This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Artificial intelligence (AI) is responsible for adding trillions of dollars in value to a handful of companies over the last few years. Nvidia, for example, briefly touched a $5 trillion market cap this year, thanks to its dominant position in the market for graphics processing units (GPUs). Four other companies sit firmly above the $2 trillion threshold as we approach the new year. 

But three AI stocks currently have similar market caps around $1.6 trillion as of this writing, and are vying to become the first new $2 trillion company of 2026: Meta Platforms (NASDAQ: META), Tesla (NASDAQ: TSLA), and Broadcom (NASDAQ: AVGO). Here’s my prediction for the next company to top the milestone, and it could come as soon as next year. 

Artificial intelligence is fueling all three

Meta, Tesla, and Broadcom have all seen their stock prices heavily influenced by advances in AI this year.

Meta stock climbed higher early in the year as its efforts to improve its recommendation algorithms bore fruit. Ad revenue climbed higher as time spent on its apps increased, and ads became more effective. However, the stock took a step back recently as management shared plans to increase its AI-related spending.

Tesla’s value is heavily tied to its robotaxi service and AI innovations. The stock received a boost over the summer when it launched its robotaxi pilot in Austin, Texas. Investors added to those gains on promising progress on the company’s next-generation AI chip for its vehicles.

Broadcom’s custom AI accelerator business has gained momentum in 2025, as the company signed big contracts with OpenAI and Anthropic, the latter of which is buying Alphabet‘s Broadcom-designed tensor processing units (TPUs). To that end, Alphabet and Broadcom are seeing excellent progress in shifting more developer workloads to TPUs, which offer greater energy efficiency and cost savings versus Nvidia’s GPUs.

Broadcom stock took a step back after its last earnings report, as many analysts were disappointed with management’s expectation that greater AI chip sales would come at a lower gross margin.

While all three of these stocks have a path to a $2 trillion valuation in 2026, I expect Meta Platforms to reach the milestone first. Here’s why.

AI-powered earnings growth at an attractive valuation

Even with its run rate of $200 billion in annual revenue, Meta is still growing its bottom line quickly. Adjusted earnings per share climbed 20% in the third quarter, and improvements in AI are the reason.

Meta has seen an increase in both ad impressions and price per ad for eight straight quarters. That indicates that it’s increasing user engagement and opening new places within its apps for advertising while making ads more effective.

Management attributes a shift in its recommendation algorithm to make it more general across formats as the primary reason users are spending more time on its apps. Meta has seen similar improvements by applying the same methodology to its advertising algorithm. In other words, bigger models have directly translated into more revenue.

That trend should continue in 2026, as Meta opens up more opportunities for advertising, including on Threads and WhatsApp. It could also begin monetizing Meta AI, its generative AI chatbot. The improvements in its algorithms over the last couple of years should enable it to ramp up advertising quickly without as much negative impact on its pricing as we’ve seen in the past.

The bigger opportunity for Meta in 2026, though, may be the expansion of its generative AI features. It’s reportedly working on an AI agent that can manage advertising campaigns for small businesses. CEO Mark Zuckerberg repeatedly talks about the opportunity to handle everything involved with creating, testing, and optimizing ad campaigns on its platform through an AI agent.

And chatbots specializing in sales and customer service for a company could open the door for more businesses to push Facebook and Instagram users to start messaging them through Meta’s chat apps.

With small- and medium-sized businesses accounting for the bulk of advertisers on Meta’s platform, these innovations have the potential to dramatically increase the amount they’re willing to spend on ads. If the overhead for these clients is much lower, they can increase their ad spending and scale up their businesses faster.

Those efforts should fuel another year of strong revenue growth. And while depreciation expense from the increase in AI-related capital expenditures could eat into earnings growth, Meta should be able to manage continued improvements in earnings per share with the help of share repurchases.

The stock trades for just 26 times forward earnings expectations, which is much lower than Broadcom’s multiple and less than one-tenth the multiple Tesla stock trades for. I expect Meta to fetch a higher earnings multiple as it proves its AI spending to be well worth it once again in 2026, pushing its valuation to $2 trillion. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Prediction: This AI stock could be the first new $2 trillion company in 2026 appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Adam Levy has positions in Alphabet and Meta Platforms. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Meta Platforms, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom. The Motley Fool Australia has recommended Alphabet, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Weebit Nano Ltd (ASX: WBT) shares are starting the week with a bang.

In morning trade, the ASX tech stock is up almost 16% to $5.69.

Why is this ASX tech stock rocketing 16%?

Investors have been bidding the semiconductor company’s shares higher today after it made a couple of big announcements.

The first announcement reveals that the ASX tech stock has licensed its resistive random access memory (ReRAM) technology to Texas Instruments Inc. (NASDAQ: TXN). It is a US$160 billion global semiconductor company that designs, manufactures and sells analog and embedded processing chips.

According to the release, under the terms of the agreement, Weebit’s ReRAM technology will be integrated into Texas Instruments’ advanced process nodes for embedded processing semiconductors. The agreement includes intellectual (IP) licensing, technology transfer, design, and qualification of Weebit ReRAM in its process technologies.

Weebit ReRAM is a low-power, cost-effective non-volatile memory (NVM) that has proven excellent retention at high temperatures and has been qualified for AEC-Q100 150°C operation.

Commenting on the news, the ASX tech stock’s CEO, Coby Hanoch, said:

TI is one of the world’s foremost integrated device manufacturers, producing tens of billions of chips every year. This agreement is another strong signal that the industry is moving towards ReRAM as the successor to flash memory in SoC designs. It also reinforces Weebit’s position as the leading independent provider of ReRAM technology.

The company warned that this license agreement is expected to be long-term but its economic materiality is not known at this time. It stated that it views this commercial agreement as strategically important given Texas Instruments’ position in the global semiconductor industry.

Production orders and royalty payments will only commence in the medium term, at Texas Instruments’ discretion.

Texas Instruments’ Senior Vice President of Embedded Processing, Amichai Ron, said:

We are excited to collaborate with Weebit Nano to integrate ReRAM memory technology into our process technologies and products. The TI and Weebit Nano collaboration will enable our customers to get access to industry-leading NVM technology in performance, scale, and reliability which will enable us to enhance our position as a leading embedded processors provider.

Revenue guidance

In a separate announcement, the ASX tech stock revealed its revenue expectations for FY 2026.

It notes that in its annual general meeting presentation in November, it had a revenue goal of up to $10 million.

Following the signing of recent agreements, Weebit Nano now has IP licensing agreements with four fabs, as well as agreements with several product companies.

Based on these agreements, Weebit is now able to scrap this goal and announce revenue guidance for FY 2026 of a minimum of $10 million.

The post Guess which ASX tech stock is rocketing 16% on huge news 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 Texas Instruments. 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 All Ordinaries Index (ASX: XAO) is up 0.1% today, with plenty of help from this surging ASX All Ords share.

The high-flying company in question is Metallium Ltd (ASX: MTM).

Shares in the precious metals recovery company closed on Wednesday trading for 94 cents apiece. In early morning trade on Monday, following the four-day Christmas holiday trading break, shares are trading for $1.02 apiece, up 8.5%.

This sees the Metallium share price up an eye-popping 343.5% over 12 months.

Here’s what’s grabbing ASX investor interest today.

ASX All Ords share surges on milestone achievement

The Metallium share price is leaping higher after the company announced it has commenced commissioning at its Texas Technology Campus (Gator Point).

This follows the successful and safe completion of the first chlorine flash using the ASX All Ords share’s proprietary Flash Joule Heating (FJH) technology. Metallium highlighted that this is “a major step” in de-risking its United States-based critical metals recovery platform.

Commissioning activities were reported to be progressing in parallel with ongoing construction works to support future expansion at Gator Point. Those activities include feedstock preparation and handling circuits; environmental control and gas-scrubbing systems; and process controls and safety systems.

The ASX All Ords shares said that commissioning is aligned with its staged ramp-up strategy toward Stage-1 nameplate capacity of 8,000 tonnes per annum (TPA) of inbound printed circuit board (PCB) E-waste.

The company is targeting Stage-1 throughput by the third quarter of calendar year 2026.

Those operations will be focused on the recovery of gold, copper, silver, and tin from PCB feedstocks. Advanced planning was also reported to be underway for a future gallium/germanium process line, which remains subject to Metallium securing the required feedstock supplies.

What did management say?

Commenting on the successful completion of the first chlorine flash that’s boosting the ASX All Ords share today, Metallium CEO Michael Walshe said, “It confirms that the core FJH process is operating as designed under real operating conditions and marks the formal start of commissioning at Gator Point, exactly as planned.”

Clearly pleased, Walshe added:

Having a three-crucible demonstration line already dry and wet commissioned gives us a powerful platform for ongoing R&D, feedstock qualification and partner engagement while we commission the wider plant. Securing our TCEQ Permit-by Rule provides a key regulatory milestone and enables us to advance commissioning with confidence.

In parallel, we are in advanced negotiations to secure long-term PCB feedstock supply arrangements to support Stage-1 operations. Securing high-quality, contracted feedstock is a critical pillar of our operating strategy as we scale toward 8,000 tonnes per annum of inbound PCB capacity.

The post Up 344% in a year, guess which ASX All Ords share is rocketing again today on big news 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.

Despite the rate-cutting cycle almost certainly coming to an end, Bell Potter says it “remains constructive” on the real estate investment trust sector.

In a note to clients on the broker’s tips for 2026, the Bell Potter team said there were a number of reasons to be positive on the sector, “and expect that macro-driven weakness could be met with valuation support”.

This was because they expected earnings growth to come from a variety of factors, including growth in rental incomes, the potential for debt-funded acquisitions, and stable underlying property fundamentals with occupancy rates strong across most sectors except for offices.

So who do they like in the sector?

Aspen Group (ASX: APZ)

This real estate investor targets the provision of “affordable accommodation” to households with income of less than $100,000, Bell Potter says, adding that it is a “very defensive” market segment.

It went on to say:

The national undersupply equation means that this will remain a crucial pillar of the housing market and will be upheld by robust demand and government subsidy for the foreseeable future.

The Bell Potter team said they see “strong runway ahead” for Aspen, which upgraded its earnings outlook in its first-quarter update, and there was “further risk to the upside” for the remainder of the year.

Aspen is a recent ASX300 inclusion but remains under-owned across the market, and recent inclusion into EPRA NAREIT should underpin additional index/ passive buying.

Bell Potter has a $5.95 price target on Aspen shares compared with $5.57 currently.

Centuria Industrial REIT (ASX: CIP)

Centuria, the Bell Potter team said, is Australia’s largest pure-play industrial real estate investment trust, with $3.9 billion in total assets.

The trust’s portfolio is 85% metro infill, mostly on the eastern seaboard, diversified across 87 assets altogether.

The Bell Potter team went on to say:

The capital transaction market for industrial has improved significantly across calendar year 2025, and indeed, we see strong runway for the sector and in turn valuations into calendar year 2026 with material levels of dry powder capital already raised awaiting deployment.  Centuria provides access to a best in class, scaled, east coast portfolio of industrial property yet trades at a circa 14% discount to net tangible assets.

Bell Potter has a $3.65 price target on the shares compared with $3.37 currently.

Region Group (ASX: RGN)

This company is Australia’s largest landlord of neighbourhood shopping centres, Bell Potter said, with its 100 or so assets providing “highly resilient” income, with about 90% of rent derived from non-discretionary tenants.

The Bell Potter team went on to say:

As a result Region has historically (and likely will continue to) outperformed the market during volatile equity markets – a characteristic we find particularly attractive in the current climate.

The analysts said there were several positive signals in the market, including robust population growth, strong non-discretionary tenant sales, an undersupply of retail floor space, and increased capital appetite for the sector.

They added:

Whilst the immediate catalyst is valuation uplift, we also see a strong case for medium-term rental growth.

Bell Potter has a $2.70 price target on the shares compared with $2.44 currently.

The post Bell Potter favours these three real estate stocks heading into 2026 appeared first on The Motley Fool Australia.

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

Most investors hope 2026 delivers calm markets, steady growth, and rising share prices. And I think there’s a good chance it will.

But history tells us that share market corrections are not a question of if, only when.

Corrections are uncomfortable, unpredictable, and rarely feel safe in the moment. Yet they are also when long-term wealth is often built.

Prices fall, sentiment turns negative, and high-quality ASX shares temporarily trade below what they are really worth.

If that happens in 2026, these are three ASX blue chip shares I would be watching closely.

Cochlear Ltd (ASX: COH)

Hearing solutions leader Cochlear is a blue chip ASX share I would buy if it pulled back meaningfully. It operates in a niche but lucrative global market, has dominant technology, and benefits from powerful long-term trends such as ageing populations and improving access.

When broader markets sell off, Cochlear shares are often dragged down with everything else, despite its long-term outlook remaining intact. While unnerving at the time, a market correction that pushes Cochlear to a more modest valuation could be exactly the sort of opportunity that I think investors should be using to their advantage.

Macquarie Group Ltd (ASX: MQG)

Another blue chip ASX share to buy on a correction could be Macquarie. It is one of Australia’s most resilient financial institutions, with a business model that goes well beyond traditional banking. Its exposure to infrastructure, asset management, and global markets has allowed it to grow earnings through multiple cycles.

While market downturns can temporarily reduce deal activity or asset values, Macquarie has consistently proven its ability to adapt and generate returns over time. In addition, buying Macquarie shares when sentiment is weak has historically rewarded patient investors. Given the quality of its businesses and management team, I expect this trend to continue long into the future.

ResMed Inc (ASX: RMD)

ResMed is another blue chip ASX share where long-term fundamentals matter far more than short-term noise. Sleep apnoea remains vastly underdiagnosed globally, and ResMed continues to invest heavily in technology, data, and connected healthcare solutions.

Corrections are often caused by concerns over short term economic weakness, but demand for ResMed’s products is not cyclical in nature. Sleep apnoea needs treating whatever is happening in the economy.

So, if market volatility were to push ResMed shares materially lower, I think it could present a compelling entry point for investors thinking five or ten years ahead.

The post The ASX blue chip shares I’d buy during the next correction appeared first on The Motley Fool Australia.

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

At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Boss Energy Ltd (ASX: BOE) remains the most shorted ASX share with short interest of 25.93%, which is up week on week. Short sellers have increased their positions after the uranium producer released a very disappointing update on the Honeymoon Project.
• Domino’s Pizza Enterprises Ltd (ASX: DMP) has seen its short interest rise slightly to 17.9%. This pizza chain operator has been struggling in recent years and short sellers don’t appear to believe its performance is going to improve meaningfully in the near term.
• Guzman Y Gomez Ltd (ASX: GYG) has short interest of 13.4%, which is up slightly week on week again. This may have been driven by valuation concerns given the sky-high multiples the burrito seller’s shares trade on.
• Paladin Energy Ltd (ASX: PDN) has short interest of 13.4%, which is up slightly week on week again. Some short sellers appear to be betting against nuclear power adoption and a uranium bull market.
• IDP Education Ltd (ASX: IEL) has 12% of its shares held short, which is up week on week. This language testing and student placement company’s shares have been crushed in the last two years amid concerns over student visa changes.
• Polynovo Ltd (ASX: PNV) has short interest of 11.4%, which is up since last week. This medical device company’s shares are trading on high price-to-earnings multiples. It seems that some investors don’t believe this is justified.
• PWR Holdings Ltd (ASX: PWH) has short interest of 11.2%, which is down since last week. This motorsport products company is going through a transitional period, which is impacting its growth.
• IPH Ltd (ASX: IPH) has seen its short interest remain flat at 11.2%. This intellectual property services provider is battling weak trading conditions, which is weighing on its financial performance.
• Telix Pharmaceuticals Ltd (ASX: TLX) has short interest of 11%, which is down week on week. It has been a tough year for this radiopharmaceuticals company, with delays to FDA approvals and regulatory scrutiny.
• Flight Centre Travel Group Ltd (ASX: FLT) has short interest of 10.8%, which is down week on week again. Short sellers have started to close positions after the travel agent reported a positive start to FY 2026 and a new acquisition.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, PWR Holdings, PolyNovo, and Telix Pharmaceuticals. The Motley Fool Australia has positions in and has recommended PWR Holdings. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Flight Centre Travel Group, IPH Ltd , PolyNovo, and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) is one of those shares that seems to divide investors more than almost any other on the ASX.

On traditional valuation measures, it’s hard to argue the shares look cheap. Many analysts believe CBA is overvalued, especially compared to its major bank peers. Even so, I’m not selling my CBA shares, and I’m comfortable continuing to hold them.

A bank that consistently outperforms

CBA has earned its reputation as Australia’s highest-quality bank. Its scale, technology leadership, and dominant deposit base give it structural advantages that competitors struggle to match.

In a higher interest rate environment, that deposit strength matters. Banks with strong, sticky retail deposits are better positioned to defend margins, even as competition inevitably picks up. While mortgage pricing remains competitive across the sector, CBA has historically shown more discipline than most, prioritising returns over pure volume growth.

That discipline is a big reason the market continues to place a premium on the stock.

Valuation isn’t the only consideration

If I were assessing CBA purely as a new investment today, I’d probably be more cautious. At around $161 per share, expectations are already high, and future returns may be more modest than they’ve been over the past few years.

But as an existing shareholder, the decision to sell isn’t just about valuation. It’s also about what comes next.

Selling shares that have appreciated significantly can trigger a sizeable capital gains tax bill. That’s money that immediately leaves the portfolio and reduces compounding power. Unless I have a clearly superior alternative with a better risk-reward trade-off, I’m reluctant to crystallise gains just for the sake of it.

The dividend looks better than it appears

Another reason I’m happy to keep holding is the dividend.

At today’s share price, CBA’s yield might look relatively modest, particularly for new buyers. But for investors who bought two years ago, when shares were trading closer to $110, the yield on cost is far more appealing.

Add in full franking credits, and that income stream becomes even more attractive on an after-tax basis. For long-term investors who value reliable income, CBA continues to play an important role.

Steady returns in an uncertain environment

I don’t expect CBA to deliver explosive growth from here. But I don’t need it to.

What I value is consistency. CBA generates strong profits, maintains healthy capital levels, and has a proven ability to navigate economic cycles. Even as the banking sector faces margin pressure from competition and slower credit growth, CBA remains well-positioned relative to its peers.

In uncertain markets, there’s something to be said for owning businesses you trust to keep delivering, even if the upside is incremental rather than dramatic.

Foolish Takeaway

Yes, CBA shares look expensive. But they’re expensive because the business has consistently delivered.

Between the quality of the franchise, the tax implications of selling, and the ongoing appeal of fully franked dividends, particularly for long-term holders, I see little reason to rush for the exit. I’m not buying more at current levels, but I’m also not selling.

The post Why I’m not selling my CBA shares in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. 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 insurance stocks sit within the financials sector of the ASX. 

There are 4 insurance stocks that sit above the rest:  

• QBE Insurance Group Ltd (ASX: QBE)
• Suncorp Group Ltd (ASX: SUN)
• Medibank Private Ltd (ASX: MPL)
• Insurance Australia Group Ltd (ASX: IAG)

These are the largest insurance companies listed on the ASX, ranking highest by market capitalisation and collectively serving millions of policyholders across Australia.

What’s the difference?

Although these companies all operate as insurers, they target various parts of the market. 

QBE is a global insurer, focused largely on commercial, specialty, and reinsurance markets across multiple countries.

Suncorp focuses primarily on Australia and New Zealand, offering a broad mix of personal and business insurance alongside banking services.

IAG (Insurance Australia Group) focuses on general insurance, particularly personal and small business insurance, in Australia and New Zealand through well-known local brands.

Medibank is focused on health insurance, primarily serving Australian customers with private health and related services rather than general insurance.

How did they perform in 2025?

After a post-pandemic boom for insurance stocks, 2025 marked a turning point for this sector in terms of stock market performance. 

The worst-performing insurance stock amongst the four has been Suncorp. 

Suncorp shares began the year trading at roughly $22.72 each. 

With just a day left of trading this year, this insurance stock is trading close to $17.70 each. 

This represents a fall of approximately 22%. 

Also suffering a down year are Insurance Australia Group shares. 

This insurance stock has dropped more than 7% in 2025. 

Meanwhile, it was essentially a flat year of returns for QBE shares, which have risen a modest 1% in 2025. 

Finally, the clear winner this year amongst ASX insurance stocks has been Medibank Private shares, which are up almost 26%. 

What are experts tipping for insurance stocks in 2026?

Overall, it appears there is limited upside in the insurance sector moving into the new year. 

Despite their strong year of growth, it appears experts’ views are mixed on Medibank shares in the near future. 

In a note out of Shaw and Partners last week, the broker placed a hold recommendation on this ASX insurance stock. 

Meanwhile, Bell Potter in late November said the insurer holds a dominant presence in the Australian health insurance market, with a 27% market share and 4.2 million members. 

“This scale provides a solid foundation for continued growth, supported by favourable demographics and negotiating leverage with private hospitals,” the broker said.

According to TradingView, analysts view the stock as trading close to fair value, with an average one-year price target of $5.12 (approximately 5% upside). 

IAG shares are also trading close to value based on analyst ratings via TradingView. 

Elsewhere, Suncorp and QBE shares both received sell recommendations from experts (via The Bull). 

The post Which ASX insurance stocks performed best this year? 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.

Gaming is a booming business. The two heavyweight ASX gaming stocks Aristocrat Leisure Ltd (ASX: ALL) and Light & Wonder Inc (ASX: LNW) have a duopoly in the slot machine sector.

As a result, they are well-positioned to take advantage of the growing US market.

Both have pedigree. Both know how to make casinos money. But they’re playing very different games. Let’s have a closer look which of the two ASX gaming stocks looks the better bet.

Aussie pokies king

Aristocrat Leisure, which has a market value of $36 billion, has long been the ASX’s great gaming success story. The pokies king doesn’t just dominate Australian pubs and clubs; it prints money across the US and increasingly online.

Aristocrat’s land-based gaming business is a beast. Flagship titles like Lightning Link and Dragon Link keep players glued and operators happy, driving repeat installs and fat margins.

The company’s US exposure—now its biggest earnings engine—gives it scale, pricing power and resilience when local conditions wobble. Add in a rock-solid balance sheet and prodigious cash generation, and Aristocrat has the firepower to invest, acquire and return capital to shareholders.

But even a house favourite has its blind spots. The ASX gaming stock’s heavy reliance on North America cuts both ways. Regulation is another ever-present risk. Gaming is always one political mood swing away from tighter rules.

And while digital is promising, it’s also fiercely competitive. Finally, expectations are high. Aristocrat trades like a premium business because it is one. But that leaves little room for missteps.

Innovative challenger

Light & Wonder, meanwhile, is the energetic challenger. The ASX gaming stock plays a smart multi-channel game, with innovation and global scale as aces. But rough economic patches or risk-heavy acquisitions could leave the house edge looking a bit thin.

When conditions are right, earnings can accelerate fast. Digital exposure is a clear plus, and innovation sits at the heart of its strategy. The flip side? Higher debt, greater sensitivity to casino spending cycles and more moving parts to manage.

The company carries significant debt, partly from its bold acquisition of Grover Gaming. That takeover expands its charitable gaming footprint but adds financial leverage that could itch investors if winds shift.

So which ASX gaming stock do analysts back?

In 2025, Aristocrat’s share price lost 16.6% of its value, while rival Light & Wonder went 14% higher.

If you want consistency, balance-sheet strength and lower risk, Aristocrat still looks best positioned. Most analysts have a strong buy recommendation on the leading ASX gaming stock.

The maximum 12-month target is set at $81.30, a potential gain of 41% compared to the current share price of $57.55. The average target price is $73.45, a 28% upside.

If you’re chasing faster growth and can stomach bigger risks and swings, Light & Wonder offers potentially more upside. Brokers are a bit more cautious on the $13 billion company with a buy rating.

The most optimistic market watcher sees a 56% upside at $246.19 at the time of writing. However, the average target price for the next 12 months is a lot lower at $174.17 and a potential plus of 10%.

The post Which ASX gaming stock to buy in 2026: Aristocrat Leisure or Light & Wonder? appeared first on The Motley Fool Australia.

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

Wesfarmers Ltd (ASX: WES) shares are among the most widely held blue-chip stocks on the ASX. Its brands, including Bunnings, Kmart, Officeworks, Priceline and its industrial and chemicals division, give the group broad exposure across Australia.

After a strong long-term run, the Wesfarmers share price has moved sideways since early November. Trading at $81.56, investors are asking whether this represents a buying opportunity or simply fair value.

Let’s take a closer look.

A business built to weather all seasons

Wesfarmers’ biggest strength is how spread out its business is.

Bunnings is the company’s main profit driver. Even when people spend less overall, they still repair, renovate, and maintain their homes. This helps keep profits more stable during slower retail periods.

Kmart has also continued to perform well. Its focus on low prices has attracted shoppers looking to save money, helping it grow while many other retailers face tougher conditions. Officeworks has remained steady too, supported by demand from schools and small businesses.

Because Wesfarmers doesn’t rely on just one business, it has been able to perform well even in a tougher retail environment. Over the past year, the shares have returned about 14%, beating the broader S&P/ASX 200 Index (ASX: XJO).

Capital management remains a key attraction

One area where Wesfarmers consistently impresses investors is how it returns money to shareholders.

In FY25, the company reported net profit after tax of $2.93 billion, up 14.4% from the year before. After this strong result, management announced a $1.50 per share capital management initiative, made up of a capital return and a special dividend.

Because the business generates reliable cash across its different divisions, Wesfarmers is able to return money to shareholders when opportunities are limited. This has resonated well with long-term investors.

What brokers are saying

Views from brokers on Wesfarmers are mixed.

Most analysts rate the stock as a hold. This shows they like the business, but have some concerns about the share price and rising costs.

Shaw and Partners recently kept a hold rating. The broker pointed to Wesfarmers’ strong mix of businesses, but warned that higher costs across retail and industrial operations could put pressure on profits in the short term.

Overall, brokers still see Wesfarmers as a high-quality company. However, most expect any share price gains from here to be steady.

Foolish takeaway

At $81.56, Wesfarmers shares aren’t cheap, but the valuation still looks reasonable for a business of this quality.

For investors seeking a defensive ASX blue-chip stock, Wesfarmers still earns its place on a long-term watchlist.

Personally, I wouldn’t be chasing the shares aggressively at current levels. But on market pullbacks, Wesfarmers is the kind of high-quality stock I’d be happy to accumulate for the long term.

The post Is now the time to buy Wesfarmers shares? appeared first on The Motley Fool Australia.

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