• Recent cost drivers: 4.75% wage increase for award-based workers; up to 4.4% increase for nurses; 3.8% CPI growth

What else do investors need to know?

Regis Healthcare pointed out that the 2.55% funding uplift lags well behind sector cost growth, driven by higher wages and inflation. The annual wage review and recent Fair Work Commission decisions mean that wages for nurses and care staff are rising significantly faster than aged care government reimbursement.

The company reaffirmed its strategy to manage ongoing margin pressure, noting initiatives such as raising room prices, rolling out Higher Everyday Living Fee (HELF) services, and enhancing both revenue optimisation and operational efficiency.

What’s next for Regis Healthcare?

Regis says it will continue advocating for adequate sector funding to support growing demand for residential aged care. Its ongoing strategy to mitigate rising costs includes service enhancements, pricing adjustments, and operational improvements.

The company remains focused on delivering high-quality care to its 10,000 residents and clients, supported by a 13,000-strong team, while navigating ongoing policy and inflationary challenges.

Regis Healthcare share price snapshot

Over the past 12 months, Regis Healthcare shares have declined 23%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 3% over the same period.

View Original Announcement

The post Regis Healthcare reacts to government funding change appeared first on The Motley Fool Australia.

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• Regis Healthcare reports higher FY26 profits and dividend

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 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. 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.

DroneShield Ltd (ASX: DRO) shares are back near their lowest level in a year after another fall on Wednesday.

The counter-drone stock finished the session down 2.83% at $1.72, taking its 2026 decline to around 44%.

It has been quite a reversal from last year, when DroneShield shares climbed as high as $6.71.

There was some hope of a turnaround in early August when the share price pushed above $2.20, but that bounce didn’t last long. The stock has since drifted lower again and is now only around 5% above its 52-week low of $1.62.

Still, I think the setup is becoming much more interesting at these levels.

Here’s why.

Revenue keeps climbing

The recent half-year result certainly gave investors a few things to worry about.

Underlying EBITDA swung to a $12.4 million loss, while DroneShield reported a statutory net loss of $32.2 million.

But the top line continues to move in the right direction. First-half revenue jumped 74% to $125.8 million, while recurring revenue increased 229% to $11.5 million.

DroneShield also had $240 million of committed FY26 revenue as at 21 August. That covers between around 90% of its full-year revenue guidance of $250 million to $270 million.

There is another $43 million already committed for FY27 and beyond, while the company finished June with $180 million in cash and term deposits and no debt.

More growth ahead?

I also like what the company is doing on the product side.

DroneShield recently launched its new RfAI-3 software engine and flagship RfRecon hardware, which is designed to identify, locate and assess radio-frequency activity.

Bell Potter believes these products can help drive more contract wins, particularly in Europe, and said the top end of FY26 revenue guidance “looks achievable”. The broker kept its ‘buy’ rating after the half-year result, although it trimmed its price target from $2.50 to $2.40.

From yesterday’s closing price, that suggests potential upside of around 40%.

Canaccord Genuity is even more bullish with a $2.60 target, although not every broker agrees for now. Jefferies sits at $1.45 and Ord Minnett at $1.50.

Why I’d be buying

DroneShield is clearly not a low-risk stock. It is still losing money, margins need to improve, and short interest remains very high at 15.5%.

But a lot has also changed in the share price.

At $1.72, investors are paying a very different price to the $6-plus levels seen last year, while revenue, committed orders and the product pipeline continue to grow.

I wouldn’t try to pick the exact bottom. But if I wanted long-term exposure to the counter-drone sector, I’d be comfortable buying a small position around these levels.

The post DroneShield shares have fallen 44% in 2026. Here’s why I’d buy the dip 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 positions in and has recommended DroneShield. 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.

Quantum computing has become one of the most interesting themes to buy into for tech-savvy investors.

The companies behind this trend that are actually building the machines are mostly listed in New York.

Despite this, Australia has world-class research, although none of the company’s monetising this is publicly traded.

For example, Silicon Quantum Computing, Diraq, and Q-CTRL are all private.

That leaves three practical routes for ASX investors to get exposure.

The one ASX quantum computing pure play

Archer Materials Ltd (ASX: AXE) is the closest thing the local market has to a direct exposure.

The company is developing a semiconductor qubit chip and employs just eight people.

It carries a market capitalisation of roughly $55 million and the shares trade at 20 cents, against a 52-week range of 18 cents to 50 cents.

In July, the company announced some significant news.

Archer signed a three-year agreement with IonQ (NASDAQ: IONQ), the Nasdaq-listed quantum hardware business, giving it access to IonQ’s cloud platform, its Forte-class systems and its upcoming Tempo-class machines.

Archer pays US$250,000 on signing and US$250,000 every six months, for US$1.5 million across the initial term.

The two companies will also study the feasibility of deploying an IonQ quantum computer inside Australia.

The agreement was funded alongside a $7 million placement and a $3 million share purchase plan.

Chief executive Dr Simon Ruffell was very bullish on the news:

Quantum compute power is no longer a horizon technology, but a strategically critical utility ready for commercial deployment.

The ETF route

The simplest option came to the ASX last month.

VanEck listed Australia’s first quantum computing ETF on 6 August, the Vaneck Quantum ETF (ASX: QNTM).

The fund tracks the MarketVector Quantum Computing Ecosystem Index and charges 0.65% a year.

The index targets businesses building quantum hardware, businesses writing quantum software, and the companies supplying components to both.

For most investors, this is the sensible way to own the theme, because it removes the risk of picking the wrong machine individually.

The infrastructure angle

Quantum computers still need somewhere to be housed.

NextDC Ltd (ASX: NXT) is the obvious beneficiary if any sovereign machine is deployed here.

FY26 net revenue rose 16% to $405.0 million with underlying EBITDA of $248.8 million.

Contracted utilisation more than tripled to 740.1 megawatts against built capacity of 288 megawatts.

FY27 revenue guidance is $615 million to $640 million, though capital expenditure guidance of $5.25 billion to $5.75 billion is enormous against a $10.5 billion market capitalisation.

The risks worth naming

Timelines in this field slip constantly.

Archer has been developing its chip for years and still generates no revenue from it.

The IonQ agreement is an access deal rather than a revenue contract, and the feasibility study may conclude nothing.

Similarly, funds like QNTM diversifies the single-company risk without removing the sector risk, since every holding is priced on a future earnings that are highly volatile.

Foolish takeaway

I would treat quantum computing as a small satellite position rather than a core holding.

The ETF is the route I would choose for most portfolios, because it spreads the bet across an entire ecosystem for 0.65%.

Archer is the speculative stock, at 20 cents with eight employees.

NextDC is the least direct and the most commercially proven of the three.

Owning a theme this early means accepting that the payoff may be a decade away, or may never come at all.

The post How to invest in quantum computing 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 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.

Is this the end of moats?

Okay, that’s a deliberately provocative question… but perhaps not as provocative as it first seems.

But first, let’s define our terms.

Warren Buffett made the idea of an economic ‘moat’ famous: a sustainable competitive advantage that protects a business from competitors and allows it to earn attractive returns over a long period of time.

It might be a strong brand. Scale. High switching costs. Network effects. Intellectual property. Regulation. Or simply being able to do something more cheaply or effectively than everyone else.

Find a company with a wide moat, buy its shares at a reasonable price and – assuming the moat remains intact – time can do much of the hard work for you.

It’s a simple idea. And a very powerful one.

But AI is forcing us to reconsider which moats will continue to be sustainable now that we’re a very different technical world.

Is AI going to destroy them all?

No.

Will it leave them all untouched?

Also no.

—

YouTube LIVE: Tomorrow at 12pm AEST

Well, earnings season has just finished, the economy is growing slowly (but also too quickly!), and rate rises are on the horizon.

There is a lot going on in the world at the moment. And it’s affecting our economy and investments.

I’ll be hosting a LIVE one-hour market update and Q&A on Friday, September 4, 2026 at 12pm AEST to update viewers with my thoughts on all of that and more.

Plus, taking your questions, LIVE, on YouTube in the process.

And… it’s free! Join me, using this link or by clicking on the image below (and if you do it now, you can set a reminder).

See you there!

In reality? Some moats will probably remain largely unaffected. Some will narrow. And some might disappear altogether.

Which ones? And when?

I have no idea. Not with any certainty, anyway.

And nor does anyone else, despite the very confident predictions currently being made about what AI will and won’t do.

But we can (and should!) think in probabilities. We can consider where the risks are highest and ask whether the assumptions we’ve made about individual companies still hold.

I’d start with businesses whose advantage is mostly based on being able to do something others can’t.

Writing software. Producing advertising. Analysing documents. Creating images. Answering customer questions. Turning large amounts of information into something useful.

Until recently, those things required scarce skills, large teams, huge scale, or years of accumulated expertise.

Now? AI is making many of them cheaper, faster and more widely available.

That doesn’t mean software companies, creative businesses or consulting firms suddenly become irrelevant..

But it does mean that some of the capabilities that helped distinguish them may become easier for competitors – and customers – to replicate.

If your moat is essentially “we know how to do a thing”, what happens when the thing becomes much less difficult?

Then there are switching costs.

Some companies retain customers because leaving is genuinely difficult. Data has to be moved. Systems need to be rebuilt. Staff must be retrained. New software needs to be connected to everything else.

It’s expensive. It’s disruptive. And it can go wrong.

So customers stay put, even if they’re not particularly happy.

Those switching costs won’t disappear overnight. But AI can already help write code, translate data, build integrations and teach people how to use unfamiliar systems.

The moat may remain. It just might not be as wide as it used to be.

Brands could also come under pressure.

A trusted brand helps us decide what to buy. We recognise the name, know roughly what it stands for and feel reasonably confident we’ll get what we expect.

But what happens when an AI assistant makes the decision for us?

If I ask an AI agent to compare every insurance policy, mobile phone plan or retailer and choose the one that best meets my needs, familiarity might count for less.

Worse for the company, the primary customer relationship might belong to the AI platform that makes the recommendation, rather than the business that provides the product.

And I’d be wary of cost advantages that come largely from processing routine work more efficiently than competitors. If similar AI tools are available to everyone, today’s low-cost operator might find its rivals catching up.

Which brings me to something I’ve said before: simply using AI probably won’t be a competitive advantage.

It’ll be the ticket to the dance.

Oh sure, early adopters might enjoy a temporary boost to productivity and profit. But if competitors have access to much the same technology, those benefits will probably be competed away through lower prices, better products or both.

Good for customers. Good for society.

But not necessarily a wider moat.

Still, some competitive advantages look much less exposed than others.

AI can create a property website. It can’t recreate REA Group Ltd (ASX: REA)’s listings and audience.

It can assist medical research. It can’t quickly replicate CSL Ltd (ASX: CSL)’s plasma collection network, manufacturing capability, regulatory approvals and accumulated know-how.

And while AI can improve banking technology, it can’t simply hand a new entrant Commonwealth Bank of Australia (ASX: CBA)’s licence, deposit base, customer relationships and public trust.

Nor can it manufacture scarce mineral deposits, prime locations, physical distribution networks or genuine economies of scale.

That doesn’t make those moats invulnerable, by the way.

A company might retain its network but lose control of the customer interface. A trusted incumbent might keep its customers while finding its products easier to compare and its margins harder to defend.

So, what should investors do?

Don’t predict. Prepare.

Ask what the moat is actually made of.

Does the company own something genuinely scarce, or does it merely possess a capability that AI could commoditise?

Are its switching costs structural, or is changing providers just difficult and annoying?

Does it own the customer relationship, or could an AI assistant insert itself between the business and its customers?

And if AI makes the whole industry more productive, who keeps the benefit?

The company?

Maybe.

But it could just as easily be its customers, suppliers or competitors.

And, as always, valuation matters. A wonderful company can be a lousy investment if its share price assumes the moat will last forever.

If the future of that moat has become less certain, investors should demand a larger margin of safety.

The other thing? You don’t have to become a futurist, today. You don’t have to know, with any certainty, what things will look like in five or ten years. But the preparation I talked about earlier means understanding potential risks and weaknesses, so you’ll be more likely to notice if and when they start to impact a company’s profits or prospects.

No, AI probably isn’t the end of moats.

But it might be the end of taking their permanence for granted.

Fool on!

The post Is AI about to kill company moats? appeared first on The Motley Fool Australia.

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

CBA shares have picked up another sell rating, and this time the reasoning has a lot to do with the housing market in general.

Commonwealth Bank of Australia (ASX: CBA) are at $158.93 at the time of writing.

That values the country’s largest lender at roughly $265.7 billion.

The shares have fallen about 5% over the past twelve months.

Nowadays, three separate experts think there is further to go.

Why a broker is calling sell on CBA shares

Remo Greco of Sanlam Private Wealth has the bank rated as a sell.

He is not the only one.

Tony Locantro of Alto Capital and John Athanasiou of Red Leaf Securities both issued sell ratings in late August.

Greco was direct about what worries him.

Investors may want to consider cashing in some gains until a clearer picture emerges about the state of Australia’s housing market, the outlook for interest rates and the broader outlook for credit growth moving forward.

Athanasiou made a slightly altered version of the same argument.

Australian banking remains a mature industry, with intense competition across mortgages and deposits limiting the potential for outsized earnings growth.

What the FY26 result actually showed

However, the financial numbers were not the problem.

CBA delivered cash net profit after tax of $10,982 million in FY26, an increase of 7%.

Revenue also rose 7% to $30,153 million, and the net interest margin held steady at 2.05%.

The fully-franked dividend reached $5.05 per share across the year.

Home loans more than 90 days in arrears stood at 0.73%, while the loan impairment expense rose 9% to $788 million.

That is a good result from a very well-run bank.

It is also mid-single-digit growth, which matters once you look at the price being asked for it.

The valuation problem

CBA trades on a price-to-earnings (P/E) ratio of around 24.3 and yields around 3.2%.

In contrast, ANZ Group Holdings Ltd (ASX: ANZ) trades on 19 times earnings and yields 4.45%.

An investor is paying nearly 30% more per dollar of earnings at CBA while receiving notably less income for the privilege.

The premium has been justified for years by better technology, a stronger deposit franchise, and lower funding costs.

The question is whether those advantages are worth quite this much when profit is growing at 7%.

What could go wrong for CBA shares?

The housing cycle is the immediate risk.

Home loan applications have fallen roughly 15% since the May Federal Budget.

National home values dropped 0.9% in August and now are 3.6% below their March peak.

Australia’s 10-year government bond yield has reached around 5.19%, its highest level in 15 years.

ANZ now expects the Reserve Bank to lift the cash rate by 25 basis points to 4.60% in November.

A higher cash rate widens deposit margins, but it also slows credit growth and pushes arrears higher.

The case for staying put

CBA remains the highest quality bank in the country by some distance.

The company’s deposit base is unmatched, its technology spending is years ahead of its peers, and its credit book has already absorbed one full rate cycle without trouble.

Arrears of 0.73% are elevated but not all that alarming.

Foolish takeaway

CBA shares are not expensive by accident.

The market pays a premium because the bank has consistently earned one.

The real question is whether 24 times earnings is sensible for a business growing profit at 7% a year in a slowing housing market.

On balance, I think the risk now sits with the buyer rather than the long-term holder.

Trimming an oversized position looks reasonable, though I would not sell CBA shares outright on the strength of a broker note alone.

The post A broker just put a sell rating on CBA shares. Is Australia’s biggest bank finally too expensive? appeared first on The Motley Fool Australia.

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• Sell alert! Why this expert is calling time on CBA shares and this top ASX 200 stock
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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 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 tech stocks have had a rough week.

To illustrate, on Wednesday, Xero Ltd (ASX: XRO) fell 5.2% to $98.90.

WiseTech Global Ltd (ASX: WTC) dropped 5.16% to $37.65.

These results occurred as the ASX 200 had its worst session in three months.

The question worth asking for investors is whether the selling has finally gone too far.

Why ASX tech stocks fell so far

The drop is not linked to any news out of the companies themselves.

Bond yields have risen sharply, with the US 10-year Treasury reaching 4.79% and Australia’s long bond returning to levels last seen in 2011.

Technology businesses earn most of their profit years into the future, so a higher discount rate hits them harder than anything else on the market.

This has unfortunately been compounded by a 60% chance of a Reserve Bank rate rise this month.

Here are a few tech stocks hit particularly hard.

1. WiseTech Global

WiseTech is the most interesting name on this list.

The company’s shares have fallen from a 52-week high of $99.70 to $37.65, which is a decline of more than 60%.

In its latest results, FY26 revenue rose 79% to US$1,395.9 million, helped enormously by the e2open acquisition.

Underlying EBITDA climbed 56% to US$644.5 million and free cash flow increased 43% to US$410.7 million.

The problem lies in what the future holds for the company.

FY27 guidance is for revenue growth of just 6% to 10%, and an active ACCC investigation is adding doubts in the back of investors’ minds.

At 50 times earnings, WiseTech is trading at a significant multiple for a company only projected to grow revenue in the single digits.

2. Xero

Xero is the highest quality operator of the three and now is within 70 cents of its 52-week low.

FY26 operating revenue rose 31% to $2.75 billion and annualised monthly recurring revenue jumped 37% to $3.27 billion.

The company added 506,000 customers to reach 4.92 million globally, while average revenue per customer rose 23% to $55.44.

Adjusted EBITDA grew 18% to $757.4 million, though net profit fell 27% to $167.4 million on Melio acquisition costs.

Chief executive Sukhinder Singh Cassidy noted the strength of the platform:

We have powerful momentum across our markets, and delivered strong EBITDA growth while absorbing the Melio integration.

FY27 guidance points to revenue of $3.62 billion to $3.73 billion, which is another year of roughly 30% growth.

3. Life360

Life360 Inc (ASX: 360) is the highest risk of the three.

Shares have fallen nearly 40% year-to-date.

Despite this, second-quarter revenue rose 38% to US$159 million and adjusted EBITDA jumped 53% to US$31.1 million.

However, look a little deeper and the picture unravels.

Net income fell 17.8% to US$5.1 million, and the net income margin halved to 3% from 6%.

At such high multiples, margin reductions are very bad news for investors.

What could make ASX tech stocks work from here

Two things would give ASX stocks some form of relief.

The first is any sign that the Reserve Bank will not need to raise rates. That is because falling yields lift long-duration valuations, such as those belonging to tech stocks, immediately.

The second is evidence that these businesses can convert revenue growth into profit growth without having to rely on acquisitions.

Foolish takeaway

Xero looks best positioned in the short-term, because it is growing at 30% with a strong network effect and it trades near a 52-week low.

WiseTech is cheaper than it was but still carries an unresolved regulatory investigation.

In contrast, Life360 has the strongest growth and the weakest proof of profitability.

A year of falling prices has made ASX tech stocks far more interesting than they were in September 2025.

It has not yet made them safe, and anyone buying here should expect more volatility before the rate cycle settles.

The post Are these ASX tech stocks finally a buy again? appeared first on The Motley Fool Australia.

More reading

• WiseTech shares are turning red again. Is the rally over?
• Why I think Zip and WiseTech shares could be buys in September
• Top 3 beaten-down ASX 200 shares from August worth a second look
• WiseTech shares had their best month in a year. Is this a buying opportunity?
• The five worst-performing ASX 200 shares in August unmasked

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

The team at Morgans have provided fresh commentary on several ASX shares. 

In good news for investors, the broker is optimistic about these three stocks. 

Here’s what the broker had to say. 

Collins Foods Ltd (ASX: CKF)

Collins Foods is a prominent quick-service restaurant operator, primarily known for managing KFC franchises across Australia and Europe.

Its share price is down almost 20% over the last year, however Morgans sees a rebound in sight following the recent AGM. 

The broker said Collins Foods AGM trading update was positive. 

Group sales rose 6.6% over the first 17 weeks of FY27, with Australia resilient and European SSS (same-store-sales) inflecting from the weak start over the last 4 weeks, which we view positively in a tough consumer environment. 

Trading strengthened through the last 4 weeks, with KFC SSS of +3.1% in AU, +3.1% in the Netherlands, driven by the new Halal-certified range, and -0.1% in Germany, a material improvement on the -7.8% (Netherlands) and -7.2% (Germany) start over the first 8 weeks.

The broker has a buy rating and A$10.60 target price on these ASX shares. 

From current levels, this indicates over 28% upside. 

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

Dalrymple Bay Infrastructure owns and operates the metallurgical coal export facility at Dalrymple Bay,  located at the Port of Hay Point, south of Mackay in Queensland. 

It is the world’s largest coal export facility. 

It has risen 20% in the last 12 months, but share price weakness since June has led Morgans to upgrade its view on these ASX shares. 

We upgrade from HOLD to ACCUMULATE, given potential TSR at current prices of c.12% (including cash yield of 5.7%). 12 month target price +4 cps to $5.47/share due to refinements to tax modelling. Otherwise, no change in our fundamental outlook for the business over coming years.

These ASX shares closed trading yesterday at $5.27. 

Smartgroup Corporation Ltd (ASX: SIQ)

SmartGroup provides specialist employee management services to organisations throughout Australia. 

The company’s services include salary packaging, novated leasing, vehicle fleet management, payroll, employee share plan administration, and workforce optimisation.

Morgans is optimistic about the company’s next 12 months following its recent half-year results.

SIQ reported 1H26 NPATA of A$42.4m, up 11% yoy and broadly flat on 2H25. Strong revenue growth (+5.5% hoh) was absorbed by higher opex spend (+7.3% hoh), softening EBITDA margins to 41.1% (-100bps on 2H25). 

Given the meaningful share price pullback, we upgrade to an ACCUMULATE (previously HOLD). The 2H will benefit from the unwind of a substantial revenue pipeline, an ongoing supportive demand backdrop across novated leasing (policy led) and potential full-year capital management initiatives. A$12.15ps price target.

This indicates just over 7% upside from current levels. 

The post 3 ASX shares just got big upgrades and are tipped to rise almost 30% appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Liontown, Collins Foods, and Goodman shares
• Here are the top 10 ASX 200 shares today
• Smartgroup posts record H1 2026 results: earnings jump, dividend up
• Dalrymple Bay Infrastructure posts stronger profit and higher distribution

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 recommended Collins Foods and Smartgroup. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.