The Australian share market may be closing in on its record high, but that doesn’t mean that there aren’t big potential returns out there.

For example, listed below are three ASX 200 shares that could have major upside potential according to analysts. Here’s what you need to know:

Breville Group Ltd (ASX: BRG)

Breville’s growth story is often misunderstood as cyclical or discretionary. While it does sell consumer appliances, the business is better viewed as a premium product company with global reach.

Breville has spent years refining its design, engineering, and brand positioning, allowing it to sell higher-value products rather than competing on volume alone.

As Breville deepens its presence in North America and Europe, incremental growth does not require reinventing the business. New product launches, category expansion, and distribution leverage can all contribute to earnings growth without dramatic increases in cost.

And while US tariffs could pose a short-term risk, this appears to have been priced in now.

Macquarie is bullish on this ASX 200 stock. It has an outperform rating and $39.20 price target on its shares. This implies potential upside of 25% for investors from current levels.

Lovisa Holdings Ltd (ASX: LOV)

Another ASX 200 share that could have plenty of upside is growing retailer Lovisa.

Its fast-fashion jewellery model is built around speed, store productivity, and global rollout, rather than relying on any single region or trend. That structure gives Lovisa flexibility to keep expanding even when individual markets slow.

As long as Lovisa can continue opening stores at attractive returns and managing inventory tightly, earnings growth will follow. And small improvements in store performance or international penetration can compound meaningfully over time.

Macquarie is also positive on this one. It has an outperform rating and $37.30 price target on its shares. This suggests that they could rise 21% between now and this time next year.

NextDC Ltd (ASX: NXT)

Finally, NextDC could be an ASX 200 share to buy for big potential returns.

It develops and runs data centres that underpin cloud computing, enterprise IT, artificial intelligence, and data-intensive workloads. While near-term earnings can be influenced by build cycles and capital investment, the long-term demand drivers remain firmly in place.

As NextDC’s newer facilities mature and customer demand catches up with capacity, operating leverage can begin to show. Revenue growth does not need to accelerate dramatically for margins to improve as fixed costs are absorbed.

With digital infrastructure becoming more critical across industries, NextDC’s role may prove more valuable than the market currently prices in.

Morgans is a big fan and has a buy rating and $19.00 price target on its shares. This implies potential upside of approximately 45% over the next 12 months.

The post Why these ASX 200 shares could still have major upside in 2026 appeared first on The Motley Fool Australia.

More reading

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• Here are the top 10 ASX 200 shares today
• 2 great ASX 200 blue-chip shares I’d buy right now!
• 5 top ASX growth shares to buy now with $5,000
• 2 no-brainer Australian stocks to buy with $1,000 right now

Motley Fool contributor James Mickleboro has positions in Lovisa and Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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.

It has been another busy week for many of Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone right now:

Catalyst Metals Ltd (ASX: CYL)

According to a note out of Bell Potter, its analysts have upgraded this gold miner’s shares to a buy rating with an improved price target of $13.50. This follows the release of a strong quarterly update which came in ahead of the broker’s expectations. Looking ahead, the broker feels that the company’s Plutonic operation will become a long-term production hub that underpins a significant increase in output. In fact, Bell Potter believes Catalyst Metals will increase its production to 200,000 ounces a year by FY 2029. This compares to its current guidance for FY 2026 of 100,000 ounces to 110,000 ounces of gold. Combined with its updated gold price forecast, the broker believes this gold miner’s shares offer significant value at present. The Catalyst Metals share price is trading at $8.82 on Friday afternoon.

Monadelphous Group Ltd (ASX: MND)

Another note out of Bell Potter reveals that its analysts have upgraded this diversified services company’s shares to a buy rating with an improved price target of $33.00. Bell Potter has been pleased with the company’s strong start to FY 2026. It notes that Monadelphous has won significantly more contracts than it was expecting. Financial year to date, Bell Potter estimates that the company’s contract award value is ~$1,400 million. This compares to $1,550 million in the whole of FY 2025. The good news is that the company’s current orderbook builds a strong foundation for earnings growth in the near-term that it feels is not reflected in consensus expectations. The Monadelphous share price is fetching $30.00 at the time of writing.

Zip Co Ltd (ASX: ZIP)

Analysts at Citi have retained their buy rating on this buy now pay later provider’s shares with a trimmed price target of $4.30. According to the note, the broker believes that data out of the United States points to a strong performance from Zip Co during the last quarter. Citi highlights that app downloads hit record highs during December, which bodes well for its transaction growth in the massive market. In fact, the broker is predicting total transaction value (TTV) growth of 43% in the second quarter. Though, it wouldn’t be surprised if Zip Co outperformed this. The Zip share price is trading at $3.09 this afternoon.

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

More reading

• Why Capstone Copper, Catalyst Metals, DroneShield, and Wildcat shares are rising today
• Why Bell Potter just upgraded this smashing ASX 200 stock
• Buy, hold, sell: Catalyst Metals, NRW, and Paladin Energy shares
• 3 unstoppable ASX growth stocks to buy even if there’s a stock market sell-off in 2026
• 5 things to watch on the ASX 200 on Friday

Citigroup is an advertising partner of Motley Fool Money. 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 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.

Natural gas prices have fallen sharply over the past month, catching many energy investors off guard.

The US natural gas benchmark is now trading near US$3.10 per MMBtu, down roughly 22% over the last 4 weeks. That move has pushed prices to their lowest levels in around 3 months and marks a swift reversal from the strength seen late last year.

So, what is happening, and what does it mean for ASX energy stocks?

Why natural gas prices are falling

The main driver behind the recent sell-off has been weaker demand.

Much of the US and Europe has experienced milder than normal winter weather, reducing heating demand during what is usually the strongest period of the year for natural gas consumption. That has left the market with less urgency to push prices higher.

US gas production continues to run near record levels, while storage withdrawals have come in well below expectations. The latest data showed inventories falling by just 71 billion cubic feet, well short of what the market had been expecting. As a result, storage levels remain comfortable, easing near-term supply concerns.

There has also been some softness on the export side. LNG feedgas flows have dipped in recent weeks as maintenance activity at export terminals reduced demand, adding to the short-term supply-demand imbalance.

What the outlook looks like

In the short term, many analysts expect natural gas prices to remain under pressure if mild weather continues and supply stays elevated.

Forecasts suggest global gas demand could pick up again in late 2026 and into 2027, supported by rising LNG exports, growing data centre power needs, and ongoing electrification. Some projections point to tighter market conditions next year if demand growth begins to outpace supply.

What this means for ASX energy stocks

For Australian energy companies, falling gas prices can be both positive and negative.

For Origin Energy Ltd (ASX: ORG), lower gas and LNG prices can pressure earnings from its LNG exposure, particularly through the Australia Pacific LNG project. At the same time, cheaper gas can help reduce input costs for its retail energy business.

For AGL Energy Ltd (ASX: AGL), lower wholesale gas prices can support margins for electricity generation and retail supply. However, softer energy prices can also limit revenue growth, especially in a competitive retail market.

Both companies are also influenced by domestic policy settings, including efforts to keep more gas available for local use, which can cap pricing power.

Foolish bottom line

Natural gas prices have fallen by around 22% over the past month due to weaker demand and ample supply. While that creates short-term pressure, longer-term demand trends suggest the market could tighten again.

Keep in mind that energy stocks remain exposed to swings in gas prices and weather patterns, making the sector one to watch closely in 2026.

The post Natural gas prices have fallen 22% in a month. Here’s what is driving the drop appeared first on The Motley Fool Australia.

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• AGL Energy versus Origin Energy shares: Which is a better buy for 2026?
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• Guess which ASX 200 stock is rising on big news
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• Ord Minnett names 2 ASX 200 shares to buy for massive returns

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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is having a good finish to the week. In afternoon trade, the benchmark index is up 0.45% to 8,902.7 points.

Four ASX shares that have failed to follow the market higher on Friday are listed below. Here’s why they are ending the week in the red:

Australian Ethical Investment Ltd (ASX: AEF)

The Australian Ethical share price is down 1.5% to $4.91. Investors have been selling this fund manager’s shares after it released a trading update. Australian Ethical revealed that its funds under management (FUM) dropped 1% in the December quarter to $14.08 billion. This was driven by positive retail and wholesale net flows, which were offset by negative investment performance and institutional outflows during the period. The company’s managing director, John McMurdo, said: “Despite challenging investment market conditions, it’s been a pleasing first half of the year.”

Northern Minerals Ltd (ASX: NTU)

The Northern Minerals share price is down 5.5% to 3.5 cents. This is despite the heavy rare earths company releasing an update on preliminary laboratory metallurgical test work. Northern Minerals’ managing director and CEO, Shane Hartwig, said: “Achieving the positive preliminary metallurgical results for the Wolverine – Dazzler blend test work marks an important milestone in the Company’s development of Dazzler as a potential additional source of heavy rare earth feed material for Browns Range.”

PLS Group Ltd (ASX: PLS)

The PLS share price is down over 4% to $4.62. This may have been driven by profit taking from some investors following very strong gains over the past 12 months. Earlier this week, Morgans put a hold rating and $4.55 price target on the lithium miner’s shares. It said: “We upgrade our recommendation to Hold, reflecting improving lithium market fundamentals that will materially strengthen PLS’ earnings and cash flow generation.” The broker sees more value in Mineral Resources Ltd (ASX: MIN) and other ASX lithium shares at current levels. You can read about its Mineral Resources recommendation here.

Woodside Energy Group Ltd (ASX: WDS)

The Woodside share price is down 1.5% to $23.68. Investors have been selling Woodside and other ASX energy shares on Friday. This was in response to a sharp pullback in oil prices overnight due to easing US-Iran tensions. Both Brent and WTI crude oil prices were down over 4% during Thursday night’s session.

The post Why Australian Ethical, Northern Minerals, PLS, and Woodside shares are falling today appeared first on The Motley Fool Australia.

More reading

• Brokers issue new price targets on soaring ASX 200 mining shares
• 5 things to watch on the ASX 200 on Friday
• Why ASX 200 lithium stocks like Liontown and Mineral Resources are making waves today
• After 5 days of straight gains, is oil setting up for its next move?
• 5 ASX 200 mining stocks including Mineral Resources and BHP shares smashing new 52-week highs today

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

Plenty of ASX 200 mining shares have hit multi-year highs over the past fortnight as several key commodity prices continue to soar.

Some commodities have risen by more than 25% and even up to 70% over the past month alone.

This has led to many brokers updating their ratings and 12-month share price targets on several leading ASX 200 miners.

Let’s take a look.

BHP Group Ltd (ASX: BHP)

The ASX 200 iron ore and copper mining giant hit a two-year high of $49.75 per share yesterday.

Last week, Jason Fairclough at Bank of America reiterated his buy rating on BHP shares.

He raised his 12-month share price target from $49 to $56.

A $56 share price would be a record for BHP shares. The current record is $50.84, reached on 28 December 2023.

This week, Goldman Sachs maintained a buy rating on the market’s largest ASX 200 mining share.

The broker lifted its price target from $48.10 to $57.70.

Also this week, Macquarie reiterated its hold rating on BHP and raised its price target from $43 to $48.

Morgan Stanley reiterated its buy rating on BHP shares with a price target of $48.

Yesterday, Ord Minnett reiterated its buy rating and lifted its price target from $48 to $49.

Fortescue Ltd (ASX: FMG)

The Fortescue share price hit a 52-week high of $23.38 on 11 December.

The ASX 200 mining share has been trading very close to this level recently.

This week, Jarden reiterated its sell rating on Fortescue shares and raised its price target from $16 to $17.

Goldman Sachs reiterated its hold rating and raised its target from $19.30 to $22.70.

Macquarie retained its sell rating with a revised price target of $21, up from $19.50.

Mineral Resources Ltd (ASX: MIN)

This ASX 200 iron ore and lithium mining share reached a 52-week high of $62.86 on Thursday.

This week, Bell Potter maintained its buy rating and raised its price target from $59 to $68.

Goldman Sachs maintained its sell rating but raised its target from $35 to $43.

Macquarie maintained its hold rating and raised its price target from $51 to $56.

PLS Group Ltd (ASX: PLS)

The ASX 200’s largest pure-play lithium share hit a two-and-a-half-year high of $5.04 yesterday.

This week, Bell Potter upgraded its rating to hold and lifted its price target from $2.65 to $4.55.

Macquarie kept its hold rating but lifted its price target from $3.80 to $4.50.

South32 Ltd (ASX: S32)

ASX 200 diversified mining share South32 hit a near two-year high of $4.17 yesterday.

South32 is exposed to nine commodities, including silver via its Cannington mine and aluminium.

This week, UBS maintained its hold rating with a price target of $3.50.

Morgan Stanley reiterated its buy rating with a target of $3.45.

Goldman Sachs maintained its hold rating but raised its target from $2.90 to $3.40.

Macquarie reiterated its buy rating and lifted its target from $3.70 to $4.20.

Newmont Corporation CDI (ASX: NEM)

This ASX 200 large-cap gold mining share reached a new record of $172.60 on Wednesday.

Citi reiterated its buy rating and lifted its target price from $160 to $177.

Goldman Sachs reiterated its buy rating and lifted its target price from $154.50 to $185.10.

Sandfire Resources Ltd (ASX: SFR)

The ASX 200’s largest pure-play copper share reached a record $19.61 yesterday.

This week, Goldman Sachs reiterated its hold rating but lifted its target price from $12.30 to $16.20.

Canaccord Genuity kept its hold rating too, but lifted its target from $15 to $19.25.

Morgan Stanley reiterated its sell rating with an $11.45 target.

The post Brokers issue new price targets on soaring ASX 200 mining shares appeared first on The Motley Fool Australia.

More reading

• Why Australian Ethical, Northern Minerals, PLS, and Woodside shares are falling today
• Buying BHP and Rio Tinto shares? Here’s how the ASX mining giants are partnering up
• Mining momentum: 2 ASX stocks that could surprise investors this January
• $10,000 invested in WIRE ETF a year ago is now worth…
• 5 things to watch on the ASX 200 on Friday

Citigroup is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor Bronwyn Allen has positions in BHP Group and South32. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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.

With just a few hours before Friday’s closing bell, the S&P/ASX 200 Index (ASX: XJO) is up a welcome 2% for the week, with plenty of help from these four surging ASX 200 stocks.

We’ve got a fairly diverse batch of market leaders this week.

Here’s why investors have been buying these ASX shares.

ASX 200 stocks storming higher this week

The first outperforming stock on my list for the week is IperionX Ltd (ASX: IPX).

Shares in the titanium products producer closed last Friday trading for $6.37. At the time of writing, shares are changing hands for $7.16 each. That sees this ASX 200 stock up 12.3% for the week.

IperionX shares have been key beneficiaries of the United States’ push to strengthen the defence-related supply chains for critical materials.

IperionX shares are marching higher again today after the company announced it had received the final US$4.6 million payment from the US$47.1 million US government funding package to support the development of titanium manufacturing within the US.

Which brings us to the second ASX 200 stock racing higher this week, Whitehaven Coal Ltd (ASX: WHC).

Shares in the coal miner closed last Friday trading for $7.83 and are currently trading for $8.82. This puts the Whitehaven share price up 12.7% for the week.

There were no price-sensitive announcements from the company this week. But the outlook for long-term coal demand is getting a big boost from China.

According to Trading Economics:

Coal prices rose toward US$110 per ton, climbing toward one-month highs as China prepares to launch more than 100 coal-fired power generators that are expected to supply electricity across the globe this year.

Moving on to the third ASX 200 stock smashing the benchmark this week, we have Iluka Resources Ltd (ASX: ILU).

Shares in the miner closed last week at $6.18. Shares are currently swapping hands for $7.06 each. That sees the Iluka Resources share price up 14.2% for the week.

With no fresh news out this week, Iluka also looks to be benefiting from the Western world’s push to secure crucial rare earths supplies outside of China. Iluka produces zircon and high-grade titanium dioxide feedstocks, and the company owns a rare earths refinery project in Western Australia.

Which brings us to…

Leading the charge

The top performing ASX 200 stock on my list for the week is Light & Wonder Inc (ASX: LNW).

Shares in the gaming technology company closed last week trading for $154.70. In afternoon trade today, shares are changing hands for $179.72 apiece. This sees the Light & Wonder share price up 16.2% for the week.

Light & Wonder shares closed up 18% on Monday after announcing an end to the legal actions lodged by rival gaming company Aristocrat Leisure Ltd (ASX: ALL) in Australia and the United States.

Light & Wonder admitted it had erroneously used some of Aristocrat’s maths information to develop its Dragon Train and Jewel of the Dragon games. The company agreed to pay Aristocrat Leisure US$127.5 million to settle the matter.

The post 4 ASX 200 stocks smashing the benchmark this week appeared first on The Motley Fool Australia.

More reading

• This ASX stock just scored a US government win. Here’s the details
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• Here are the top 10 ASX 200 shares today

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 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.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week in a positive fashion. At the time of writing, the benchmark index is up 0.4% to 8,896.9 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are pushing higher:

Capstone Copper Corp (ASX: CSC)

The Capstone Copper share price is up 7.5% to $15.69. Investors have been buying this copper miner’s shares after it reported a record performance for FY 2025. Capstone Copper revealed that it achieved its annual copper production guidance for FY 2025, delivering record annual copper production of 224,764 tonnes. This was up 22% compared to FY 2024 and 37% compared to FY 2023. Capstone Copper’s CEO, Cashel Meagher, said: “2025 marked an inflection point for Capstone, with the successful execution of several key catalysts delivering transformational copper growth. For the fourth year in a row, we achieved record consolidated copper production, driving a 22% increase in output year-over-year.”

Catalyst Metals Ltd (ASX: CYL)

The Catalyst Metals share price is up 13% to $8.85. On Thursday, the gold miner released a strong quarterly update. Catalyst Metals produced 28,176 ounces of gold with an average all-in sustaining cost (AISC) of A$2,565 per ounce. Looking ahead, it has retained its FY 2026 guidance of 100,000 ounces to 110,000 ounces of gold production at an AISC of A$2,200 to A$2,650 per ounce. In response, Bell Potter retained its buy rating with a vastly improved price target of $13.50. It said: “OP mining at Trident is expected to conclude in 2HFY26, transitioning to high grade UG operations. We forecast Trident UG to reach steady state of ~50kozpa by 2027. These five mines are to underpin CYL’s 10-year ~200kozpa strategy, which we forecast to be achieved by FY29.”

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 8% to $4.41. After the market close on Thursday, the counter drone technology company revealed that it has been selected for the Australian Government’s Project LAND 156 C-sUAS Services Standing Offer Panel. It notes that the Panel arrangement enables Defence to procure DroneShield’s counterdrone services through selective and limited tender. The company’s CEO, Oleg Vornik, said: “We welcome the opportunity to support Defence through this Panel arrangement and stand ready to deliver battle-proven, software-defined C-sUAS solutions.”

Wildcat Resources Ltd (ASX: WC8)

The Wildcat Resources share price is up 3.5% to 45 cents. This follows the release of the lithium developer’s quarterly update. It advised that during the quarter, it advanced its Pilbara lithium portfolio through continued exploration success and development progress. This includes drilling at the Bolt Cutter Central Lithium Project, 10km west of Tabba Tabba, which expanded a large, stacked spodumene-bearing pegmatite system that remains open. Diamond drilling is planned for early 2026.

The post Why Capstone Copper, Catalyst Metals, DroneShield, and Wildcat shares are rising today appeared first on The Motley Fool Australia.

More reading

• Up 555% in a year. Is Droneshield the ASX’s hottest stock or the riskiest?
• Buy, hold, sell: Catalyst Metals, NRW, and Paladin Energy shares
• Guess which ASX copper stock is jumping 7% on record results
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• $10,000 invested in WIRE ETF a year ago is now worth…

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 DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Droneshield Ltd (ASX: DRO) has been one of the most talked-about stocks on the ASX. The counter-drone specialist has delivered huge gains for investors, but after another update and a soaring valuation, some hard questions are starting to surface.

The Droneshield share price is up around 555% over the past 12 months and is climbing another 8.09% to $4.41 in today’s afternoon trade. At current levels, the company is valued at almost $4 billion, which puts it firmly among the ASX’s larger defence technology plays.

So, is the stock now priced too high? Let’s find out.

A fresh defence boost

After market close on Thursday, Droneshield announced it had been selected for the Australian Government’s Project LAND 156 Line of Effort 3 panel.

This panel allows Defence to procure counter-drone services more easily over the coming years. It also creates a pathway for future work across defence sites in Australia.

That said, the update stops short of confirming any near-term revenue. No contract values were disclosed, no sales were locked in, and no orders were guaranteed. In essence, the latest release represents a potential future opportunity for Droneshield rather than actual revenue added to its books.

Valuation reality check

This is where understanding the relationship between valuation and sales becomes important.

Droneshield generated roughly $100 million in revenue over the past year, based on recent disclosures. While this is strong growth, it is worth keeping in mind that it sits far away from a market capitalisation pushing $4 billion.

That implies investors are paying close to 40 times the company’s annual sales, which is extremely high by any standard. The business is still in a heavy investment phase, and profits and free cash flow remain limited.

As a result, the share price is being driven far more by future expectations than by past financial results.

What the chart is telling us

The stock is trading well above its long-term moving averages, and the relative strength index (RSI) is around the mid-70s, which usually signals overbought conditions. That does not mean the share price will fall straight away, but it does suggest the risk of a pullback is rising.

The short-term support sits around $3.90, with stronger support closer to $2.70. On the upside, the recent highs near $4.50 to $5 act as a key resistance zone.

Droneshield also carries a high beta, meaning it tends to move more sharply than the broader market in both directions.

Foolish bottom line

There is no doubt that Droneshield operates in a fast-growing and strategically important area. Demand for counter-drone technology is rising globally, with growing interest from governments supporting the long-term opportunity.

That said, the stock now reflects a very optimistic future. With a near $4 billion valuation and relatively modest current sales, expectations are sky-high.

If contract wins and revenue growth do not accelerate at a faster pace, the share price could struggle to justify its current level.

The post Up 555% in a year. Is Droneshield the ASX’s hottest stock or the riskiest? appeared first on The Motley Fool Australia.

More reading

• Why Capstone Copper, Catalyst Metals, DroneShield, and Wildcat shares are rising today
• Here are the top 10 ASX 200 shares today
• What’s next for the best-performing ASX 200 stock of 2025?
• Why I think CSL and DroneShield shares are buys for 2026
• Are these ASX 200 shares a buy after yesterday’s sell off?

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 DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

US stocks have been on an amazing trajectory for three years, and top broker Morgan Stanley thinks there is more growth to come.

In its 2026 investment outlook, Morgan Stanley tips the S&P 500 Index (SP: .INX) to rise to 7,800 points by the end of the new year.

The S&P 500 closed at 6,944.47 points overnight, so the broker’s tip equates to a potential gain of 12% this year.

Serena Tang, Morgan Stanley’s Chief Global Cross-Asset Strategist, says:

There will be some bumps along the way, but we believe that the bull market is intact.

Many Aussie investors have exposure to US stocks through ASX exchange-traded funds (ETFs).

ASX ETFs are handy investment instruments, providing access to a basket of stocks in one trade for a low ongoing management fee.

Here are three examples of ETFs providing exposure to US stocks.

3 ASX ETFs invested in US stocks

iShares Core S&P 500 AUD ETF (ASX: IVV)

The IVV ETF tracks the US benchmark S&P 500, which tracks the performance of the 500 largest US companies by market capitalisation.

This provides good diversification across large caps, mid caps, and small caps, however, the big tech companies do dominate the index.

Sector representation includes 34% tech shares, 13% financials, and 11% communications.

The biggest holdings are Nvidia Corp (NASDAQ: NVDA) 8%, Apple Inc (NASDAQ: AAPL) 7%, and Microsoft Corp (NASDAQ: MSFT) 6%.

Since inception in 2000, this ASX ETF’s total returns have averaged 8.17% per annum.

In 2025, the total return was 17.88%, however, this was eroded by the stronger Australian dollar to 10.13%, as we explain here.

The management expense ratio (MER) is 0.03%.

Global X Fang+ ETF (ASX: FANG)

The Global X Fang+ ETF tracks the NYSE FANG+ Index.

This ASX ETF only invests in 10 US stocks, including six of the Magnificent Seven, plus Crowdstrike Holdings Inc (NASDAQ: CRWD), Netflix Inc (NASDAQ: NFLX), Broadcom Inc (NASDAQ: AVGO), and Palantir Technologies Inc (NASDAQ: PLTR).

Its sector representation is 60% technology, 30% communication services, and 11% consumer discretionary.

The biggest holdings are Alphabet Inc Class A (NASDAQ: GOOGL) 11%, Nvidia 11%, and Amazon.com, Inc. (NASDAQ: AMZN) 11%.

Since its inception in 2020, the Fang+ ETF’s total returns have averaged 29.5% per annum. In 2025, it returned 12.1%.

The MER is 0.35%.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

VGS ETF tracks the MSCI World ex-Australia (with net dividends reinvested) AUD Index.

The VGS ETF focuses on large companies with global earnings bases.

It is exposed to 1,284 shares, and about 70% are US stocks.

Sector representation includes 28% technology, 16% financials, and 11% industrials.

The biggest holdings are Nvidia 5%, Apple 5%, and Microsoft 4%.

Since this ASX ETF’s inception in 2014, the total returns have averaged 13.6% per annum.

In 2025, the ETF returned 13.4% in AUD terms.

Its MER is 0.18%.

The post Morgan Stanley tips 12% upside for US stocks in 2026. Here are 3 ASX ETFs offering exposure appeared first on The Motley Fool Australia.

More reading

• My simple 5-share ASX retirement portfolio
• I would put $10,000 of my savings into these ETFs
• Investing in the VanEck International Quality ETF (QUAL)? Here’s what you’re really buying
• Investing in the Vangaurd International Shares ETF (VGS)? Here’s what you’re really buying
• 1 Vanguard ETF I’m buying in 2026 and holding forever

Motley Fool contributor Bronwyn Allen has positions in Vanguard Msci Index International Shares ETF and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, CrowdStrike, Microsoft, Netflix, Nvidia, Palantir Technologies, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom 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 Alphabet, Amazon, Apple, CrowdStrike, Microsoft, Netflix, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When it comes to building a retirement portfolio, I don’t think complexity is your friend.

What I look for instead is a mix of reliable income, defensive earnings, and enough growth exposure to help protect purchasing power over time. You don’t need dozens of holdings to achieve that. In fact, I think a small, carefully chosen group of investments can do the job just as well.

If I were putting together a simple retirement-style portfolio today, these are the five ASX shares I would use.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Income sits at the heart of most retirement portfolios, and that’s why I like starting with the Vanguard Australian Shares High Yield ETF.

This ETF focuses on Australian shares with higher forecast dividend yields, which means it naturally tilts toward mature, cash-generative businesses. Banks, infrastructure stocks, and large industrials tend to feature heavily, which suits an income-focused strategy. This currently includes Commonwealth Bank of Australia (ASX: CBA), APA Group (ASX: APA), and BHP Group Ltd (ASX: BHP).

What I like about the Vanguard Australian Shares High Yield ETF is that it provides diversification and isn’t relying on a single company to deliver income. Dividends can move around from year to year, but spreading that risk across a portfolio of high-yield shares makes the income stream more resilient over time.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Even in retirement, I don’t think it’s wise to rely solely on the Australian market.

The Vanguard MSCI Index International Shares ETF provides exposure to around 1,300 companies across developed markets outside Australia.

The key role the VGS ETF plays in this portfolio is growth and diversification. Australian shares are heavily weighted toward banks and resources. Global markets offer far greater exposure to technology, healthcare, and global consumer brands.

While the income from this ETF is much lower, its purpose here is long-term capital growth. That growth can help offset inflation and support portfolio longevity across a long retirement.

Transurban Group (ASX: TCL)

For individual shares, Transurban Group is one of my core income picks.

Toll roads are about as predictable as infrastructure assets get. Population growth, urban congestion, and daily commuting all support long-term traffic volumes. People may not love paying tolls, but they keep using the roads because the time savings make it worth it.

Transurban has guided to lift its distribution to 69 cents per share in FY26, up from 65 cents in FY25. At current prices, that equates to a distribution yield of around 5%. Importantly, those distributions are backed by long-dated concession assets and inflation-linked pricing.

For me, Transurban provides dependable income with defensive characteristics that suit a retirement portfolio well.

Telstra Group Ltd (ASX: TLS)

Telstra Group earns its place as another defensive income anchor.

Telecommunications are an essential service, and Telstra’s scale gives it a strong position across mobile, broadband, and enterprise services. While it isn’t a high-growth business, it does generate steady cash flow.

Telstra’s fully-franked dividend yield of around 3.9% adds income reliability, while its infrastructure assets and mobile leadership provide resilience through different economic conditions.

In a retirement portfolio, I value that consistency more than excitement.

Wesfarmers Ltd (ASX: WES)

The final holding is Wesfarmers, which adds quality and balance to the portfolio.

Wesfarmers owns a collection of leading Australian businesses, including Bunnings, Kmart, Officeworks, and Priceline. These are value brands that tend to hold up reasonably well even when consumer conditions soften.

While Wesfarmers is not the highest-yielding stock on the ASX, it has a strong history of disciplined capital allocation, balance sheet strength, and dividend growth over time. I see it as a stabiliser that also offers some long-term growth.

Why this portfolio works for retirement

This five-investment portfolio combines income, diversification, and quality without unnecessary complexity.

The VHY ETF and Transurban do the heavy lifting on income. Telstra adds defensive cash flow. Wesfarmers provides resilience and long-term compounding. The VGS ETF brings global diversification and growth.

It’s not designed to shoot the lights out. Instead, it’s built to generate reliable income while preserving and gradually growing capital across retirement.

The post My simple 5-share ASX retirement portfolio appeared first on The Motley Fool Australia.

More reading

• Morgan Stanley tips 12% upside for US stocks in 2026. Here are 3 ASX ETFs offering exposure
• I would put $10,000 of my savings into these ETFs
• These ASX shares won big last year and are still excellent buys for 2026
• Investing in the VanEck International Quality ETF (QUAL)? Here’s what you’re really buying
• How to turn ASX dividends into long-term wealth

Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia, Transurban Group, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group, Telstra Group, and Transurban Group. The Motley Fool Australia has recommended BHP Group, Vanguard Australian Shares High Yield ETF, Vanguard Msci Index International Shares ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.