Category: Stock Market

If you are wanting exposure to the beaten down tech sector, then it could be worth looking at the ASX tech stock in this article.

That’s because analysts at Bell Potter see potential for its shares to rise strongly from current levels.

Which ASX tech stock?

The stock in question is airports and utilities software provider Gentrack Group Ltd (ASX: GTK).

Bell Potter was pleased with the company’s FY 2025 results, noting that they were largely in line with expectations. It said:

GTK’s FY25 was largely in-line with consensus revenue/EBITDA at $230.2m/$27.8m respectively (-4% vs. BPe EBITDA). Positive pipeline commentary drove a strong share price reaction, which provided improved visibility on near-term project win/growth outlook.

Group revenue grew 8% to $230.2m, in-line with guidance/consensus (- 1% vs. BPe); Utility revenue increased 7% to $193.4m, which was underpinned by 12% recurring revenue growth somewhat offset by a -5% decline in project revenues (reflecting strong pcp); 2H25 was a record half for Utility project revs. Veovo revenue increased +15% to $36.8m on both ARR/NRR growth (+27% ex. Hardware sales)

Another positive for the broker was its outlook commentary. It highlights that the ASX tech stock’s sales pipeline has improved significantly in recent months. Bell Potter adds:

GTK’s pipeline has developed considerably since it’s last update; it is currently a “preferred” vendor at 3 prospects, shortlisted at 3 others, and well placed at 4 others for 2026 counterparty decisions. These opportunities represent ~30m meter points in total; winning 3-4 would set up strong FY27 growth according to GTK. EPS changes in following the result are -1%/+2%/+8% through FY26e-28e respectively on a broad mix of mix shift across segments and increased amortisation.

Time to buy

According to the note, the broker has responded to the update by reiterating its buy rating with an improved price target of $11.00 (from $9.80).

Based on its current share price of $8.49, this implies potential upside of almost 30% for investors from current levels.

Commenting on its buy recommendation, Bell Potter said:

Our TP rebounds to A$11.00 on roll fwd of DCF and earnings upgrades following pipeline commentary which has provided greater visibility on potential project revenue growth as well as go-live proof-points for GTK to reference in g2.0 discussions. A positive growth outlook for GTK is underpinned by rapidly shifting energy consumption and production trends, driving increased complexity in energy grids which is meeting technical debt within legacy billing platforms.

The post Buy this ASX tech stock before it’s too late: Bell Potter appeared first on The Motley Fool Australia.

More reading

• Why Gentrack, IPD, SRG, and Web Travel shares are racing higher today
• Why Gentrack, Monash IVF, Pro Medicus, and Qube shares are racing higher today
• Why is this ASX 300 tech stock rocketing 21% today?
• Why Gentrack, Kogan, Webjet, and WiseTech shares are pushing higher today
• Guess which ASX tech stock is tipped to rise 50%+

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 Gentrack Group. The Motley Fool Australia has positions in and has recommended Gentrack Group. 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 has been busy looking at a number of ASX 200 shares following recent update.

Two that have fared well and have been upgraded by the broker are named below. Here’s what it is saying about them:

Lovisa Holdings Ltd (ASX: LOV)

The first ASX 200 share to get an upgrade from Morgans is fashion jewellery retailer Lovisa.

While the company’s trading update was a touch softer than it was expecting, it acknowledges that its sales growth has been very strong so far in FY 2026. Especially in such a tough economic environment.

So, with its shares taking a tumble, the broker has upgraded them to a buy rating with a trimmed price target of $40.00. Based on its current share price, this suggests that upside of approximately 30% is possible.

Commenting on its recommendation, Morgans said:

LOV provided a trading update for the first 20 weeks of FY26 which was slightly below expectations. LFL sales have slowed in the last 12 weeks and store rollout was a little bit slower than expectations, but total sales growth remains strong (over 20%). We see very few Australian retailers able to deliver +20% sales growth in light of the ongoing challenging retail trading conditions. Given the share price weakness, we have upgraded to a BUY from an ACCUMULATE.

We see this as a great opportunity to buy this high quality retailer with a global store rollout opportunity trading back around its average 10-year 1-year forward PE multiple (~31x), offering ~20% EPS growth CAGR over the next 3 years. We have lowered our price target to $40 (from $44.50) driven by moving back to 50/50 weighting EV/EBIT and DCF valuation.

Megaport Ltd (ASX: MP1)

Morgans was pleased with this network-as-a-service provider’s performance so far in FY 2026, highlighting that its net revenue retention (NRR) and annual recurring revenue (ARR) have grown strongly since the end of the last financial year.

In addition, it has updated its forecasts to reflect the acquisition of Latitude.sh and its network expansion into the India market.

This has led to Morgans upgrading its shares to a buy rating with a $17.00 price target. This implies potential upside of 22% for investors over the next 12 months.

Commenting on its upgrade, the broker said:

We update our forecasts to include MP1 recent capital raising, acquisition of “Compute-as-a-Service” provider Latitude.sh and network expansion into India. The acquisitions accelerate revenue and EBITDA growth while the core MP1 business keeps improving. Since June 2025 NRR (net revenue retention) has lifted 2 ppts to 109%. Revenue and ARR (annual recurring revenue) growth is strong. We upgrade to a BUY recommendation and our target price moves to $17.

The post Morgans just upgraded these ASX 200 shares appeared first on The Motley Fool Australia.

More reading

• Lovisa vs Kogan – Which consumer discretionary stock does Bell Potter prefer?
• 3 ASX shares that I think are buys for both growth and dividends
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Leading brokers name 3 ASX shares to buy today

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

Felix Gold Ltd (ASX: FXG) has become one of the ASX’s standout performers over the past twelve months.

Shares in this mineral explorer have ballooned by nearly 500% in just one year, climbing to $0.41 per share at the time of writing.

Not surprisingly, this surge has outperformed the broader market handsomely, with the All Ordinaries Index (ASX: XAO) rising by 1.64% during the same period.

This rally has been fuelled by progress at the group’s Treasure Creek antimony and gold project in Alaska.

In essence, this ASX mining stock has been reporting a swathe of rich antimony intercepts from exploration drilling.

These outcomes could pave the way for Felix to become the first antimony producer in the US in more than three decades.

Strategic mineral

Antimony is traditionally used in flame-retardant materials and several other products, like lead storage batteries, munitions, and ceramics.

However, it is also utilised in various modern-day technologies such as solar panels.

Supply of antimony is heavily concentrated, with about 95% of global output coming from China, Russia, and Tajikistan.

And late last year, China implemented a total ban on antimony exports to the US.

This geopolitical setting could create a strategic opportunity for Felix.

More specifically, the antimony from Treasure Creek could potentially become a supply source for the US market.

However, the project also holds a sizeable 831,000-ounce gold resource.

And an extensive drilling campaign just delivered further significant gold hits.

What happened?

Felix recently completed more than 120 drill holes at Treasure Creek, with results from 10 holes announced this morning revealing shallow and high-grade gold intercepts.

One hole returned a 13.75 metre interval grading 7.69 grams per tonne gold, including a richer 4.89m zone grading 20.42 g/t gold.

Another hole served up a broad 47.25m intercept at 1.08 g/t gold.

Management noted that the gold mineralisation is strongly linked to structures that also host high-grade antimony, with the gold shaping a broader halo around the antimony.

Felix Gold Executive Director, Joe Webb, commented:

The geology is particularly encouraging. We’re seeing high-grade gold within the same structures that host our antimony mineralisation, with gold forming broader halos around these zones. The 13.75m @ 7.69 g/t intersection in hole 001, including 4.89m @ 20.42 g/t, demonstrates the grade potential within these weathered breccia structures.

What next for this ASX mining stock?

Treasure Creek sits within the Fairbanks mining district of Alaska.

This prolific geological region is renowned for producing over 16 million ounces of gold historically.

And Felix is the largest landholder in this infrastructure-rich district.

The ASX mining stock now plans to incorporate the gold and antimony results from 2025 into an expanded resource database.

Samples from the recently concluded drilling program have been submitted to the lab for multi-element analysis, including antimony.

Gold results from 113 drill holes also remain pending.

The post This ASX mining stock has soared 479% in just one year and high-grade gold hits are now flowing in appeared first on The Motley Fool Australia.

More reading

• Buy this ASX tech stock before it’s too late: Bell Potter
• Morgans just upgraded these ASX 200 shares
• Buy, hold, sell: Sigma Healthcare, CSL, and Lynas shares
• 2 Australian dividend giants that I think belong in every portfolio
• Down 21% in 30 days, this top ASX 200 stock now looks on sale to me

Motley Fool contributor Bart Bogacz 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.

If you have space in your portfolio for some new additions, it could be worth hearing what analysts are saying about the ASX shares in this article, courtesy of The Bull.

Let’s see if they are buys, holds, or sells right now:

CSL Ltd (ASX: CSL)

The team at MPC Markets rates this biotechnology giant as a hold despite its significant pullback. However, it thinks investors should be keeping a close eye on CSL’s progress as it does have a strong track record. It explains:

Uncertainty continues to surround this biopharmaceutical giant after the share price plunged following its 2025 results. It recently cut revenue and profit growth forecasts for fiscal year 2026. Its Seqirus influenza vaccines division is under pressure from a decline in vaccination rates in the US. However, plans to reduce fixed costs and enhance efficiencies were initially earmarked to save more than $500 million by fiscal year 2028.

The company is undertaking a buy-back program of up to $750 million in fiscal year 2026. CSL shares have fallen from $271.32 on August 18 to trade at $178.82 on November 19. At these levels, we suggest holding CSL and monitor performance of a company that has a solid track record of performance over the longer term.

Lynas Rare Earths Ltd (ASX: LYC)

Over at Ord Minnett, its analysts think this rare earths producer’s shares are expensive and that investors should be hitting the sell button. They said:

Lynas is the only significant producer of separated rare earths materials outside of China. Gross sales revenue of $200.2 million in the first quarter of fiscal year 2026 was up on the prior quarter and the prior corresponding period, but missed consensus. The shares have fallen from $21.64 on October 15 to trade at $15.51 on November 19. In our view, the shares remain overvalued, so investors may want to consider cashing in some gains.

Sigma Healthcare Ltd (ASX: SIG)

One ASX share that Ord Minnett is positive on its Sigma Healthcare. It has put a buy rating on the Chemist Warehouse owner’s shares.

The broker is very positive on the company’s outlook due to its international expansion and private label strategy. It explains:

The healthcare giant reported normalised earnings before interest and tax of $834.5 million in fiscal year 2025, up 41.4 per cent on the prior corresponding period. Beyond the strong earnings, SIG’s result was underpinned by operating cashflow of $599 million, better than expected net debt of $752 million and a positive outlook. SIG has started strongly in fiscal year 2026, with Chemist Warehouse posting double-digit network sales growth and an upgraded synergies target. Furthermore, we continue to expect upside via the international rollout and private label strategies.

The post Buy, hold, sell: Sigma Healthcare, CSL, and Lynas shares appeared first on The Motley Fool Australia.

More reading

• Leading analysts name 3 ASX 200 titans to buy today
• Analysts name 3 ASX shares to sell now
• Top 10 most-traded ASX shares last week
• What’s going on with Lynas Rare Earths shares today?
• Is the 2025 ASX share selloff your chance to buy generational bargains?

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. 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.

Australian dividend shares are a great way for investors to earn a reliable passive income. Here are two dividend giants that I think belong in every Aussie portfolio.

Washington H. Soul Pattinson & Co Ltd (ASX: SOL)

Soul Patts is frequently referred to as Australian dividend royalty. It’s easy to see why, too. 

The company has the longest streak of annual dividend increases on the index. It has also increased its dividend payout for its shareholders every year since 1998. 

The best part is that Soul Patts is an investment house that holds a diverse portfolio of investments across listed equities, private equity, property, and loans. While its origins were in pharmacies, the company now has a very broad portfolio across multiple sectors. 

It gives its investors exposure to assets across a range of industries, including natural resources, building materials, telecommunications, retail, agriculture, property equity, and corporate advisory. It is invested in a number of well-known ASX shares such as TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC), and Brickworks Limited (ASX: BKW). This means the dividend share is able to generate cash flow from a variety of sources. 

It’s this defensive quality and consistent dividend growth that make it a fantastic option for income-seeking investors. 

There’s no forecast for what the Soul Patts dividend is expected to climb to in FY26, but the company expects growth to continue going forward. In FY25, the company paid a total $1.03 per share, 100% fully franked. 

At the time of writing on Tuesday afternoon, the Soul Patts share price is 1.21% higher for the day at $37.51 a piece. Over the year, the shares have climbed 6.99%.

BHP Group (ASX: BHP)

Mining giant and ASX 200 heavyweight BHP is another must for any savvy investor’s portfolio. 

The mining and metals giant is a diversified natural resources company that is among the world’s top producers of major commodities, including iron ore, copper, and metallurgical coal. The company is headquartered in Melbourne and is one of the largest and most-established companies on the ASX with a strong balance sheet and low debt, even during volatile markets.

In FY25, BHP paid an interim dividend of 79.1 cents per share on 27 March and a final dividend of 91.9 cents per share on 25 September, both fully franked. That brings the full-year passive income payout to $1.71 a share. 

Unfortunately, in FY25, BHP’s dividend payouts were lower than what investors received in FY24. This was mostly due to shifts in commodity prices throughout the 12-month period. But the miner continues to be a great provider of passive income. 

UBS has forecast BHP will pay its shareholders US$1.09 per share in FY26, with a potential dividend yield of 5.7%, including franking credits. 

But Macquarie is forecasting that the miner’s dividend will be a little lower in FY26, at around US$1.05 fully franked. This is due to an expected decline in the company’s EBITDA earnings for the year, reflecting softer commodity prices.

At the time of writing, BHP shares are 0.76% higher for the day at $40.93 a piece. Over the year, the shares are trading 1.82% higher.

The post 2 Australian dividend giants that I think belong in every portfolio appeared first on The Motley Fool Australia.

More reading

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• What is Ord Minnetts’ view on Virgin Australia and BHP shares?
• Buy Telstra and these ASX dividend shares for passive income
• Revealed: BHP and 4 other ASX 200 mining stocks rank among top global copper producers
• Why is the BHP share price lifting today?

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 Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Macquarie Group and Washington H. Soul Pattinson and Company Limited. 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.

It has been a tough time for TechnologyOne Ltd (ASX: TNE) shares.

Over the past 30 days, the ASX 200 stock has lost 21% of its value.

Why have its shares been sold off?

Investors have been selling the enterprise software company’s shares this month following the release of its full year results.

Interestingly, TechnologyOne’s shares tumbled despite it outperforming its guidance, announcing a special dividend, and reiterating its 2030 $1 billion+ annualised recurring revenue (ARR) target.

Not even bullish comments from its CEO, Ed Chung, could stop the selling. He said:

iPhones changed the market for mobile phones, Tesla changed the market for vehicles, UBER changed the market for how to catch a cab and now that we have Ai and SaaS+, TechnologyOne is changing the market for ERP and unlocking value for our customers.

Is this a buying opportunity?

This looks like one of the best buying opportunities for this ASX 200 stock in a long time. Especially given management’s confidence that it can double in size every five years.

But I’m not alone in seeing this as an opportunity. A number of brokers have recently upgraded its shares in response to their sizeable decline.

For example, analysts at Morgan Stanley have upgraded its shares to an overweight rating with a $36.50 price target. This implies potential upside of 20% from current levels.

Elsewhere, UBS has put a buy rating and $38.70 price target on them, which suggests that upside of approximately 27% is possible between now and this time next year.

And over at Morgans, its analysts have upgraded its shares to an accumulate rating with a $34.50 price target. This is 13% above its current share price.

Commenting on its upgrade, the broker said:

TNE’s FY25 result was largely in line with our expectations with the group delivering, PBT growth of +19% to $181.5m ahead of its 13-17% guidance range, and in line with consensus. The negative share price reaction appears to have been driven by softer than expected ARR/NRR print, which saw a 2% miss to ARR growth expectations vs consensus, despite this, the group continues to deliver, with ARR of $554.6m (+18% YoY), which along with its NRR growth of 115% continues to see TNE Ontrack to achieve its long-term ARR growth aspirations.

We modestly pare our EPS forecasts by 1-3% in FY26-28F. and move to an ACCUMULATE rating, with our target price $34.50 now reflecting a TSR of +19% following TNE’s post result share price movement.

The post Down 21% in 30 days, this top ASX 200 stock now looks on sale to me appeared first on The Motley Fool Australia.

More reading

• Is the 2025 ASX share selloff your chance to buy generational bargains?
• Buy, hold, sell: James Hardie, Reece, and TechnologyOne shares
• Top brokers name 3 ASX shares to buy next week
• How to make $50,000 of passive income a year from ASX shares
• Why are ASX 200 tech stocks getting smashed on Friday?

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

Liontown Resources Ltd (ASX: LTR) shares are 2.69% higher in Tuesday afternoon trade. At the time of writing, the shares are changing hands for $1.41 a piece. This means the lithium stock’s shares are now 16.7% higher over the past month. They’re now up a whopping 147.72% for the year to date.

Liontown Resources is a mineral exploration and development company focused on the development of high-quality lithium and tantalum projects in Western Australia (WA). The company controls 100% of the lithium rights to two prospective projects in WA, Kathleen Valley and Buldania.

Its flagship Kathleen Valley project is described as “one of the world’s largest and highest-grade hard rock lithium deposits”.

Why has the lithium stock’s share price rocketed higher this year?

ASX lithium shares have outperformed the market this year. This is because soaring demand for lithium to power batteries and new infrastructure continued to increase. For example, demand for electric vehicles, which are by far the biggest consumers of lithium, is growing faster than carmakers can keep up. And grid-scale energy storage to stabilise renewable energy is also a fast-growing source of demand. 

Meanwhile, Liontown Resources also ramped up its output at its Kathleen Valley project during 2025. This gave the company the ability to capture a lot of the demand. Commercial production was declared on 1st January this year, and by the end of FY25, the company had produced over 300,000 wet metric tonnes of spodumene concentrate. 

There are reports this week that Liontown Resources held its first digital auction for 10000 wet metric tonnes of spodumene concentrate. The company secured a bid of US$1254/dmt.

The lithium producer was one of the top 10 most-traded ASX shares last week.

What’s next for Liontown Resources?

While the rally for lithium demand has exploded this year, concerns have arisen that the company’s shares may have now peaked.

TradingView data shows that analyst sentiment is still divided. Out of 12 analysts, 6 have a sell or strong sell on the lithium stock. Another 4 have a hold rating, and 2 have a strong buy rating.

The average 12-month target price for Liontown Resources is $0.965 per share, which implies a potential 31.7% downside for the shares, at the time of writing.

The team at Macquarie have an underperform rating on Liontown Resources shares, and a $0.65 12-month target price. This implies a potential 53.9% decrease at the time of writing.

Bell Potter is much more bullish on Liontown Resources shares. The broker has a buy rating and $1.52 target price on the stock, which implies a potential 7.8% upside at the time of writing.

The post Liontown Resources shares up 147% this year: What’s next for this lithium stock? appeared first on The Motley Fool Australia.

More reading

• Top 10 most-traded ASX shares last week
• Why are shares in Aussie lithium producers being sold off today?
• Here are the top 10 ASX 200 shares today
• 2 ASX 200 mining stocks smashing new 52-week highs on Thursday
• Here are the top 10 ASX 200 shares today

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. 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.

Australia Foundation Investment Co Ltd (ASX: AFI), or AFIC for short, shares have long been a popular choice on the ASX for investors seeking hands-off, conservative investing and a reliable stream of dividend income.

As a listed investment company (LIC), AFIC owns and manages a portfolio of underlying investments on behalf of its shareholders. In this company’s case, this portfolio mostly consists of a diversified pool of ASX blue-chip dividend shares. AFIC runs a much smaller international stock portfolio as well.

Some of its largest current portfolio holdings include BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), CSL Ltd (ASX: CSL), and Macquarie Group Ltd (ASX: MQG).

Some of its international stocks include Netflix, Spotify, Mastercard, and Alphabet.

As this portfolio is entirely managed by AFIC’s management, many investors enjoy being able to pass off the tough work of stock picking themselves to AFIC and simply keep its shares in the proverbial bottom drawer.

The company has a long track record of delivering reliable returns to its investors. AFIC has been around for almost 100 years, since 1928 to be precise. Over the ten years to 31 October, it has delivered a total shareholder return of 8.2% per annum. That figure includes share price growth as well as dividend and franking credit returns.

As we touched on above, AFIC shares have also proven to be a dependable source of passive dividend income. Shareholders haven’t seen a year-to-year dividend cut in more than three decades.

Just this morning, AFIC gave its shareholders some good news on that front.

AFIC shares: Two special dividends for 2026 revealed

In an ASX announcement, the LIC revealed that AFIC shareholders can expect a special dividend to accompany the next two dividends that will be paid out. That would be the interim dividend that will be revealed on 21 January 2026, as well as the final dividend to be declared on 27 July. Both of these special dividends will be worth 2.5 cents per share and will come with full franking credits attached.

Obviously, we don’t yet know how much the ordinary dividends that will come alongside these special payouts will be worth yet. Over 2025, AFIC’s interim dividend came in at 12 cents per share, while the final dividend was worth 14.5 cents per share. The latter was also accompanied by a 5-cent per share special dividend. All three 2025 payments came fully franked.

Here’s how the company explained the reasoning behind next year’s special dividends:

The Board recognises that AFIC has built up a substantial balance of franking credits over recent years, particularly through the generation of realised capital gains. These franking credits are valuable to our shareholders, and the Board has considered the most appropriate means of distributing some of this balance without compromising the underlying ordinary dividends going forward.

No doubt owners of AFIC shares will welcome this news today. At the current price of $7.13, this LIC is trading on a trailing dividend yield of 3.72%.

The post Own AFIC shares? There’s a double special dividend coming your way appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Alphabet, CSL, Mastercard, National Australia Bank, and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, CSL, Macquarie Group, Mastercard, Netflix, and Spotify Technology. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Alphabet, BHP Group, CSL, Mastercard, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investing in the US Magnificent 7 stocks is an obvious way to gain exposure to the global artificial intelligence (AI) megatrend.

To recap, the Mag 7 shares are Nvidia Corp (NASDAQ: NVDA), Apple Inc (NASDAQ: AAPL), Microsoft Corp (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc Class A (NASDAQ: GOOGL), Alphabet Inc Class C (NASDAQ: GOOG),  Meta Platforms Inc (NASDAQ: META), and Tesla Inc (NASDAQ: TSLA).

Betashares investment strategist, Hugh Lam, says the Mag 7 stocks have delivered exceptional returns for investors since AI became a dominant market theme following the launch of ChatGPT in November 2022.

Since then, the S&P 500 Index (SP: INX) has gained 70% in value, with the Mag 7 responsible for more than half that, Lam said.

However, there are other options for investors who think the Mag 7 stocks are now overvalued.

Let’s find out more.

AI investment goes beyond the Mag 7 stocks

In an article, Lam said AI was here to stay, and there were many companies besides the Mag 7 set to benefit.

Lam commented:

From its potential to enable long-term productivity gains to becoming a geopolitical bargaining chip among the world’s economic powerhouses, the market’s fervour for AI looks here to stay.

However, the investment opportunity set is now broader than the Mag 7, with many other firms likely to thrive as AI technologies proliferate and data centre capacity grows.

Lam points out that the Mag 7 are critical in the AI infrastructure build-out, whilst other companies are using AI to enhance their services.

Examples include Palantir Technologies Inc (NASDAQ: PLTR), a US-based AI and defence software company specialising in data analytics for government and defence industry customers.

The Palantir share price has rocketed 115% in 2025 amid its software systems being adopted in US military operations and businesses such as Walmart Inc (NYSE: WMT) and Airbus SE (ETR: AIR).

Cybersecurity and robotics

Lam said the benefits of AI are now being seen in adjacent sectors to information technology, such as cybersecurity and robotics.

The investment strategist said:

… AI is reshaping the cybersecurity industry, particularly as geopolitical tensions continue to simmer and national self-sufficiency needs rise.

Against this backdrop, governments, businesses and individuals are all becoming more proactive in protecting their data.

Global cybersecurity spending is expected to see sustained growth of double-digit rates, reaching US$377 billion by 2028, according to the International Data Corporation.

This amount is not only large but also highly defensible in nature, with Chief Information Officers surveyed by Morgan Stanley viewing security as the category least likely to get cut in an economic downturn.

Lam says robotics has become a key theme in 2025, describing it as Nvidia’s next biggest market for potential growth.

While still in its infancy, Betashares sees robotics becoming a bigger and more recognised investment exposure over time as developed market economies seek automation as a critical solution to counter structural macro issues including labour shortages and falling population growth rates.

The post How to invest in AI outside the Magnificent 7 stocks appeared first on The Motley Fool Australia.

More reading

• Is Palantir’s deal with Nvidia a game changer?
• Palantir stock vs. Alphabet stock: Wall Street says to buy only one
• Does Michael Burry of “The Big Short” fame know something Wall Street doesn’t? He just made a billion-dollar bet against 2 companies driving the AI boom.
• Which US shares are most popular with Aussie investors, and why?

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, Tesla, and Walmart. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) share Reece Ltd (ASX: REH) has been under a lot of strain in 2025.

Australia’s leading plumbing and bathroom supplier has seen its share price tumble from $25.92 per share at the end of November last year to $12.12 at the time of writing.

This equates to a 52% drop in the last 12 months. By comparison, the All Ordinaries Index (ASX: XAO) has climbed by 1.7% in the same period.

Expanding US network

Founded in Australia and now also operating across New Zealand and the US, Reece serves both trade and retail customers. The network of the popular ASX 200 share continues to expand. In the last quarter, it added 18 branches in the US and 14 in Australia and New Zealand.

Reece’s scale gives it a competitive advantage, and over the years, it has built strong margins due to high-frequency trade customers and a broad product range.

Weak housing conditions

However, cracks are appearing. The housing markets are weak in both the US, and Australia and New Zealand, and margins are under pressure from elevated labour costs and inflation.

Reece also faces increasing competition, especially on its home turf with players like Tradelink and JB Hi-Fi Ltd (ASX: JBH), which has entered the market of home fittings.

Better-than-expected sales

The ASX 200 share was one of the big winners on Monday, gaining 12.6%. The share price lifted on Friday’s quarterly update, which was better than expected. After the Tuesday lunch hour, the Reece share price recorded a 2% loss, settling at $12.12.

Reece reported 8% revenue growth to $2.41 billion for 1Q FY26, while EBITDA fell 8% to $222 million. Management warned that soft demand could persist, making short-term earnings recovery uncertain.

Peter Wilson, Chair and CEO, said:

Costs remain elevated driven by network growth, ongoing investment in core capabilities and the impact of labour cost inflation in competitive markets, especially the US. We are still expecting a period of soft activity in both regions.

Long and bumpy recovery

Analysts are broadly cautious and warn that recovery could be long and bumpy.

Morgans rates the ASX 200 share as a hold. The broker applauds the stronger sales in 1Q FY26 but sees ongoing margin pressures from higher costs and tough market conditions in ANZ and the US.

As a result, it has only upgraded Reece shares to a hold rating with a slightly increased price target of $11.25, up from $11.10.

Morgans noted in its recent research:

With a 12-month forecast TSR of 5%, we upgrade our rating to HOLD (from TRIM). While we continue to view REH as a fundamentally strong business with a good culture and a long track record of growth, the operating environment remains challenging, particularly in the US where competitive pressures persist. Trading on 24.2x FY26F PE with a 1.6% yield, we see the stock as fully valued and prefer to wait for signs of market improvement before reassessing our view.

The post Can this ASX 200 share bounce back after crashing 52% this year? appeared first on The Motley Fool Australia.

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• Reece 1Q FY26: Revenue growth, profit margin pressures, and a $365m buyback
• Macquarie names 16 potential ASX takeover targets

Motley Fool contributor Marc Van Dinther 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.