Category: Stock Market

AGL Energy Ltd (ASX: AGL) is an underperforming ASX utilities stock. 

In 2025, the S&P/ASX 200 Utilities (ASX:XUJ) index is up a healthy 7%. 

Meanwhile, AGL shares have fallen almost 19%. 

The company remains one of the top 5 largest utilities stocks by market capitalisation. 

After falling significantly this year, the team at Ord Minnett has reiterated a buy recommendation on the ASX utilities stock along with an attractive price target. 

Here is the latest from the wealth management firm. 

Increased confidence

Ord Minnett said after recently attending the AGL Energy investor day, it came away with greater confidence in its already positive view on the company’s investment proposition. 

Yesterday’s report noted a highlight of the day was seeing how AGL’s investment of more than $800 million in recent years has allowed the development of flexible generation capacity of 3.3 gigawatts (GW) at Bayswater. 

Ord Minnett said trials in October successfully took coal generation units offline and then put them back online within five minutes, thereby matching the flexibility inherent in gas-powered electricity generation.

In effect, these developments mean AGL can optimise margins by shutting down and restarting its generation units between demand peaks as required. 

According to the company, testing during October showed that applying the new operating pattern across four generation units for 100 similar days equated to circa $25 million in annualised earnings. 

AGL expects Bayswater to remain the lowest-cost generator in NSW given recent spot coal contracts struck by the company, its additional flexible capacity, and high availability rates. This position, and new pricing for supply to the Tomago aluminium smelter from 2028, indicates material upside to earnings forecasts.

Raised earnings and price target

Following the investor day, Ord Minnett raised FY26 EPS estimates by 6.1% to incorporate wider electricity margins partially offset by higher growth capital expenditure. 

Meanwhile, forecasts for FY27 and FY28 have been trimmed 0.5% and 0.2%, respectively. 

It has upgraded its target price on this ASX utilities stock to $13.00 from $12.00. It reiterated its buy recommendation.

Based on yesterday’s closing price of $9.26, this indicates an upside of 40.38%. 

Elsewhere, it seems other analysts and brokers are tipping a similar rebound. 

Late last month, Macquarie placed a price guide of $11 on the ASX utilities stock. 

TradingView has a one year price target of $11.41. 

The post Ord Minnett tips 40% upside for this ASX utilities stock appeared first on The Motley Fool Australia.

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

ASX All Ords gold share Aurum Resources Ltd (ASX: AUE) just did it again.

And by ‘it’, I mean racing ahead of the All Ordinaries Index (ASX: XAO).

Aurum Resources shares closed up 1.70% on Wednesday, trading for 60 cents apiece, well ahead of the almost flat finish posted by the All Ords yesterday.

That sees the Aurum share price up a whopping 130.77% since market close on 31 January. Or enough to turn an $8,000 investment into $18,461.6.

The ASX All Ords gold share has been catching tailwinds on several fronts.

First, the gold price has surged more than 60% in 2025, with the yellow metal currently fetching US$4,214 per ounce.

Second, investors have been keeping a close eye on the growing potential of the miner’s Boundiali and Napie Gold Projects, both located in Côte d’Ivoire (formerly Ivory Coast).

And earlier in December, Aurum caught the attention of Canaccord Genuity, which initiated coverage on the stock with a speculative buy rating.

Here’s what you need to know.

ASX All Ords gold share tipped to keep shining bright

Canaccord sees significant opportunity at the Boundiali project.

“The flagship Boundiali consists of seven neighbouring exploration tenements stretching 75km north to south for ~1,470km2 with a total combined resource of 2.41Moz @ 1.0g/t Au,” the broker said.

And the ASX All Ords gold share has a dozen drill rigs aiming to boost that gold resource.

According to Canaccord:

AUE believes its competitive advantage is its ability to run a fleet of company owned diamond drill rigs, which can be operated at costs much lower than its peers. AUE and its twelve operating rigs can potentially achieve higher drill advancement rates, delivering more resource updates at lower costs compared to its peers, in our view.

Commenting on the potential resource growth at Aurum’s two projects, Canaccord said:

We see potential for the broader Boundiali Gold Project to host ~3.1Moz over time, inclusive of the 2.4Moz defined to date. We see potential for the broader Napie Gold Project to host ~1.1Moz over time, inclusive of the 0.87Moz defined to date.

And the company looks well-funded for ongoing exploration.

“AUE reported cash of A$23.7m as at the end of the SepQ’25 with no outstanding debt,” Canaccord noted.

“It subsequently sold ~A$23m of Montage Gold Corp (TSE: MAU) shares, issued in lieu of cash consideration as part of MAU’s 9.9% strategic investment, for estimated pro forma cash of ~A$40m,” the broker added.

Canaccord has a price target of $1.50 on the ASX All Ords gold share. That represents a potential upside of 150% from Thursday’s closing price.

The post Up 131% since February, why this ASX All Ords gold share is forecast to more than double again appeared first on The Motley Fool Australia.

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

The Qantas Airways Ltd (ASX: QAN) share price has dropped close to 20% since its 2025 peak, as the chart below shows. When a large business has fallen that far, I think it’s a great time to consider an investment as a buy-the-dip opportunity.

As the last five years have demonstrated, there can be significant volatility in the valuation of a business like this. Travel demand is not a certain thing year to year, and fuel prices can change significantly, so it’s no wonder that investors’ thoughts on the business can change quite significantly over 12 months.

In August, the business delivered a strong set of results. Underlying profit before tax increased 15% to $2.39 billion, and statutory net profit after tax (NPAT) jumped 28%. It also revealed an improvement in both Qantas and Jetstar on-time performance and customer satisfaction scores.

Pleasingly, this strong level of profit helped the business pay total dividends of $800 million to shareholders for FY25. Let’s take a look at whether the Qantas share price is an attractive buy today or not.

What’s the outlook for earnings?

The broker UBS recently said in a note that the Australian international market is expected to grow FY26 capacity by 9% year over year, with consistent growth across both peak Australian summer months and off-peak.

Qantas and Jetstar reportedly represent only 26% of the Australian international market, but are also growing capacity strongly. UBS suggested that unless there’s strong growth of passenger demand, this may have an impact on market fares or (plane) load factors.

Qantas is adding capacity to mainland US, New Zealand, Singapore, and Hawaii routes. Jetstar is adding capacity to Bali, New Zealand, Thailand, South Korea, and Singapore routes. Jetstar is also entering the Philippines.

UBS suggests the Australia-US market is “heavily underserved”, but New Zealand and Bali look like more competitive routes. The bulk of new foreign capacity is being added from the Middle East, Turkey, China, Hong Kong, and Malaysia, suggesting UK and Europe routes may be becoming more competitive for Qantas.

But, UBS expects that Qantas’ core customers (corporate and premium leisure) will be “relatively loyal”, though price-sensitive travellers “pose more risk”.

The broker is forecasting that Qantas’ group international revenue per available seat kilometre (RASK) can grow 3% in the FY26 second half, with the airline guiding RASK for between 2% to 3% growth in the FY26 first half.

Is the Qantas share price a buy?

UBS wrote:

We think QAN’s challenge is not so much competitor pressure, but whether the core Australian customers will grow with it. So far, FY26 has been tracking well.

It has a buy rating on the business, with a price target of $11.50. That implies a possible rise of more than 17% in the next year from where it is today. For FY26, UBS predicts that Qantas could deliver $1.79 billion in net profit and a dividend per share of 35 cents.

The post Is the Qantas share price a buy today? appeared first on The Motley Fool Australia.

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

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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.

If you’re looking to put $3,000 to work before the end of the year and stock picking isn’t your thing, then it could be worth considering exchange traded funds (ETFs).

Whether you are seeking exposure to megatrends, fast-growing emerging markets, or long-term structural themes, the ETFs below offer a compelling mix for a small, high-impact investment.

Here are three ASX ETFs worth considering with $3,000 this December.

Betashares Global Cybersecurity ETF (ASX: HACK)

In recent years, cybersecurity has become a non-negotiable expense for businesses, governments, and consumers. With cyberattacks increasing in frequency, complexity, and cost, global spending on digital defence is surging.

The Betashares Global Cybersecurity ETF gives investors exposure to leading cybersecurity companies such as CrowdStrike Holdings (NASDAQ: CRWD), Palo Alto Networks (NASDAQ: PANW), and Cisco Systems (NASDAQ: CSCO). These are businesses providing essential security infrastructure, software, and threat detection systems to organisations worldwide.

Demand for cybersecurity is not cyclical, it is structural. As more devices and services connect to the internet, the need for reliable protection grows even faster. For investors seeking long-term, tech-driven growth without the need to pick individual winners, this fund could be a compelling addition to a portfolio in December.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

The Betashares Global Robotics and Artificial Intelligence ETF taps into two of the most transformative forces shaping the global economy: robotics and artificial intelligence.

These technologies are already reshaping manufacturing, medicine, logistics, retail, and consumer electronics, and the pace of adoption is accelerating. Among its holdings are companies leading the charge such as Nvidia (NASDAQ: NVDA), Intuitive Surgical (NASDAQ: ISRG), and ABB Ltd (SWX: ABBN). Nvidia powers the world’s AI chips, Intuitive Surgical leads robotic-assisted surgery, and ABB is a global automation heavyweight.

They, and the rest of its holdings, look well-positioned for growth over the next decade and beyond. This bodes well for the performance of the Betashares Global Robotics and Artificial Intelligence ETF, which was recently recommended by Betashares.

Betashares India Quality ETF (ASX: IIND)

Finally, the Indian economy could be one of the most powerful growth stories of the next 20 years. With a young population, rising incomes, rapid urbanisation, and increasing global influence, the country is positioning itself as a major economic engine.

The Betashares India Quality ETF gives investors exposure to high-quality Indian stocks such as Infosys (NYSE: INFY), HDFC Bank (NSEI: HDFCBANK), and Tata Consultancy Services (NSEI: TCS). These are leaders in IT services, financials, and business outsourcing.

Overall, this ETF allows Australian investors to tap into India’s growth without needing to pick individual stocks or navigate the complexities of investing directly in the country. It was also recently recommended by analysts at Betashares.

The post 3 excellent ASX ETFs to buy with $3,000 in December 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 positions in and has recommended Abb, BetaShares Global Cybersecurity ETF, Cisco Systems, CrowdStrike, Intuitive Surgical, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended HDFC Bank and Palo Alto Networks. The Motley Fool Australia has recommended CrowdStrike and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

BHP Group (ASX: BHP) shares are the talk of the town among investors and analysts alike this week. 

The Australian mining and metals giant’s shares have climbed 1.06% in Wednesday afternoon trading. At the time of writing, the shares are changing hands at $44.77 a piece. That’s a 31% increase from a 3.5-year low in April. The shares are 12.04% higher for the year to date.

The miner’s shares have come under the spotlight recently. Last week, the mining giant made the list as the second most-traded ASX share among CommSec clients. Although a huge 80% of activity was investors selling up the mining giant’s stock, potentially from investors taking their latest gains off the table. 

What’s all the fuss about?

It’s been a big week for BHP.

The copper price hit a new all-time high of US$11,600 per tonne on the London Metal Exchange on Monday, bumping up BHP’s valuation. The metal has now gained more than 30% since the start of the year, comfortably outpacing the broader market.

Copper is a central material for the global energy transition, with significant use in electric vehicles and associated charging infrastructure. It is also a critical component in AI data centres thanks to its conductivity and efficiency in power distribution and cooling. And as the world’s largest copper producer, BHP’s share price and company strength are very closely tied to the metal’s price fluctuations.

In other news, the mining giant has struck up a new US$2 billion infrastructure agreement tied to its Western Australia Iron Ore (WAIO) operations.

According to the miner’s release yesterday, BHP has entered into a binding deal with Global Infrastructure Partners (GIP), an investment group owned by BlackRock, the world’s largest asset manager, which handles more than $12.5 trillion in assets.

Under the arrangement, a new trust will be set up, with BHP owning and controlling 51% and GIP holding the remaining 49%. The project is due for completion by the end of FY26, subject to approvals.

Management stated that the proceeds from the agreement will be evaluated and deployed in accordance with BHP’s capital allocation framework. 

What’s next for BHP shares?

Analysts are relatively uncertain about the outlook for BHP shares. Data shows that out of 19 analysts, 12 have a hold rating on the mining giant’s stock. Another 6 have a buy or strong buy rating, while 1 analyst has a strong sell rating.

The average target price for BHP shares is $44.94, although some think it could rise to as high as $47.80 over the next 12 months. At the time of writing, this implies a potential upside of up to 6.87%.

The post Why is everyone talking about BHP shares this week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended BlackRock. 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.

Lotus Resources Ltd (ASX: LOT) shares could be a great way to gain exposure to uranium.

That’s the view of analysts at Macquarie Group Ltd (ASX: MQG), which are bullish on the uranium developer.

What is the broker saying?

Macquarie notes that Lotus Resources has been battling sulfuric acid supply issues, which is slowing the ramp up of the Kayelekera operation.

However, it was pleased to see that the company’s acid plant is making good progress and will be onstream soon. It said:

LOT has experienced sulfuric acid supply issues from its Zambian supplier, which appears to be due to lower Zambia & Congo copper production, truck shortages and we expect also an element of demand pull from the gold sector. LOT now has a second supplier out of South Africa (10 days’ drive) to supplement its Zambia contract (5 days’ drive) which should help to stabilise its acid supply chain, however in any event LOT’s relocated Kayelekera acid plant (now relocated to better ground) has made good progress and is due to onstream in February.

As a result of the above, Macquarie has pushed back its export expectations. It adds:

Given the slower ramp in December quarter (acid issues) and the time still required for product accreditation (by western converters), we push back first export to the June quarter 2026 (Apr-Jun) for modelling purposes. We acknowledge LOT may be able to enter into commercial arrangements (eg. physical swaps or loans) to bring this forward but at this stage we don’t factor this in.

Should you buy this ASX uranium stock?

Macquarie remains positive on the uranium developer despite this little hiccup, noting that it doesn’t materially impact its investment case.

According to the note, the broker has retained its outperform rating and 28 cents price target on Lotus Resources shares.

Based on its current share price of 17.2 cents, this implies potential upside of almost 65% for investors over the next 12 months.

Commenting on its outperform rating, Macquarie said:

Outperform. Delays to first sales at Kayelekera now validates LOT’s decision to raise additional equity in September, in our view. Given the additional capital was already raised, the cut to production ramp doesn’t materially alter the investment case.

Valuation: Our SOTP-based TP is overall unchanged. Catalysts: Uranium prices, Kayelekera offtake contracts, Kayelekera first shipment (late CY25), Letlhakane PFS (2HCY26).

The post Macquarie says this ASX uranium stock can rocket 65% in 2026 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Income investors who bought Woolworths Group Ltd (ASX: WOW) shares for their dividend income potential in recent years might be feeling a little jaded today.

On paper, Woolworths has everything an income investor looks for. It is a defensive stock in the consumer staples sector of the economy. It is a large, mature blue-chip share that has a clear market lead in the grocery space.

As such, Woolworths should have a durable earnings base from which to fund stable shareholder payouts.

Well, Woolworths’ dividends have been anything but stable in recent years. To illustrate, the company forked out an annual total of $1.08 in dividends per share over 2021. In 2022, that fell to 92 cents per share, only to come back up to $1.04 per share in 2023. 2024 continued that $1.04 per share in income, with investors also getting a 40 cents per share special dividend.

However, rather than reflecting positive developments with the underlying Woolworths business, this dividend was funded by the sale of the company’s remaining stake in Endeavour Group Ltd (ASX: EDV).

But today, in late 2025, shareholder patience might be running a little thin. This year saw a notable reduction in the dividend income enjoyed from Woolworths shares. The company paid out an interim dividend in April worth 39 cents per share. September saw a final dividend of 45 cents per share doled out. That puts this company’s full-year payouts for 2025 at just 84 cents per share.

That’s the lowest annual Woolworths dividend investors have bagged since the COVID-ravaged 2020.

So what’s going on here?

What’s up with the 2025 Woolworths dividend?

Well, sadly, 2025’s paltry payouts were a direct consequence of the trouble Woolworths finds itself in right now. The company has had one of the toughest years in its long history this year.

The departure of its old CEO, Bradford Banducci, in late 2024 got things off to a bad start already. Banducci had a less-than-glorious exit involving an interview walkout.

But Woolworths has had to deal with a series of missteps, as well as quarter after quarter showing the company losing market share to rivals. Particularly, Coles Group Ltd (ASX: COL).

This was evident in the company’s full-year results. Back in August, Woolworths reported the lowest net profit after tax the company has brought in for at least five years. The net profit of $1.385 billion was down 17.1% from FY2024’s $1.71 billion. Group earnings also declined significantly, dropping 12.6% from $3.22 billion in FY2024 to $2.75 billion in FY2025.

Earnings per share tanked by 17.1% to $1.135.

The company blamed this fall in earnings and profits for its 2025 dividend cut:

The Board declared a final dividend of 45 cents per share, bringing the total full year dividend to 84 cents per share, with the reduction on the prior year reflecting the decline in earnings per share.

So that’s what’s up with the Woolworths dividend. A company can only pay out what it gets in. And when what it gets is falling, the dividends are often the first thing on the chopping block.

For Woolworths to start increasing its dividends, it will first need to see its earnings and profits return to growth. No doubt shareholders will be hoping they do in 2026, but let’s see what happens.

At the current Woolworths share price of $29.24, this ASX 200 blue chip has a trailing dividend yield of 2.87%.

The post What’s going on with the Woolworths dividend? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Endeavour Group. 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.

Many of Australia’s top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.

Three ASX shares that brokers have named as buys this week are listed below. Here’s why their analysts are feeling bullish on them right now:

CAR Group Limited (ASX: CAR)

According to a note out of Bell Potter, its analysts have retained their buy rating and $42.20 price target on this auto listings company’s shares. It notes that the CAR Group share price has been caught up in tech sector volatility recently, dragging it down to an attractive level. Bell Potter highlights that its shares trade at a significant discount to fellow ASX-listed classifieds platforms. Outside this, it likes the carsales.com.au owner due to its ability to generate cash flows that support growth investments and shareholder returns simultaneously. The CAR Group share price is trading at $31.89 on Wednesday afternoon.

Coles Group Ltd (ASX: COL)

A note out of Macquarie reveals that its analysts have retained their outperform rating and $26.10 price target on this supermarket giant’s shares. The broker has been out visiting Coles’ food manufacturing facilities. It notes that the company has the capacity to manufacture 970 tonnes of cooked products and 1.5 million meals a week. Coles has called out ready-made meals as a key growth area in the future. Speaking of growth, Macquarie believes that its supply chain investment, operational execution, and market share gains will help support an earnings per share compound annual growth rate of 10% over the next three years. The Coles share price is fetching $21.76 at the time of writing.

Megaport Ltd (ASX: MP1)

Another note out of Macquarie reveals that its analysts have retained their outperform rating on this network solutions company’s shares with an improved price target of $21.70. Macquarie notes that the recent acquisition of Latitude expands the immediate addressable share of customer wallet. It points out that customers already consume compute products, but Megaport has not historically sold compute. Latitude’s product offering is highly complementary to the existing product set and offers a direct position in a large and fast-growing end market. Stripe, Mercado Livre, and Grok are new customer wins. It estimates that Bare Metal as a Service (BMaaS) is a large, end market currently worth US$15 billion, but growing rapidly. Combined with the stabilisation of core revenue, Macquarie believes Megaport is well-placed for long term growth. The Megaport share price is trading at $13.62 today.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Megaport. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended CAR Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Megaport Ltd (ASX: MP1) shares are 1.58% higher in lunchtime trade on Wednesday. At the time of writing, the shares are changing hands for $13.50 a piece. 

The software-defined network (SDN) service provider’s shares are 23.8% lower than their 3.5-year peak early last month. But they’re still up an impressive 81.4% for the year to date.

Megaport completed an institutional placement in mid-November, just a day after it revealed that it was raising $220 million to fund the acquisition of Latitude.sh for US$150 million in cash and scrip. 

The company has suffered amid the tech-sector-wide investor sell-off, but analysts are still bullish on the outlook for the stock over the next 12 months.

In a new note to investors, analysts at Macquarie Group Ltd (ASX: MQG) have revealed their latest expectations for the shares.

Huge upside ahead for Megaport shares

In its note, the broker has confirmed its outperform rating on Megaport shares. Its analysts have also hiked its 12-month target price up to $21.70, up from $18.50 previously.

At the time of writing, this implies a huge potential 60.7% upside for investors over the next 12 months.

Last month, Megaport said it had acquired Latitude.sh, a global Compute as a Service platform. 

Macquarie said it has revised its EPS earnings and EBITDA number to incorporate Latitude numbers. The broker said its increased target price reflects these EPS earnings changes.

“We revise FY26/27/28/29E EPS by n.m/n.m/+212%/+163%. The law of small numbers is at play, with EBITDA changes more meaningful at +9%/+101%/+106%/+108%. With the $200m placement now complete, our earnings changes reflect the incorporation of Latitude numbers. We assume the initial A$132m capex is spread over FY26 & FY27, with further growth reinvestment presenting downside to these numbers,” the broker said in its note.

“Top line is stabilised, Latitude adds a new growth driver in a fast-growing end market. Reinvestment in growth will drive further top-line acceleration out of FY26. Product roadmap suggests MP1 will move more into software with edge compute, driving higher long-term margins. Retain Outperform,” the broker added.

What else did the broker have to say?

While customers already consume compute products, Megaport has not historically offered compute solutions. This means Latitude’s product is highly complementary to Megaport’s existing offerings and provides a direct entry into a large, fast-growing end market. Early traction is evident with new customer wins, including Stripe, Mercado Livre, and Grok. Latitude also strengthens exposure to blockchain applications.

Macquarie also commented that Latitude CPU (central processing units) are strong. All Latitude SKUs are expected to achieve positive internal rates of return within the first one to two years, even after factoring in a 3–6 month ramp period.

“Industry conversations confirm CPU useful lives are 6-7 years, with examples of operation beyond this time. We understand Latitude currently assumes an accounting useful life of 5 years, slightly longer than a tax useful life of 4 years. This leads to a minor tax shield on CPU capex,” the broker said.

The post Megaport shares tipped to jump another 60%: Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Megaport. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.