Category: Stock Market

The ASX dividend stock Australian Ethical Investment Ltd (ASX: AEF) has fallen heavily, it’s actually down 41% from August 2025. It’s down even more from its peak in 2021, though I’m not going to focus on that previous share price as its price/earnings (P/E) ratio may have been too stretched then.

Australian Ethical provides investors with investment management products that “align with their values and provide long-term, risk-adjusted returns. It offers both managed funds and superannuation. I’m excited by the superannuation division because of the steady inflows that provides.

The business recently announced its FY26 half-year result, which included several strong numbers, giving me confidence that the business could be a strong long-term investment.

Great result

The report was for the six months to 31 December 2025.

The ASX dividend stock revealed that underlying revenue increased 13% to $65.8 million and operating expenses increased by 9% to $45.1 million.

The strength of its operating leverage meant that its profit grew at a faster pace. Underlying profit after tax climbed 25% to $14.4 million and statutory net soared 42% to $13.3 million.

Underlying earnings per share (EPS) grew by 24% to 12.54 cents per share, allowing the interim dividend to be hiked by 60% to 8 cents per share. That means the business is holding onto a significant amount of its generated profit to reinvest for future opportunities.

The business reported that its funds under management (FUM) reached $14.08 billion and it saw continued positive organic net flows of $0.26 billion, with superannuation net flows increasing 19% year-on-year. It also noted its funds delivered a positive investment performance of $0.16 billion.

Why I think this is a good time to invest in the ASX dividend stock

Australian Ethical noted that it has transitioned to a single administration platform, laying the groundwork for enhanced member services and ongoing cost savings.

The company’s underlying cost-to-income (CTI) ratio improved from 71.4% in FY25 to 68.8% in the first half of FY26, showing that its margins are capable of increasing and could bode well for ongoing operating leverage as the years go by.

Australian Ethical is expecting to grow profit, with positive net flows expected to continue in the second half of FY26.

With the Australian Ethical share price down significantly in recent times, this looks like a compelling time to invest because the grossed-up dividend yield has been boosted to around 5%, including franking credits, at the time of writing.

Further dividend growth looks possible, meaning the business can provide even more passive income to investors.

The post 1 ASX dividend stock down 41% I’d buy right now appeared first on The Motley Fool Australia.

More reading

• How to invest $10,000 to aim for a 15% dividend yield
• 2 ASX shares that I rate as buys for both growth and dividends

Motley Fool contributor Tristan Harrison has positions in Australian Ethical Investment. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Australian Ethical Investment. The Motley Fool Australia has recommended Australian Ethical Investment. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When one expert rates a ASX share as a buy, that is something to take note of. When there are numerous analysts who rate a company as a buy, that could suggest that there’s a clear opportunity being presented by the market.

I’m going to look at two ASX shares which some of the highest number of analyst buy ratings on the ASX.

We’re not just talking about one or two positive ratings, but several, with most/all of the ratings being a buy.

Let’s get into those exciting ASX shares.

Coles Group Ltd (ASX: COL)

According to the Commsec collation of analyst ratings on the business, there are currently 15 buys.

The business recently reported its FY26 half-year result, which was pleasing to the broker UBS. The broker said that the HY26 operating profit (EBIT) and net profit (NPAT) were both in line with market expectations.

However, the trading of the first seven weeks of the second half of FY26 of growth of 3.7% was below UBS’ expectations of 4.4% growth.

UBS believes that execution and price trust favour Coles over its main competitor because of “promotional effectiveness (fewer, better), while recently delivered investments (e.g. Witron ADC (availability), Ocado CFCs (online)) provide cost leadership and confidence about CY26E sales growth.”

The broker also prefers Coles over Woolworths Group Ltd (ASX: WOW) because there is a wider-than-average price/earnings (P/E) ratio gap based on the one-year forward earnings.

UBS predicts Coles could generate a net profit of $1.25 billion in FY26, translating into a forward P/E ratio of under 23, at the time of writing.  

Universal Store Holdings Ltd (ASX: UNI)

According to the Commsec collation of analyst ratings on the business, there are currently 11 buys.

UBS describes Universal Store as a specialty youth casual fashion retailer, operating under the Universal Store, Perfect Stranger and Thrills store banners.

The broker noted that Universal Store’s operating profit (EBIT) and net profit beat analyst expectations with stronger sales and a higher gross profit margin.

UBS explained why it’s optimistic about the ASX share:

Retain buy rating given confidence in the revenue & gross margin outlook, driven by market share gains from strong execution, and leveraging the generally more resilient youth consumer.  

We remain confident in the UNI revenue outlook due to merchants that judiciously adapt product ranges & persistently strong in-store execution, which drives customer conversion & basket size expansion. These drivers support sustained market share gains in the fragmented youth apparel market.

A secondary tailwind is the youth consumer where, based on UBS Research, spending intentions are stronger than the all-age consumer and apparel & footwear categories are of greater importance (remain strong & above the all-age consumer).

Broker UBS estimates that Universal Store could generate a net profit of $43 million in FY26. That means, at the time of writing, the Universal Store share price is valued at 15x FY26’s estimated earnings.

The post 2 ASX shares highly recommended to buy: Experts appeared first on The Motley Fool Australia.

More reading

• How to invest $10,000 to aim for a 15% dividend yield
• Could this really be the turning point for Woolworths shares?
• 5 ASX dividend shares to hold for the next decade
• Are Coles or Woolworths shares a better buy right now?
• 32 ASX shares about to go ex-dividend

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

For investors looking to generate regular income from the share market, exchange traded funds (ETFs) can be a simple and effective option.

Rather than relying on a single dividend-paying share, ETFs provide exposure to a basket of income-generating businesses in one investment. This diversification can make income streams more stable and easier to manage over time.

With that in mind, here are three ASX ETFs that could be worth considering for passive income.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The first ASX ETF that income investors may want to look at is the Vanguard Australian Shares High Yield ETF.

This fund focuses on Australian shares that are expected to pay above-average dividend yields. It holds a diversified portfolio of large and mid-sized ASX shares that have strong income profiles.

Its holdings include well-known dividend payers such as Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and Telstra Group Ltd (ASX: TLS).

Because many Australian shares pay fully franked dividends, investors can also benefit from franking credits, which can enhance the effective income received.

For investors seeking exposure to a broad collection of local dividend stocks in one trade, the Vanguard Australian Shares High Yield ETF offers a straightforward solution. It currently provides a 4% dividend yield.

Betashares S&P 500 Yield Maximiser ETF (ASX: UMAX)

Another ASX ETF that could appeal to income investors is the Betashares S&P 500 Yield Maximiser ETF.

This fund takes a different approach to generating income. Instead of relying solely on dividends from its holdings, it uses a covered call strategy to boost the income paid to investors.

It holds companies from Wall Street’s S&P 500 index, which means investors gain exposure to global giants such as Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), and Amazon (NASDAQ: AMZN).

However, by writing call options over these holdings, the ETF collects option premiums that can then be distributed as income. This strategy can lead to higher yields than traditional equity ETFs, though it may limit some upside during strong market rallies.

Another positive is that Betashares changed the payouts from quarterly to monthly this year, meaning more frequent income for investors.

At present, it trades with a dividend yield of 5.7%.

Betashares Global Royalties ETF (ASX: ROYL)

A final ASX ETF that could be worth considering for passive income is the Betashares Global Royalties ETF.

This fund invests in companies that earn revenue from royalties rather than traditional product sales. These businesses often receive payments from intellectual property, natural resources, or infrastructure rights.

The portfolio includes companies such as Franco-Nevada (NYSE: FNV), which collects royalties from gold mining operations, and InterDigital (NASDAQ: IDCC), which earns licensing income from wireless technology patents.

Royalty-based businesses can be appealing because they often have lower operating costs and scalable revenue models. As the underlying industries grow, royalty payments can increase without requiring large capital investments.

This structure can support attractive income streams for investors. For example, it currently offers a 5.6% dividend yield.

The Betashares Global Royalties ETF was recently recommended by analysts at Betashares.

The post Buy these top ASX ETFs for passive income appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend ETFs that could help you retire at 57
• The easiest way to earn $1,000 a month in ASX dividends
• How to retire early using ASX dividend shares
• How to build a ‘lazy’ passive income portfolio with just 1 ASX ETF
• How to make $25,000 of passive income a year

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 positions in and has recommended Amazon, Apple, and Microsoft and is short shares of Apple and BetaShares S&P 500 Yield Maximiser Fund. The Motley Fool Australia has positions in and has recommended BetaShares S&P 500 Yield Maximiser Fund and Telstra Group. The Motley Fool Australia has recommended Amazon, Apple, BHP Group, Microsoft, and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

After last week’s turbulence, investors may be sifting through news to find the current value. 

These S&P/ASX 200 Index (ASX: XJO) shares are currently trading at a discount compared to price targets from brokers. 

Lendlease Group (ASX: LLC)

Lendlease is an international property development and construction business operating across Australia, the Americas, the UK, Europe, and Asia.

Its share price has consistently declined over the last 12 months. 

This included a significant fall on the back of February’s half-year results.

At the time of writing, the ASX 200 company is down 25.78% year to date and 35.6% over the last year. 

However, based on analysts outlook, it may be a buy low opportunity after the rough start to 2026. 

6 analyst forecasts via TradingView have an average 12 month price target of $5.33 on this ASX 200 stock. 

From last week’s closing price of $3.83, this indicates a potential upside of just over 39%. 

Seek Ltd (ASX: SEK)

Seek is a global online employment marketplace, serving Australia, Asia, Latin America, and beyond.

Its share price has recently hit 5-year lows, but has slowly started to turn the corner. 

At the time of writing it is down 27% since the start of the calendar year. 

The ASX 200 company has been one of the many tech shares impacted by rising AI disruption fears. 

Despite this, it posted healthy earnings in February which included revenue growth and a record dividend.

I think the ASX 200 shares might have hit rock bottom, and could be on the way back up. 

It seems brokers agree. 

Following earnings results, Morgans kept its 12-month share price target at $27.50 and upgraded Seek shares to a buy rating. 

From last week’s closing price of $16.93, that indicates an upside of 62.4%. 

Computershare Ltd (ASX: CPU)

Another ASX 200 stock trading below fair value is Computershare. 

It is an Australian financial administration company offering global services in corporate trusts, stock transfers, and employee share plans.

It was also hit hard during earnings season, but may now be trading at an enticing entry point. 

This ASX 200 stock is down 23% over the last year. 

It closed trading last week at $30.61. 

However, 6 analysts offering one year price targets (via TradingView) have an average target of $36.18. 

That indicates an upside of just over 18%. 

Earlier this year, analysts at Citi placed a one year price target of $39.60. 

If this ASX 200 stock reached this target, it would be a rise of close to 30%. 

The post 3 ASX 200 shares trading well below brokers’ targets appeared first on The Motley Fool Australia.

More reading

• 2 ASX stocks to buy and 1 to sell
• 3 ASX growth stocks primed to rocket in 2026
• Here are the top 10 ASX 200 shares today
• These ASX 200 shares have sunk to 6-month lows. Time to buy?
• Experts say IAG shares and 2 other stocks are buys at 52-week lows this week

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.

While interest rates on term deposits have been improving, they still pale in comparison to what is on offer in the share market.

For example, here are three ASX dividend shares that are rated as buys and tipped to offer dividend yields of 4.6% or more.

Here’s what they are recommending:

Cedar Woods Properties Limited (ASX: CWP)

The first ASX dividend share that could be a buy according to analysts is Cedar Woods.

It is one of Australia’s leading property developers with a portfolio that is diversified by geography, price point, and product type.

Bell Potter remains bullish on the company due to its exposure to Australia’s chronic housing shortage.

It is expecting this to underpin dividends per share of 39 cents in FY 2026 and then 41 cents in FY 2027. Based on its current share price of $8.55, this equates to 4.6% and 4.8% dividend yields, respectively.

Bell Potter has a buy rating and $10.20 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that is rated as a buy is the HomeCo Daily Needs REIT.

It is Australia’s leading daily needs real estate investment trust (REIT) with total assets of approximately $5.1 billion spanning approximately 2.3 million square metres of land in Australia’s leading metropolitan growth corridors of Sydney, Melbourne, Brisbane, Perth and Adelaide.

Last month it reported its half-year results and revealed occupancy and cash collections above 99%, consistently positive leasing spreads, and comparable NOI growth of 4%.

UBS is positive on the company. It believes it will pay shareholders dividends of 9 cents per share in both FY 2026 and FY 2027. Based on its current share price of $1.24, this would mean dividend yields of 7.25%.

The broker currently has a buy rating and $1.55 price target on its shares.

Regal Partners Ltd (ASX: RPL)

Another ASX dividend share that analysts are tipping as a buy is Regal Partners.

It is a specialist alternative investment manager with funds under management of $20.9 billion across its eight brands. These are Regal Funds Management, PM Capital, Merricks Capital, Taurus Funds Management, Attunga Capital, Kilter Rural, Argyle Group, and Ark Capital Partners.

Morgans is a big fan of the company and believes its strong form has positioned it to reward shareholders with fully franked dividends of 20 cents in FY 2025 and then 21 cents per share in FY 2026.

Based on its current share price of $3.02, this equates to dividend yields of 6.6% and 7%, respectively.

Morgans also sees plenty of upside for its shares over the next 12 months. It has a buy rating and $5.00 price target on them.

The post Forget term deposits and buy these ASX dividend stocks appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend shares to buy with $5,000
• Passive income: How much would I need to invest in ASX shares to earn $1,000 every month?
• 3 ASX dividend stocks to buy with $3,000 in March
• Forget term deposits and buy these ASX dividend stocks
• 3 top ASX dividend shares to buy in March

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 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.

ASX ETFs are a great way to gain broad market exposure in just one trade. 

Tracking indexes like the S&P/ASX 200 Index (ASX: XJO) or S&P 500 Index (SP: .INX) is a great foundation for a portfolio. 

However it’s important for investors to understand how concentrated the ASX 200 is to just a handful of companies. 

The most concentrated share market in the world

A new report from VanEck has shed light on how the ASX 200 differs from other global benchmarks. 

In fact, the ASX 200 is one of the most concentrated developed-market indices on the planet.

According to VanEck, the top 5 securities account for 32.73% of the S&P/ASX 200 Index:

• BHP Group Ltd (ASX: BHP) represents 9.53%. 
• Commonwealth Bank of Australia (ASX: CBA) 9.27%
• National Australia Bank Ltd (ASX: NAB) 4.93%
• Westpac Banking Corp (ASX: WBC) 4.93%
• ANZ Group Holdings Ltd (ASX: ANZ) 4.06%. 

The Australian share market is structurally overweight materials and financials, and structurally underweight technology and global growth.

If you own the index, you own the concentration. We’re not saying, don’t own the banks, we’re saying, it’s worth pondering if it warrants such a large allocation.

A solution for managing concentration risk

There are ASX ETFs that aim to provide a direct return of the ASX 200 and along with it, an overweight towards banks and materials.

Some investors will be content with tracking the ASX 200 at its current weighting. 

VanEck contends that an alternative to this strategy is the VanEck Vectors Australian Equal Weight ETF (ASX: MVW). 

As the name suggests, it aims for true diversification by equally weighting across companies and reducing sector concentration.

MVW has less exposure to the mega-caps that dominate the S&P/ASX 200 Index compared to many Australian equity portfolios. MVW is underweight mega cap companies and overweight those large companies outside the mega-caps. Relative to the S&P/ASX 200, MVW has a higher weighting to stocks outside the top 15.

What’s in the fund?

At the time of writing, it is made up of 76 holdings, with no individual holding representing more than 1.6% of the total fund. 

By sector, its largest allocation is to: 

• Materials (20.1%)
• Financials (18.7%)
• Industrials (16.3%). 

VanEck argues this can provide resilience across various market cycles, avoiding concentration risk inherent in traditional market cap indices. 

For investors focused on long-term stability and enhanced diversification, MVW’s equal-weighted approach offers a compelling alternative for core Australian equities.

The post How to avoid an over concentrated portfolio with one ASX ETF appeared first on The Motley Fool Australia.

More reading

• What to make of Xero’s 12% recovery last week?
• 5 things to watch on the ASX 200 on Monday
• How to position your portfolio for the AI impact? Expert
• 2 ASX stocks to buy and 1 to sell
• Worried about a bear market in 2026? 3 ASX shares for peace of mind

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.

Xero Ltd (ASX: XRO) shares are under the microscope once again after the ASX technology stock rose 12% last week. 

It’s been a volatile 2026 for the company, which has suffered heavy losses at the hands of AI fears.

Xero shares are down significantly from 12-month highs, however last week was overwhelmingly positive amidst a broader market fall. 

Australia’s benchmark index, the S&P/ASX 200 Index (ASX: XJO), fell nearly 3%. 

So is this the beginning of a larger recovery for Xero?

Here’s what experts are saying. 

Xero shares recover 

Xero has been one of the many ASX tech companies suffering from negative sentiment. 

Technology shares have come under fire as fears have risen regarding AI integration/automation. 

Essentially, many ASX tech firms are software-as-a-service (SaaS) companies (e.g., accounting, logistics, analytics platforms).

Investors worry that new AI tools could perform similar tasks faster and cheaper, reducing demand for traditional software subscriptions.

This puts Xero’s core service directly in the firing line, which is accounting software made for small businesses and sole traders.

The share price swung around heavily last week, ultimately finishing the week 12% higher. 

Despite the recovery, its share price is still down almost 50% in the last 12 months. 

What are experts saying?

Xero chief executive Sukhinder Singh Cassidy said (via AFR) the company’s core products cannot easily be replicated by artificial intelligence tools. 

In an investor briefing last week, she said: 

We are deeply focused on capturing the global AI and US accounting plus payments TAM. Xero is well positioned to shepherd SMBs into the AI era and take advantage of this technology.

However, according to The Bull, analyst sentiment has turned decidedly cautious. 

Jefferies downgraded Xero from ‘Buy’ to ‘Hold,’ expressing concerns that the company may prioritise aggressive growth in the competitive U.S. market at the expense of near-term profitability. 

RBC Capital went further, cutting its rating to ‘Sector Perform’ from ‘Outperform’ and slashing the price target from A$230 to A$187.

While this suggests negative sentiment, it’s worth noting this price target still indicates plenty of upside from last week’s closing price of $87.63. 

Elsewhere, Fairmont Equities listed it as a sell. 

Last month, Blackwattle mid-cap portfolio managers Tim Riordan and Michael Teran weighed in on the future for Xero shares. 

They reinforced the short-term outlook as positive, and Xero remains a market-leading, global accounting SaaS software provider with strong financial metrics.

However, the recent AI agent updates have created significant disruption implications, and it has become difficult to have confidence in the terminal value of some legacy technology companies.

As such we have focused the portfolio on those which we assess to have the strongest network effects.

Foolish takeaway 

The early period of this rotation out of ASX technology shares led to plenty of “don’t panic” messaging from experts. 

However it seems the tide is turning to a cautious outlook for Xero. 

The core product is still generating healthy subscriptions, but the long-term outlook has certainly become more foggy. 

The post What to make of Xero’s 12% recovery last week? appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth stocks set up for massive gains in 2026+
• Sell alert! Why this top analyst is calling time on Xero and CSL shares
• Why investors are piling back into these ASX tech shares today
• Here are the top 10 ASX 200 shares today
• 3 ASX growth shares you’ll wish you’d bought at these cheap prices

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

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week deep in the red. The benchmark index fell 1% to 8,851 points.

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

ASX 200 expected to sink

The Australian share market looks set for a disappointing start to the week following declines on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 156 points or 1.75% lower. In the United States, the Dow Jones was down 0.95%, the S&P 500 dropped 1.3%, and the Nasdaq tumbled 1.6%.

Oil prices surge

It could be a very positive start to the week for ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices surged on Friday night. According to Bloomberg, the WTI crude oil price was up 12.2% to US$90.90 a barrel and the Brent crude oil price was up 8.5% to US$92.69 a barrel. This meant that oil futures rallied 35% for the week, which is the biggest gain in futures trading history.

ASX 200 shares going ex-div

A couple of ASX 200 shares are going ex-dividend this morning and could trade lower. These are entertainment giant Nine Entertainment Co Holdings Ltd (ASX: NEC) and private hospital operator Ramsay Health Care Ltd (ASX: RHC). The latter will be paying its shareholders a fully franked 42.5 cents per share interim dividend later this month on 26 March.

Gold price rises

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a good start to the week after the gold price pushed higher on Friday night. According to CNBC, the gold futures price was up 1.6% to US$5,158.7 an ounce. The precious metal rose after US economic data wasn’t supportive of rate hikes.

ASX 200 rebalance

S&P Dow Jones Indices has announced changes in the S&P/ASX Indices, effective prior to the open of trade on March 23 following its quarterly review. Catapult Sports Ltd (ASX: CAT), DigiCo Infrastructure REIT (ASX: DGT), and EBOS Group Ltd (ASX: EBO) shares are being dumped from the index. Replacing them will be Predictive Discovery Ltd (ASX: PDI), SRG Global Ltd (ASX: SRG), and Vulcan Energy Resources Ltd (ASX: VUL).

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Northern Star Resources to join S&P/ASX 20 in March 2026 index shake-up
• Don’t overthink it: The best $10,000 approach to start investing in 2026
• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: Guzman Y Gomez, Lovisa, and Newmont shares

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Catapult Sports. The Motley Fool Australia has positions in and has recommended Catapult Sports. The Motley Fool Australia has recommended Nine Entertainment and Srg Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Artificial intelligence impact has been the emerging story of 2026. 

Many ASX and global technology shares have been heavily sold off already due to disruption fears.

AI fears

The early tech sell-off has been a result of the fear that software and tech companies’ main products and functions could be replaced by AI. 

Should this happen, consumers would theoretically be able to access more affordable and efficient products rather than paying for the services of these companies. 

At this stage, this fear is based largely on a prediction rather than proof. 

However, some technology companies will undoubtedly be able to integrate AI into their existing systems, ultimately benefiting from AI advancements. 

There have already been examples of this AI adoption by companies like Amazon and here in Australia WiseTech Global Ltd (ASX: WTC).

The bottom line is, investors have been rotating out of technology shares due to AI fears. 

That means some tech stocks are at an all-time value due to misguided fear. 

Meanwhile, others might have been correctly sold off as their products could truly be replaced in the near future.

How do investors know how to identify the two?

A new report from Vanguard has weighed in on how the investment company views this problem. 

How to prepare for AI’s economic ripple effect

In the recent report, Vanguard said AI’s transformative impact is likely to extend well beyond the tech sector, creating widespread economic opportunities.

According to Vanguard, AI finds itself in a tug-of-war with another powerful, countervailing megatrend: fiscal deficits.

On one side, AI will potentially act as a powerful engine for growth, boosting productivity, innovation, and real GDP, and helping governments grow their way out of fiscal pain.

On the other side, structural fiscal deficits, driven largely by an aging society, create downward pressure by potentially driving up inflation and interest rates.

Based on this, there are two possible scenarios:

• AI wins: Productivity accelerates; growth surprises to the upside.
• Deficits dominate: Fiscal pressures weigh on markets and risk assets.

Vanguard’s model shows that AI is likely to win the tug-of-war, potentially driving U.S. real GDP growth above 3%—a significant upgrade from current consensus forecasts.

However, the second-most likely scenario is that AI fails and deficits dominate, which would result in a lower-than-consensus growth outcome of around 1.0%.

Focus on companies using AI to maximum effect

Vanguard said when innovations like AI mature and diffuse through the economy, the biggest beneficiaries aren’t necessarily the original innovators.

History shows that value rotates from technology creators to technology users which is the opposite of what many investors assume.

The companies building the new technology are the early winners, but over time return on equity (ROE) accrues to businesses that use it to boost productivity.

These forces help explain why value stocks have historically outperformed during the later stages of major technology cycles, when adoption broadens beyond the innovators.

This means the biggest gains may flow to those sectors and regions that aren’t currently in the spotlight. Think financials, healthcare, and industrials—sectors where Australia shines.

Foolish takeaway 

Based on the report from Vanguard, AI is not just a cycle, it’s a mega trend. 

Vanguard thinks of mega trends as those forces that are likely not just to affect markets but transform the economy and society.

Those driving the early growth may not be the companies set to benefit the most, as beneficiaries will be those companies that adopt and utilise AI to their advantage. 

The post How to position your portfolio for the AI impact? Expert appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why Catapult, DroneShield, Karoon Energy, and WiseTech shares are charging higher
• Why investors are piling back into these ASX tech shares today
• 5 ASX shares I’d buy and hold for the next decade
• These 2 ASX shares have the booster power to rocket higher in 2026

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

There are a lot of ASX stocks to choose from on the local share market.

But which ones should you buy and what should you avoid?

Let’s take a look at two stocks that Morgans has given buy ratings to and one that it is tipping as a sell. Here’s what you need to know:

Flight Centre Travel Group Ltd (ASX: FLT)

Morgans remains positive on this travel agent giant. In response to its better than expected half-year results, the broker put a buy rating and $18.05 price target on its shares. Based on its current share price of $12.17, this implies potential upside of 48% for investors. It commented:

FLT’s 1H26 NBPT was up 4.1%, a beat on guidance for a flat result. The Corporate result was the highlight with NPBT was up 20%, while Leisure was better than feared down only 4%. The 3Q26 is off to a strong start and importantly Leisure is back in growth. FY26 guidance was reiterated. We have made minor upgrades to our forecasts. FLT’s fundamentals remain attractive (FY27 PE of 10.6x) and we retain a Buy recommendation with a new A$18.05 price target.

Seek Ltd (ASX: SEK)

Another ASX stock that Morgans is bullish on this month is job listings giant Seek.

While the broker has some concerns over the AI disruption threat, it isn’t enough to stop it from putting a buy rating and $27.50 price target on its shares. Based on its current share price of $16.93, this suggests that upside of 60% is possible between now and this time next year. It said:

SEK’s 1H26 result was largely as per expectations with net revenue (+12% on pcp), Adjusted EBITDA (+19% on pcp) and adjusted NPAT (+35% on pcp) all broadly in line with Visible Alpha consensus and MorgansF. We make only marginal adjustments to our forecasts taking into account the updated guidance.

Whilst our DCF-derived price target remains unchanged at A$27.50 the recent sharp share price pullback now results in ~70% [now ~60%] TSR upside. We move to a Buy recommendation accordingly, though SEK has still many questions to answer on the AI threat.

National Australia Bank Ltd (ASX: NAB)

The ASX stock that Morgans is bearish on this month is banking giant NAB.

Although it delivered a solid quarterly update, the broker believes NAB’s shares are overvalued at current levels. It has put a sell rating and $37.27 price target on its shares. Based on its current share price of $46.82, this implies potential downside of 20% for investors. It said:

Like its peers that reported in February, NAB’s 1Q26 trading update showed it is benefitting from a supportive interest rate, credit growth, and asset quality environment. We make upgrades to our forecasts to reflect performance and outlook.

12 month target price set at $37.27/sh. With more aggressive assumptions than previously we estimate a higher fundamental value for NAB. However, the share price is still trading far ahead of this revised estimate. SELL retained, with potential TSR of -17% (including 3.6% cash yield).

The post 2 ASX stocks to buy and 1 to sell 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 recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.