There is plenty of discourse around artificial intelligence and the lack of exposure available through Australian stocks. 

While it’s true that Australia doesn’t have a direct equivalent to Nvidia (NASDAQ: NVDA) or the major US technology giants driving the AI revolution, that doesn’t mean Australian investors are shut out of the opportunity. 

The AI buildout requires far more than chips and software. It also requires vast amounts of data-centre capacity, electricity, land and connectivity.

For investors looking to gain exposure to the artificial intelligence boom through Australian equities, these companies offer three different ways of owning the physical infrastructure behind AI. 

Nextdc Ltd (ASX: NXT)

NEXTDC offers perhaps the most direct Australian exposure to the physical infrastructure required to power the AI boom. 

The company operates high-performance data centres that house the servers, GPUs and networking equipment. This is used by cloud providers, enterprises and AI companies. 

As AI models become more computationally intensive, demand is shifting towards high-density data centres with significantly greater power and advanced liquid-cooling capabilities. 

These are areas in which NEXTDC is investing heavily. 

The argument for NextDC is quite straight forward. 

If the world needs dramatically more computing power to develop and run AI, it needs dramatically more data-centre capacity to house that computing power.

Experts seem to agree. UBS recently placing a buy rating with a $23.45 target, implying more than an 80% upside.

Goodman Group (ASX: GMG)

Goodman Group provides a less obvious, but potentially powerful, way to gain exposure to the AI buildout. 

While traditionally known as a global logistics property group, Goodman has been rapidly expanding into data-centre infrastructure.

Its competitive advantage lies in controlling the land, power and development capability needed to build large-scale facilities. 

This is increasingly important because AI data centres are constrained by demand. They are also constrained by access to suitable sites, electricity and network connectivity. 

In other words, Goodman is a way to invest in the scarce physical resources that AI infrastructure needs.

It has also drawn positive attention from experts this month. 

Megaport Ltd (ASX: MP1)

Megaport sits further up the AI infrastructure stack, providing the connectivity that allows data, cloud platforms and computing resources to communicate with one another. 

AI workloads are extraordinarily data-intensive, requiring fast, reliable connections between data centres, cloud providers, GPUs and end users. 

Megaport operates a software-defined networking platform spanning more than 1,200 enabled data centres and 30 countries, making it a potential beneficiary as AI drives greater volumes of data across networks.

Brokers are expecting almost 40% share price growth in the next 12 months on the back of its recent earnings results. 

The post You don’t need to own Nvidia to invest in AI – Here are the best Aussie artificial intelligence shares 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 positions in and has recommended Goodman Group, Megaport, and Nvidia. The Motley Fool Australia has recommended Goodman Group and Nvidia. 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 volatile year for S&P/ASX 300 Index (ASX: XKO) stock Elders Ltd (ASX: ELD). 

The company is an agribusiness that provides goods and services to Australian primary producers. 

It sells seed, fertiliser, agricultural chemicals, animal health products, and general rural merchandise. It also supplies professional and technical services to farmers via its network of agronomists.

Rollercoaster 12 months 

In the past 12 months, the ASX 300 stock has hit highs of nearly $8 per share, and lows of less than $5 per share. 

Back in June, it was hovering around the $5 mark, but has since rallied significantly. 

Since then, it has risen an impressive 30%. 

When ASX 300 stocks bounce around this significantly, it can be difficult for investors to identify fair value.

However, a new report from Bell Potter has provided a fresh outlook for the next 12 months. 

Slight downgrade

Overall, Bell Potter has downgraded Elders from buy to hold. The broker also slightly increased its target price from $6.45 to $6.70 per share.

The main reason for the downgrade is that Elders’ underlying earnings drivers remain positive. However, growth is starting to moderate as the company faces tougher year-on-year comparisons.

Agency markets remain supportive. Cattle slaughter and yardings are both up 2% year on year, while cattle prices are up 23%. 

Sheep volumes have fallen significantly, but this has been offset by stronger pricing, with lamb prices up 21% and mutton prices up 40%. Wool volumes are expected to be broadly flat to slightly higher, while the EMI is up 43%.

The broker also identified that crop conditions are favourable.

Recent upgrades to Australian crop forecasts, supported by rainfall, should help demand for Elders’ agricultural services, particularly in Western Australia and southeastern Australia. 

However, the forecast for summer crop acreage was weaker than expected, at 1.121 million hectares, down 17% year-on-year.

Minimal upside for ASX 300 stock

Overall, Bell Potter expects FY26 earnings to be broadly unchanged, with NPAT estimates revised by +1% for FY26, -2% for FY27 and -4% for FY28. 

The broker believes the business remains fundamentally sound, but the earnings tailwinds are easing, which supports a Hold rather than Buy rating.

From yesterday’s closing price, the updated target from Bell Potter indicates roughly 3% upside over the next 12 months. 

Following the recent recovery in the share price we are moving our rating from Buy to Hold. 

Investments in Delta and Systems Modernisation programs are the largest drivers of near term growth, however, we see the large livestock tailwinds the agency business has benefited from the past two years facing more difficult comparisons moving forward.

The post This ASX 300 stock has rebounded 30% from yearly lows – can it keep rallying? 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 recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Australia’s corporate sector is cautious heading into the current financial year, according to the analysts at Canaccord Genuity, however, there are some standouts in terms of likely profit growth going forward.

The broking house said in the recent reporting season, there was “healthy” headline earnings per share growth of 12%, however, this was driven largely by the mining sector.

Uncertainties have big business on the back foot

Looking ahead, CG said company guidance on the outlook was “broadly cautious across the board”.

They added:

High interest rates, tax policy changes, the weaker housing market, cost-of-living pressures and geopolitical uncertainty together constrained management confidence and limited visibility into the near-term outlook for operating conditions. Retail trading updates provided the clearest evidence of a softening consumer, with top-line growth slowing through 2H26 and into early FY27. The major Banks similarly pointed to tougher macro conditions and slower housing credit growth over the year ahead.

CG said the market was in a clear downgrade cycle outside of the resources sector.

They added:

Accordingly, we remain cautious on ASX 200 returns over the next twelve months. However, active investors willing to look beyond the index can still find high-quality companies offering resilient earnings despite the soft macro, credible growth prospects, and reasonable valuations.

But there are some sectors which are likely to perform well, the broking house said.

The energy sector is expected to grow earnings by 38%, driven by high oil prices, while the IT sector is expected to grow earnings by 22%, with strength from the major software as a service companies.

Consumer services are expected to grow earnings 13%, materials are expected to be up 11%, and retail staples also 11%.

Financial services facing challenges

CG is expecting the weakest growth to come from the financial services sector, with banks growing earnings just 3%.

Discretionary retail is also expected to be weak with 6% growth.

CG said:

Prior to reporting season, we flagged our caution towards both Banks and Retail. As expected, reporting season showed that both sectors face mounting macro headwinds from a weaker housing market, fragile consumer sentiment, high interest rates and persistent cost-of-living pressures (exacerbated by petrol price volatility). For Banks, this was reflected in cautious outlooks pointing to softer credit growth. For Retail, early-FY27 trading updates generally pointed to weakening top-line growth, particularly among retailers with greater exposure to housing activity.

CG said elevated bank valuations remain hard to reconcile with a weakening macro outlook and subdued earnings prospects.

They added:

Despite the soft sector outlook, the Big 4 trade at an average P/E ~20% above their ten-year average, supporting our continued sector underweight.

The post Where will the best returns in the ASX 200 be in the next year? 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 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.