ASX growth shares can generate some of the strongest returns over time, but there can be plenty of volatility along the way. I’m going to highlight two companies that have exciting futures and whose recent valuation declines have made them appear better value.

It’s normal for fast-growing businesses to sometimes experience a bump. There have been numerous sell-offs, for example, of Amazon and Microsoft shares over the last 30 years. Those dips were opportunities.

I’m not expecting the following two businesses to do as well as the US tech giants, but the future looks positive for these stocks.

Pro Medicus Ltd (ASX: PME)

Pro Medicus is one of the most impressive ASX growth shares, in my view. It provides a full range of medical imaging software and services to hospitals, imaging centres, and healthcare groups in Australia and internationally.

The company is winning a lot of new contracts, which is driving its earnings higher at a rapid rate. In this month alone, it has announced multiple contracts worth a total of $73 million. Large clients are clearly loving what they’re seeing with the offering.

This new revenue is extremely valuable to the business because it has an underlying operating profit (EBIT) margin of 74% (as of FY25). That means almost three-quarters of revenue is turning into EBIT, which is a very high proportion. This is helping drive the bottom line and dividends to higher levels at a growth rate of more than 30% (in FY25).

Its FY25 revenue rose 31.9% and it seems the company is set to deliver further strong growth for the foreseeable future.

The ASX growth share still has a high price-to-earnings (P/E) ratio, but it appears considerably cheaper after the Pro Medicus share price declined by 20% since July, as the chart below shows.

Temple & Webster Group Ltd (ASX: TPW)

This company sells homewares and furniture online. The ASX growth share took a hammering yesterday after delivering a trading update that didn’t live up to expectations. I think this is a long-term buying opportunity.

Revenue between 1 July 2025 and 20 November 2025 grew by only 18% year over year, compared to the 28% growth achieved between 1 July and 11 August 2025. It’s clear there has been a major slowdown since August.

However, the company has a long history of delivering strong growth, so I believe this is just a temporary hit for the ASX growth share rather than a permanent situation.

For starters, the overall Australian furniture and homewares market only recently reached 20% online penetration. In the US and UK markets, online penetration has climbed to 29% and 35%, respectively, suggesting a further increase in e-commerce adoption by shoppers.

With 18% revenue growth for the financial year to date, the company is still gaining market share, giving it more market power and economies of scale.

The business noted a number of other positives in its AGM update – it’s starting to ship products to New Zealand, its home improvement revenue rose over 40% year over year, and the trade and commercial revenue increased 23% year over year.

I’m expecting the company’s revenue to be significantly higher in five years, and the profit margins should climb thanks to operating leverage and specific efforts the ASX growth share is making to improve efficiencies, leverage AI, and enhance technology across the business.

The post Why I think these 2 ASX growth shares are great buys today appeared first on The Motley Fool Australia.

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• Why Gentrack, Monash IVF, Pro Medicus, and Qube shares are racing higher today
• Pro Medicus shares charge higher on big news

Motley Fool contributor Tristan Harrison has positions in Pro Medicus and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Microsoft, and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus and 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 Amazon, Microsoft, Pro Medicus, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

EV company Tesla (NASDAQ: TSLA) has had a rough year. One on hand, EV sales rose in quarter three, and the energy business is growing steadily. On the other hand, EV tax credits expired in September, and the Pew Research Center has polled declining support for solar and EVs. 

While meaningful, these may be short-term headwinds. Going deeper, we’ll look at Tesla through the lens of Warren Buffett, one of the greatest investors of all time. Warren Buffett’s partner, Charlie Munger, strongly suggested that investors “invert, always invert” when considering investments.

Here, we’ll invert by swapping “reasons to invest in Tesla” with “reasons to distance yourself from Tesla.” In doing so, we can quickly pinpoint who might be better off investing elsewhere. 

1. Tesla’s CEO has reputation issues and lacks focus

Trust is crucial to any business. Warren Buffett has said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” I think Tesla has stumbled more than once here. The EV company — CEO Elon Musk in particular — has built a reputation not just for excellent cars, but for partisan politics. That’s worrying.

People associate Tesla’s brand with Elon Musk’s politics. A 2025 study by the nonpartisan National Bureau of Economic Research suggests that Tesla sales between October 2022 and April 2025 would have been 67-83% higher (1-1.26 million more vehicles sold) had the Tesla CEO avoided polarization. If so, this may be why trailing 12-month vehicle deliveries peaked at ~1.8m in Q3 of 2023. Despite slashing Tesla prices 20% in 2023, deliveries have remained flat or down.

Mr. Musk also poses a growing risk to management. In a 1996 Berkshire Hathaway shareholder letter, Warren Buffett says, “Loss of focus is what most worries Charlie and me when we contemplate investing in businesses that in general look outstanding. All too often, we’ve seen value stagnate in the presence of hubris or of boredom that caused the attention of managers to wander.”

Elon Musk’s attention seems sporadic. He has founded seven companies and is actively participating in six (Tesla, SpaceX, Neuralink, xAI, X.com, The Boring Company). In 2024-2025, he spent months at the White House running the Department of Government Efficiency (DOGE). After that, he floated the idea of a third political party to X.com users.

The risk of Elon Musk losing focus on Tesla is so high that the company’s board of directors has released a letter to the public, urging shareholders to approve a pay package that could be worth a trillion dollars, in order to prevent Elon from leaving the company. Recently, shareholders approved the package.

While the pay package does a good job of aligning incentives, it’s no guarantee that Elon Musk will prioritize Tesla.

2. Tesla lacks a durable competitive advantage

Competition is something to watch. In a 1999 Fortune Magazine interview with Carol Loomis, Warren Buffett says, “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.” Tesla produces excellent cars, and its growing automation efforts may significantly impact society. But it seems to lack a moat that protects its share of the EV market.

Declining EV sales isn’t a global problem; it’s a Tesla problem. Trailing 12-month deliveries of Tesla vehicles reached a peak in 2023. However, global EV sales increased from over 13 million to 17 million between 2023 and 2024. In the U.S., Tesla’s home turf, sales of EVs rose from 1.2 to 1.3 million. All this indicates stiffer competition in what should be Tesla’s strongest region (the U.S.). Unfortunately, Tesla has far from recovered. By August 2025, Tesla’s U.S. market share of EVs fell from 80% to 38%, an eight-year low.

Global competition is already stiff and rising. Chinese groups BYD (OTC: BYDDY) and Geely (OTC: GELYY) boast the greatest market share and are growing. (Berkshire Hathaway purchased BYD shares in 2008, selling in 2025 for a tidy profit.) According to a study by SNL Research, Tesla hasn’t just lost market share in every major market. It’s the only top global EV company with a negative growth rate (-11% between January and August 2025, by deliveries).

I think it’s worth asking whether Tesla’s current business can withstand competition in EV sales, its biggest revenue generator. It had a first-mover advantage, but Tesla’s momentum is gone.

Risk is leadership and competition

If I were Warren Buffett, I’d take issue with Tesla’s CEO (poor reputation, unfocused) and lack of competitive advantage. Tesla’s CEO poses a long-term risk to trust and focus, and Tesla is losing market share to competition. I’ll be holding off on adding to my Tesla position until I’m confident that Tesla’s CEO will prioritize Tesla. Until then, I’m better off investing in higher-confidence businesses. 

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

The post 2 reasons to distance yourself from Tesla in 2025, according to Warren Buffett logic 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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Cole Tretheway owns Tesla stock. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended BYD Company. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

Nvidia (NASDAQ: NVDA) rocketed as much as 6.5% higher in after-hours trading on Nov. 19 after reporting third-quarter fiscal 2026 results and issuing fourth-quarter guidance.

While some investors may have been focused on the revenue and earnings per share (EPS) beats, the most jaw-dropping number of the report was hiding in plain sight.

Here’s what blew me away about Nvidia’s recent quarter, and why the artificial intelligence (AI) growth stock remains a great buy now.

Nvidia’s revenue growth is mostly profit

Nvidia grew revenue by $21.92 billion compared to the same quarter last year, but the cost of revenue grew by just $6.23 billion, and operating expenses only grew by $1.17 billion.  This means that Nvidia is converting the bulk of additional revenue into operating income.

Despite fears that Nvidia’s margins would compress due to competition and increased research and development spending, Nvidia’s operating margin was actually higher this quarter than in Q3 of fiscal 2025. More importantly, Nvidia converted a staggering 56% of revenue into after-tax net income.

With $31.91 billion in net income generated in the quarter, Nvidia will likely eclipse Alphabet within the next year as the most profitable U.S. company — and probably the most profitable company in the world unless oil prices, and, in turn, Saudi Aramco‘s profits surge.

Nvidia is thriving, but risks remain

Nvidia gets a lot of attention for its stock price, but the performance of the business is what long-term investors should continue to focus on.

There’s simply no company in the world remotely close to Nvidia’s size that is growing earnings this quickly. The combination of industry leadership, high margins, and technology at the epicenter of AI data centers makes Nvidia a compelling long-term investment.

As for the valuation, Nvidia is priced as if it is going to continue growing earnings by double digits quarter over quarter. For that to happen, its key customers — the hyperscalers building out data centers and training AI models — need to keep spending. These hyperscalers must continue to generate strong cloud computing growth from key customers across various sectors. But to do that, compute and AI spending need to be profitable for cloud customers. The whole value chain breaks if end user spending isn’t paying off.

As excellent as Nvidia’s results are, it would be a mistake to overlook the double-edged sword that Nvidia holds as the undisputed leader in data center computing and networking. Nvidia is the single biggest beneficiary of increased AI capital, but it would also be one of the hardest-hit companies during a critical slowdown.

Fortunately for long-term investors, Nvidia has $60.61 billion in cash, cash equivalents, and marketable securities on its balance sheet, compared to just $7.47 billion in long-term debt. Paired with its ultra-high margins, Nvidia is undoubtedly the best-positioned AI company to ride out a slowdown.

Nvidia is still a buy

Nvidia is the poster child of today’s top-heavy, premium-priced market. What separates Nvidia is that the stock’s run-up is supported by solid fundamentals, whereas other pockets of the market have valuations that are arguably overextended.

All told, Nvidia is still a good buy for investors who believe in a sustained ramp-up in hyperscaler AI capital expenditures.

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

The post The most jaw-dropping number you may have missed from Nvidia’s latest earnings report 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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Daniel Foelber has positions in Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Nvidia. The Motley Fool Australia has recommended Alphabet and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Many ASX investors dream of investing in shares as Warren Buffett does. The legendary CEO of Berkshire Hathaway is universally regarded as one of the best stock pickers of all time, thanks to his remarkable returns over a more than 60-year career at the helm of Berkshire.

This is obviously easier said than done, however. Although Buffett is almost impossible to emulate, thanks to his clear and irreplicable natural abilities, he has (most fortunately for fellow investors) been generous with his wisdom and guidance over the years.

One of the traits he has consistently told investors to focus on when evaluating companies is the presence of a wide economic moat. This moat, a term Buffett himself coined, refers to an intrinsic competitive advantage a company can possess. This, like a moat around a castle, protects its profits from marauding competitors.

There isn’t just one form of moat when it comes to stocks, though. It could be a powerful brand that inspires unswerving customer loyalty, like Apple or Nike arguably possess. It could be a price advantage that enables a company to sell goods or services at prices that its competitors cannot match, as Coles Group Ltd (ASX: COL) or Woolworths Group Ltd (ASX: WOW) do. Or it could be a product or service that a company provides that customers find difficult to stop using. Microsoft‘s Office suite or Transurban Group (ASX: TCL)’s toll roads come to mind here.

But finding growing companies with durable moats that will stand the test of time, as well as those trading at the right price, is a hard ask. No investor has perfected the art quite like Buffett.

Investing like Buffett with this ASX ETF

However, one ASX exchange-traded fund (ETF) provides Australian investors with an easy path to replicate Buffett’s successful strategy. It’s the VanEck Morningstar Wide Moat ETF (ASX: MOAT).

This ETF holds a relatively concentrated portfolio (40-60) of US stocks, whose moats have been screened and analysed by Morningstar and deemed attractive at current pricing.

We can see this in some of its current holdings. These include Google-owner Alphabet, Adobe, Caterpillar, and Cadbury-owner Mondelez International.

This ETF’s track record has demonstrated that its Buffett-inspired strategy is effective. Since its inception in June 2015, MOAT units have returned an average of 15.15% per annum. That doesn’t quite match Buffett’s long-term track record, but it’s an impressive figure nonetheless. And well above what the Australian market has delivered over the same timeframe.

The VanEck Morningstar Wide Moat ETF charges a management fee of 0.49% per annum.

The post Invest like Warren Buffett with this ASX ETF appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Alphabet, Apple, Caterpillar, Microsoft, Mondelez International, and VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Alphabet, Apple, Microsoft, Nike, and Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft, long January 2028 $330 calls on Adobe, short January 2026 $405 calls on Microsoft, and short January 2028 $340 calls on Adobe. The Motley Fool Australia has positions in and has recommended Transurban Group and Woolworths Group. The Motley Fool Australia has recommended Adobe, Alphabet, Apple, Microsoft, Nike, and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.