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

It seems the artificial intelligence (AI) race has escalated once again following President Donald Trump’s announcement that he has issued an executive order to launch Project Genesis. The administration compared its significance to the famous Manhattan Project, the World War 2 initiative to develop the atomic bomb. 

Project Genesis aims to develop an artificial intelligence platform utilizing supercomputers and data from various government agencies to accelerate America’s efforts in advanced manufacturing, national security, and other key areas. While it’s still early and the executive order didn’t detail any specific funding, a federal AI initiative makes it all the more likely that the leading technology companies will continue to benefit from strong AI tailwinds that have made them such lucrative investments over the past few years.

Here are the top AI stocks to buy right now. 

1. Alphabet

Google’s parent company Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) surged recently following the release of its well-received AI model, Gemini 3. Notably, Alphabet trained Gemini 3 on its own Tensor Processing Unit (TPU) chips, which are purpose-built for its machine-learning workloads. Alphabet’s TPUs have gained enough attention that Meta Platforms is reportedly considering implementing them in its data centers.

Alphabet’s stock has soared over the past few weeks as the market recognized that it owns all the components of an AI ecosystem, including data centers, AI models, a cloud platform, and vast amounts of user data to train its models. Despite the stock’s hot momentum, it’s still trading at a reasonable price/earnings-to-growth ratio (PEG) of 1.8, a solid buying point for long-term investors today.

2. Nvidia

As the current leader in AI chip technology, Nvidia (NASDAQ: NVDA) has enjoyed a significant market share in the data center chip market, estimated to be as high as 92%. The company probably doesn’t like seeing reports that its customers (Meta Platforms) are looking at other chips. However, Project Genesis is the latest signal that the AI market will ultimately be massive, perhaps too large for any single company to supply all the chips.

Nvidia’s cutting-edge graphics processing units (GPUs) and CUDA programming arguably make it the fundamental AI company, as virtually every AI hyperscaler is using its chips. Nvidia will also likely receive numerous opportunities as the government ramps up its AI plans.

Eventually, Nvidia could expand beyond data centers into other AI applications, such as robotics and autonomous driving. It already has its eyes on both industries.

3. Taiwan Semiconductor

Which company is fabricating all of these AI chips? It’s probably Taiwan Semiconductor (NYSE: TSM), the world’s leading foundry (a company that manufactures chips). Taiwan Semiconductor’s advanced manufacturing technology and capacity to produce mass quantities of high-end chips have enabled it to increase its market share in the AI era.

Today, Taiwan Semiconductor accounts for approximately 71% of the global foundry services market, measured as revenue share. Considering AI’s thirst for computing power and the fact that all chip roads essentially lead to Taiwan Semiconductor, it’s basically the ultimate pick-and-shovel AI play. The stock’s PEG ratio of 1 is enticing for buyers.

4. Amazon

E-commerce giant Amazon (NASDAQ: AMZN) is a sneaky AI stock because it also operates the world’s largest cloud computing platform in Amazon Web Services (AWS). AI, like most software today, runs in the cloud, giving Amazon a front-row seat to the AI growth opportunity. It has also developed a close partnership with Anthropic, one of the leading AI developers and a potential benefactor of Project Genesis.

Amazon and Anthropic just launched one of the world’s largest AI chip clusters, which will have nearly 1 million of Amazon’s custom AI chips by the end of this year. It could be a preview of what’s to come as the government invests in AI infrastructure.

Much of this AI demand could flow to AWS, producing a windfall for Amazon. The stock is attractively priced now, with a PEG ratio below 1.6.

5. Microsoft

Diversified tech-giant Microsoft (NASDAQ: MSFT) operates Azure, the world’s second-leading cloud computing platform. However, investors may want to own Microsoft for its close ties with OpenAI, the leading AI developer behind ChatGPT. Many view OpenAI as an AI pioneer, so it’s hard to see Project Genesis not producing opportunities for OpenAI along the way.

Microsoft is tied to OpenAI through 2032 via a newly announced agreement, and the two companies are pooling their knowledge and resources to develop custom AI chips. Microsoft’s large size and diverse businesses probably make it the slow-and-steady name on this list.

That may not be a bad thing, considering how unpredictable the AI boom has already proven to be. The company’s PEG ratio of 1.8 is a reasonable valuation to pay for the stock.

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

The post What are the 5 top artificial intelligence (AI) stocks to buy right now? 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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Justin Pope has positions in Alphabet. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) shares are pushing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $151.64. In morning trade on Tuesday, shares are swapping hands for $152.26 apiece, up 0.4%.

For some context, the ASX 200 is up 0.4% at this same time.

After a stellar 20-month run, which saw CBA shares gain 90% between October 2023 and June this year, the ASX 200 bank stock has come under selling pressure since notching its $191.40 a share record closing high on 25 June.

But with inflation in Australia on the rise again, economists are now increasingly expecting that rather than delivering two more cuts this cycle, the Reserve Bank of Australia may be forced to increase interest rates in 2026 from the current 3.60%.

That could benefit CommBank and its rivals by enabling them to improve their net interest margin (NIM). But, depending on the impact to households and businesses, it could also increase bad debts and see a reduction in borrowing.

So, what’s an investor to do?

CBA shares: Buy, hold or sell?

Despite the recent pull back in the share price, it’s still hard to find analysts that believe CBA shares present good value at their current levels.

Medallion Financial Group’s Stuart Bromley, for one, has a sell recommendation on Australia’s biggest bank (courtesy of The Bull).

“While the CBA remains a solid business over the long term, the share price looks expensive at current levels,” Bromley said.

“Recently trading on a price/earnings ratio of about 25 times and a modest dividend yield of about 3.15%, its valuation sits well above global peers,” he added.

And Bromley pointed to CBA’s poorly received first quarter (Q1 FY 2026) as reason for concern. He noted:

Also, the company recently suffered its worst sell-off in four years following the release of first quarter results in fiscal year 2026, which flagged higher operating costs, a weaker net interest margin (NIM) and a lower-than-expected common equity tier 1 capital ratio of 11.8%, which is still above the Australia Prudential Regulation Authority minimum of 10.25%.

But don’t sell your CBA shares just yet, counters Red Leaf Securities’ John Athanasiou (also in The Bull).

“CBA remains a high quality, profitable bank with strong capital ratios and a solid dividend, providing stability in a competitive sector,” said Athanasiou, who has a hold recommendation on the ASX 200 bank stock.

As for the spectre of rising interest rates in Australia, he added:

Upside is limited by an expensive valuation, margin pressure and economic risks, including elevated household debt and potential loan defaults. Retail and lending growth may slow amid a cooling housing market and possible rising interest rates. Fundamentals are intact, but these headwinds suggest caution.

Athanasiou concluded, “Holding CBA provides exposure to reliable earnings and dividends. We suggest investors monitor credit conditions and market trends.”

As for that passive income, CBA shares delivered $4.85 in fully franked dividends over the past 12 months.

The post Are CBA shares a good buy amid rising interest rates? 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.

The share price of this ASX-listed stock has increased by 44% this year. That makes Orica Ltd (ASX: ORI) one of the top-performing shares on the S&P/ASX 200 Index (ASX: XJO) in 2025.

For some context, the ASX 200 is up 1.4% over the same period.

The rise of the shares in the mining and infrastructure solutions provider has been a consistent one. In the past six months, the ASX stock added 27% value to the share price, while in the past month, it has gained another 7.2%.

Shares in the ASX 200 stock trade for $23.92 apiece at the time of writing.

Strategic chemicals acquisitions

All the signals seem to be on green for Orica. The $11 billion ASX stock is a global mining services company and operates in more than 100 countries. It specialises in the manufacture and supply of commercial explosives, (digital) blasting systems, mining chemicals, and mine optimisation technologies.

The Melbourne-based business has shifted from being a pure explosives supplier to a broader, more diversified provider. Strategic acquisitions in specialty chemicals businesses and the roll-out of digital blasting platforms are generating higher-margin, repeatable revenue rather than one-off explosives sales.

On 13 November, the mining services company reported its highest profit in 13 years, reporting EBIT of $992 million and strong growth across all segments. In FY 2026, the ASX stock expects further EBIT growth across the three divisions. The Orica board is focusing on margin, product mix, and commercial discipline in Blasting, while anticipating higher adoption and recurring revenue in Digital Solutions.

Record dividend payout

Another reason why this ASX stock has been popular this year is its improving dividend policy. Orica recently rewarded shareholders with a final dividend of 32 cents per share, taking the full-year payout to 57 cents. That’s up 21% from last year’s 47 cents. This total payout yields a dividend of 2.2% for the ASX stock.

That’s the highest annual dividend since 2012 and a sign that management is confident in the company’s cash generation and outlook. Management also increased the ongoing share buy-back program by $100 million, bringing the total value of the program to $500 million.

Broadly bullish

Analyst sentiment is broadly bullish on the ASX stock. According to aggregated estimates, the 12-month price target range spans roughly from $22.30 to $29.80.

Broker Ord Minnett recently upgraded its price target to $26 and raised EPS estimates. This updated price target indicates an upside of 9.1%. 

It has also maintained its buy recommendation. Ord Minnett notes: 

Post the result, we have raised our EPS estimates by 2.1%, 2.3% and 8.5% for FY26, FY27 and FY28, respectively, to incorporate higher earnings assumptions for the specialty chemicals and blasting solutions divisions, which leads us to raise our target price to $26.00 from $23.00.

The post How much higher can this explosive ASX stock go? 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 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.

Corporate Travel Management Ltd (ASX: CTD) shares have been out of action for some time now.

Unfortunately, it looks like they will remain suspended until at least the end of the year.

When they do return to action, should you be buying them? Let’s see what Macquarie Group Ltd (ASX: MQG) is saying about the corporate travel specialist.

What is the broker saying about Corporate Travel Management shares?

Macquarie notes that a forensic review of the company’s accounts is taking place. So far, it has found significant items that will need to be refunded to certain customers. As it is unknown just how much will need to be refunded, the broker points out that there are risks to consider. It said:

Refunds. CTD has begun reviewing impacted customers to determine refund amounts for Concluded Customer Contracts, with the process ongoing into 2026 and no amount specified yet.

Cash impact. The cash impact of refunds and prior year adjustments is still unquantified and remains a downside risk to future earnings and valuation. As of 31-Oct-25, CTD’s cash is >A$148.3m (including A$18.2m restricted), with no debt drawn.

There are also significant restatements that will be undertaken. It said:

Significant restatements are required to reverse up to £58.2m of previously recognised revenue for Concluded Customer Contracts in FY23-24, also resulting in financial liabilities for any customer refunds.

FY25 impact. FY25 revenue reversal adjustments of up to £19.4m are expected due to refunds and contractual uncertainty, with previous FY25 guidance from May-25 now withdrawn. CTD will also book additional provisions of A$13.9m in FY25 for expected credit losses on 2022-24 ANZ receivables (unrelated to European issues).

Should you invest?

In light of the above, the broker has downgraded Corporate Travel Management shares to an underperform rating with a heavily reduced price target of $11.50.

Based on its last traded price of $16.07, this implies potential downside of 28% for investors over the next 12 months.

Commenting on its downgrade, Macquarie said:

Today’s new details significantly increase uncertainty about the impact of accounting issues and customer overcharging on CTD’s operations, which we need to reflect in our val. and rec., hence we downgrade to Underperform (from Neutral).

Catalysts: Finalisation of review & accounts, reinstated to ASX, customer retention. Downside risks: potential ASX 200 removal, loss of existing customers & tenders, higher cash outflows, extra costs post review.

The post What does Macquarie think Corporate Travel Management shares are worth? 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 Corporate Travel Management and Macquarie Group. The Motley Fool Australia has positions in and has recommended Corporate Travel Management and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) shares are higher on Tuesday at 8,599.7 points, up 0.4%.

Over the year, ASX 200 consumer discretionary shares have underperformed the broader market.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has risen 3.68% versus 4.69% for the benchmark index.

Let’s take a look at the latest ratings and 12-month price targets on the three largest ASX 200 consumer discretionary stocks.

ASX 200 consumer discretionary shares: Buy, hold, or sell?

Here’s what the analysts at Morgans think of these sector leaders.

1. Wesfarmers Ltd (ASX: WES)

Wesfarmers is the largest ASX 200 consumer discretionary share with a market capitalisation of $93 billion.

The Wesfarmers share price is $81.51, down 0.6% on Tuesday and up 14% in the year to date.

In a recent trading update, Wesfarmers said consumers remained cautious amid higher prices and paused interest rate cuts.

The company noted good sales momentum for Bunnings, Kmart Group, and Officeworks but flagged that 1H FY26 earnings for Officeworks will be impacted by lower operating margins and restructuring costs.

Morgans said:

WES is also experiencing pressure across its divisions in relation to supply chain, labour, energy, and regulatory costs. On the back of the trading update, we decrease FY26-28F group EBIT by 1%, largely due to downgrades to Officeworks earnings forecasts.

While we continue to view WES as a core long-term portfolio holding with a diversified group of well-known retail and industrial brands, a healthy balance sheet, and an experienced leadership team with a strong track record of growth, trading on 35x FY26F PE we see the stock as overvalued in the short term.

The broker maintained a trim rating on Wesfarmers and cut its share price target from $83.20 to $79.30.

2. Aristocrat Leisure Ltd (ASX: ALL)

Aristocrat is the second-largest ASX 200 consumer discretionary share with a market cap of $36 billion.

The Aristocrat share price is $57.99, down 0.7% today and down 16% for 2025.

Aristocrat released its FY25 results last month. The company reported an 11% increase in revenue to $6,297 million.

Morgans commented:

Headline numbers were broadly in line with both our and market expectations, though a few soft spots emerged beneath the surface.

Interactive (online casino-style games) was weaker than expected and punished, given it’s a smaller, faster growing segment, core to longer-term growth plans. Gaming Operations in North America (NA) were also soft, with only 4.1k net adds and lower-than-expected fee-per-day metrics weighing on performance.

Encouragingly, management expects the business to return to its normalised growth range moving forward.

Morgans raised its rating on Aristocrat shares from accumulate to buy but reduced its 12-month price target from $77 to $73.

3. Light & Wonder Inc. CDI (ASX: LNW)

Light & Wonder is the third-largest ASX 200 consumer discretionary share with a market cap of $12 billion.

The Light & Wonder share price is $150.49, down 1.5% on Tuesday and up 8% in the year to date.

Morgans said Light & Wonder delivered a strong 3Q FY25 result that alleviated market concerns about FY25 guidance delivery.

The broker said:

LNW delivered record margin expansion across all three segments, with iGaming operating leverage the standout performer, while land-based margins surprised on favourable product mix as Grover scales and premium installed base momentum continues.

Morgans has a buy rating on Light & Wonder shares with a price target of $175.

The post Here’s how Morgans rates the 3 biggest ASX 200 consumer discretionary shares appeared first on The Motley Fool Australia.

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

Uranium project developer Deep Yellow Ltd (ASX: DYL) has named a former Rio Tinto Ltd (ASX: RIO) executive as its new managing director, as the company moves towards making a decision to go ahead with its flagship project in Namibia.

Deep Yellow shares plummeted in October when the company announced that its long-term managing director, John Borshoff, would step down from his role.

Market shocked by exec’s departure

The company’s shares fell more than 10% on the day of the announcement, dipping below $2 per share on the day, and have been trading at levels around $1.60 ever since.

Mr Borshoff is a leading light in the uranium sector, having founded Paladin Energy Ltd (ASX: PDN), which he helped build into a multi-mine uranium producer.

Mr Borshoff left Paladin in 2015, joining Deep Yellow in October of 2016.

His decision to leave Deep Yellow sparked a global search for a new leader, with the company announcing on Tuesday that it had appointed Greg Field as managing director, effective May 1.

New boss well-credentialled 

The company said in a statement to the ASX that Mr Field had strong project development experience.

A qualified mining engineer, Mr Field was previously managing director – project development at Rio Tinto. Over a 29-year career in the resources sector, Mr Field has gained extensive experience across operations and project studies, and significantly, he has extensive experience of both brownfield and greenfield capital project execution.

The company said that during his time at Rio, Mr Field delivered a number of major projects and studies across various commodities, including diamonds, copper, aluminium, and lithium.

His execution capability spans large-scale developments such as the US$7 billion Oyu Tolgoi underground project, as well as smaller technically complex processing facilities including the US$400 million Rincon DLE plant in Argentina and the US$1.3 billion AP60 Aluminium smelter in Quebec.

Deep Yellow itself is at a crucial phase of its flagship project’s development, with the company poised to make a final investment decision on its long-life Tumas project in Namibia.

The company announced in October that there was potential to extend the project’s life beyond its current 30-year mine plan, following positive drilling results at the S-Bend prospect within the project.

Deep Yellow has delayed making a final decision to go ahead with the project while it waits for the uranium market to recover.

Mr Field said he was convinced Deep Yellow had a significant role to play in bringing new uranium supplies to the market.

I believe uranium has a key role to play in the global transition to clean energy, and Deep Yellow is uniquely positioned to contribute to that shift. I have been impressed by the depth of experience within the Deep Yellow team and the progress achieved on the Tumas Project. I am fully aligned with the Company’s strategy, and with two execution ready projects in Tumas and Mulga Rock, the Company is well-positioned to capture the upside potential of the market and deliver long-term value to shareholders.

Deep Yellow was valued at $1.56 billion at the close of trade on Monday.

The post Uranium company taps former Rio Tinto exec as new managing director 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.

You might assume that you need a high income to build real wealth with ASX shares.

But the truth is far more encouraging. With patience and the power of compounding, even $50 a week can grow into a six-figure investment portfolio over time.

The best part is that you don’t need to time the market, nor do you need to pick the next big winner.

To achieve this goal, you simply need a long-term mindset and the discipline to stick with the plan.

Here’s how it works.

Starting with $50

Fifty dollars a week may not sound like much. That is just $7.14 a day, which is less than the cost of a matcha in Bondi or some takeaway coffees. But when you invest that amount every week, year after year, it begins to build serious momentum.

Consistency is the key. Whether the market goes up, down, or sideways, you keep investing. This is what spreads your risk over time and helps you benefit from dollar-cost averaging, where you naturally buy more units when prices are lower and fewer when they are higher.

The power of compounding

Now for the powerful part: compounding.

If you were to invest $50 a week, or the equivalent of $220 a month, and earn an average return of 10% per year, which is roughly in line with long-term share market returns, your portfolio could grow far larger than you might expect.

For example, after 10 years your portfolio would be valued at approximately $44,000.

If you keep going for 20 years, then your portfolio would be well and truly into six figures and worth approximately $160,000.

And if you want to keep going from here, a further 5 years, bringing the total investment period to 25 years, would see your portfolio grow to approximately $275,000.

The numbers get bigger the longer you stay invested. That’s the magic of compounding, your returns start earning their own returns, and the snowball grows every year.

Keep it simple

You don’t need to take big risks. For most people, a simple mix of broad-based ASX ETFs can do the job. They offer instant diversification, low fees, and access to global companies in a single trade.

Funds like the iShares S&P 500 ETF (ASX: IVV) and the Vanguard Australian Shares Index ETF (ASX: VAS) could be worth considering.

Even if markets wobble, and they certainly will, your long-term compounding engine keeps working quietly in the background.

Foolish takeaway

Building wealth isn’t about being lucky. It is about being consistent.

If you can commit to investing just $50 a week and stay the course through market ups and downs, you could build a six-figure portfolio without needing a high salary or a huge lump sum.

The post How to turn $50 a week into a six-figure ASX share portfolio 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 iShares S&P 500 ETF. The Motley Fool Australia has recommended 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.

Collins Foods Ltd (ASX: CKF) shares are on the slide on Tuesday morning.

In morning trade, the ASX 300 stock is down almost 4% to $11.14.

This follows the release of the quick service restaurant operator’s half year results.

ASX 300 stock tumbles on results day

For the six months ended 12 October, Collins Foods reported a 6.6% increase in revenue to a record $750.3 million. This was driven by growth in Australia and Europe, which reflects an enhanced focus on operational execution and new product launches despite persistent cost of living pressures.

KFC Australia revenue was up 5% to $563.8 million, with same store sales growing 2.3%. Whereas KFC Europe revenue was up 14.6% to $162.9 million, with same store sales growth of 1.4%.

This offset a 3.9% decline in Taco Bell revenue to $23.6 million. Management advised that discussions with Taco Bell International to transition the business to new ownership are ongoing.

Growing at a quicker rate was the ASX 300 stock’s earnings. Management advised that its underlying EBITDA was up 11% over the prior corresponding period to $113.9 million. This reflects total and same store sales (SSS) growth and productivity gains.

KFC Australia underlying EBITDA was up 9.4% to $111.8 million and KFC Europe underlying EBITDA was up 19.6% to $20.4 million. Taco Bell posted a small EBITDA loss for the half.

On the bottom line, the company’s underlying net profit after tax was up 29.5% to $30.8 million.

This allowed the ASX 300 stock’s board to declare a fully franked interim dividend of 13 cents per share, which is up 18.2% on the prior corresponding period.

Management commentary

Commenting on the company’s performance, Collins Foods’ managing director and CEO, Xavier Simonet, said:

In HY26, we executed on our operational priorities by driving profitable same store sales growth and network expansion in Australia and Europe. Our teams delivered strong performance against key priorities in an environment where consumers are still grappling with cost of living challenges. The KFC brand strengthened, underpinned by improvements in brand health, compelling marketing campaigns, product innovation, and investments in everyday value initiatives.

Our business again generated very strong cash flows, which, combined with disciplined capital deployment, ensures we remain in a very strong financial position with the flexibility and capacity to invest in future growth. This was supported by the successful refinancing of Group debt facilities in September.

Outlook

The ASX 300 stock has started the second half in a positive fashion.

Management advised that sales growth in the first seven weeks of the second half continued positively, with KFC total sales up 5.3% in Australia, 5.6% in the Netherlands, and 7.8% in Germany. Same store sales growth for the same period was 3.6% in Australia, (0.5)% in the Netherlands, and 2.3% in Germany.

In light of this strong performance, management has upgraded its guidance for FY 2026. It now expects “mid to high-teens” profit growth, which is up from “low to mid-teens” growth previously.

Mr Simonet said:

Our HY26 performance was encouraging. In H2 FY26, we will again be laser focused on driving operational performance, sales and margins. We are investing in growth, through network expansion and brand modernisation in Australia, elevating the customer experience to support brand health, which is key to lifting sales. In Europe, we will balance near-term optimisation in the Netherlands with creating long-term opportunity in Germany, through profitable network development.

We are excited about the potential of this key strategic opportunity and have made progress on execution. Finally, the cash-generative nature of our business and our strong balance sheet provide us with plenty of capacity to fund organic and inorganic future growth opportunities.

The post ASX 300 stock tumbles despite strong first half profit growth and guidance upgrade appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Collins Foods. 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 Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.