The S&P/ASX 200 Index (ASX: XJO) has given back its early gains and dropped into the red. In afternoon trade, the benchmark index is down 0.4% to 8,692.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Andean Silver Ltd (ASX: ASL)

The Andean Silver share price is down 2.5% to $2.42. This follows news that the silver miner has doubled the size of its share purchase plan (SPP) due to increased demand. The SPP will now raise $6 million, but it could have been so much more. Andean Silver revealed that it received applications totalling approximately $18 million, which significantly exceeded the original $3 million target. Andean Silver’s chair, David Southam, said: “The demand for the SPP was exceptionally strong, reflecting the rapid progress we are making at the Cerro Bayo Project and our ability to unlock an abundance of opportunities to drive growth and value creation. The proceeds from the Placement and SPP will help us accelerate our drilling programs, project studies and potential land acquisitions. Andean is uniquely placed in the silver market with its significant existing infrastructure, which will help deliver a capital-light restart in the quickest and most efficient manner.”

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price is down over 2% to $156.76. This is despite there being no news out of the banking giant. However, it is worth noting that all the big four banks are sharply lower today. This could be a sign that some large investors are rotating out of the banks and into other areas.

Life360 Inc (ASX: 360)

The Life360 share price is down 2.5% to $31.18. This morning, this location technology company announced the completion of its Nativo acquisition and provided an update on its user growth. With respect to the latter, Life360 now has over 50 million monthly active users (MAU) in the United States. This is up from 48.7 million at the end of September, which may be lower than the market was expecting given its historical growth rates.

Silex Systems Ltd (ASX: SLX)

The Silex Systems share price is down 35% to $6.33. This morning, the company revealed that its joint venture business, Global Laser Enrichment, has not been selected for a US$900 million program focused on low enriched uranium by the U.S. Department of Energy (DOE). And while the company has been selected for an award of up to US$28 million from the DOE to advance next generation laser-based uranium enrichment technology, this wasn’t the award the market was hoping for.

The post Why Andean Silver, CBA, Life360, and Silex shares are dropping today appeared first on The Motley Fool Australia.

More reading

• How I’d build a growing passive income stream from ASX shares over 15 years
• Could 2026 be the year when CBA stock implodes?
• This previously hot uranium technology stock has been sold down heavily after a contract snub
• Up 38% in a year, Life360 shares sliding today on $120 million US acquisition news
• Top 5 ASX 200 tech shares for growth in 2025

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. 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) stock had a fascinating 2025.

It really was a tale of two halves when it comes to CBA’s year. The ASX 200 bank share enjoyed a highly successful six-month period between January and late June, with the notable exception of the ‘liberation day’ April wobble. Commonwealth Bank shares hit several new all-time records in the first half of last year, culminating in the still-reigning record high of $192 a share that we saw mid-year.

But one June was over, CBA’s momentum stalled. The bank spent the back half of 2025 drifting away from that high, finally getting down to just above $151 a share by mid-November.

CBA stock recovered a little by the time New Year’s Eve came around, though, ending the year at $160.57 a share.

Even so, that’s a good 16% or so away from that June all-time high. The bank’s highs still more than offset the late-year drift in 2025, with CBA recording a 4.78% gain for the year. That’s quite a contrast to the bank’s far more lucrative 2024. That year saw CBA stock gain almost 40%.

But we are in 2026 now. So what might this year hold in store for this ASX 200 bank share? Could 2026 finally be the year that CBA stock implodes, as many experts have been predicting?

Will CBA stock implode in 2026?

Of course, no one knows how a stock might fare over the coming year. There are an infinite number of possibilities, and picking the one that will eventuate is, at best, a fiendishly difficult task for even a seasoned professional.

But that doesn’t mean we can’t delve into the field of educated guesswork.

Let’s look at the facts. As we discussed last month, CBA stock is incontestably expensive by global bank standards. Today, it sports a price-to-earnings (P/E) ratio of 26.9. That’s despite low single-digit earnings growth over FY2025, and with no tangible signs of an improvement going forward.

Put simply, CBA’s shares have banked a 50% gain over the past three years without corresponding profit growth. That leaves the bank vulnerable to a share price correction.

That could either come in the form of a sharp implosion, or a gradual stagnation that occurs over a number of years. That latter scenario is similar to what CSL Ltd (ASX: CSL) has experienced since 2020. Given CBA’s sheer size (gifting it the right to soak up massive amounts of index fund and superannuation capital), I think this is the most likely scenario.

So if I were a betting man, I would not put money on a dramatic CBA stock price implosion this year. However, I think CBA’s 2026 will look far more similar to its 2025 than its 2024. And that’s if it’s lucky. Let’s see what happens.

The post Could 2026 be the year when CBA stock implodes? appeared first on The Motley Fool Australia.

More reading

• Why Andean Silver, CBA, Life360, and Silex shares are dropping today
• Decade darlings – these ASX shares have provided 10 years of returns
• CBA shares returned just 4.9% last year. Should investors look elsewhere?
• Buy, hold, sell: CBA, REA Group, and Xero shares
• 5 fantastic ASX ETFs for beginners in 2026

Motley Fool contributor Sebastian Bowen 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 WAM Active Ltd (ASX: WAA) fund has announced an increased interim dividend and a new special dividend after chalking up a return of 41.4% for the year to the end of December.

The fund, which is part of well-known fund manager Geoff Wilson’s stable, will pay a fully-franked interim dividend of 3.2 cents per share, up from 3 cents previously, plus a special dividend of 1 cent per share to be paid mid-year, leading to a grossed-up dividend yield on an annualised basis of 9.3%, the fund said on Tuesday.

Historically strong figures

Mr Wilson said in a statement to the ASX that the six-month performance of the fund’s portfolio for the second half of the calendar year was “the strongest for WAM Active since inception 18 years ago”.

He went on to say:

WAM Active’s proven and flexible investment strategy, coupled with the expertise of the investment team and the dynamic portfolio construction continues to deliver excellent investment portfolio performance for shareholders.

Plenty of room to grow

WAM Active Deputy Portfolio Manager Shaun Weick said the team had been trading actively to take advantage of opportunities.

He said further:

Over the past six months, we have materially increased portfolio turnover to take advantage of the opportunities we see in the market, whilst at the same time actively managing the cash position to cushion downside exposure. In recent weeks we have seen a material shift in domestic investor sentiment as the outlook for inflation and interest rates has been reassessed higher. Accepting this adjustment, we expect the upcoming February reporting period should provide compelling trading opportunities.

Mr Weick said the WAM Active team was watching the metals markets in particular.

WAM Active has progressively rotated positioning towards precious and base metals as we believe these companies are well positioned for near term outperformance as the US continues to reduce interest rates, global growth improves and the USD moves lower. We believe this environment warrants an active approach to portfolio construction which positions the fund well. Whilst capital markets activity has generally improved this year, the performance of recent IPOs suggest caution is warranted in this respect. Overall, we remain optimistic on the outlook for markets into 2026 and are excited by the opportunities that could present over time,

WAM said the fund beat the performance of the S&P/ASX All Ordinaries Index (ASX: XAO) by 30.8% over a 12-month period.

WAM Active shares were 5.1% higher on the positive performance news on Tuesday, changing hands for $1.04 apiece.

The ex-dividend date for the interim dividend is May 15, while the ex-dividend date for the special dividend is June 17.

The post This fund has just declared a special dividend after “record outperformance” appeared first on The Motley Fool Australia.

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• Up 161% in 3 weeks, why is this surging ASX tech stock tumbling today?
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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.

The S&P/ASX 200 Index (ASX: XJO) is having a poor session on Tuesday. In afternoon trade, the benchmark index is down 0.3% to 8,703.3 points.

Four ASX shares that are bucking the trend today are listed below. Here’s why they are rising:

BlueScope Steel Ltd (ASX: BSL)

The BlueScope Steel share price is up 22% to $29.80. Investors have been buying the steel products manufacturer’s shares after it received a takeover offer. A non-binding $30.00 per share offer has been tabled from a consortium comprising SGH Ltd (ASX: SGH) and US-based Steel Dynamics (NASDAQ: STLD). This would see SGH acquire all of BlueScope’s shares and then on-sell BlueScope’s North American businesses to Steel Dynamics. BlueScope is yet to make a decision on this proposal and is considering the offer.

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 15% to $3.82. This is despite there being no news out of the counter drone technology company on Tuesday. Though, it is worth noting that drone stocks in the United States charged higher overnight. Investors may believe the US-Venezuela situation could lead to increased demand for counter drone solutions.

Monadelphous Group Ltd (ASX: MND)

The Monadelphous share price is up 2.5% to $27.68. This follows news that the diversified services company has won another contract from BHP Group Ltd (ASX: BHP). Monadelphous has been awarded a $175 million construction contract for BHP’s car dumper project located at Finucane Island in Port Hedland. The contract covers major civil, structural, mechanical, piping, and electrical works during a planned shutdown. Monadelphous’ managing director, Zoran Bebic, said: “We are pleased to build on our long-standing relationship with BHP and look forward to the safe and reliable execution of the car dumper works, following the successful delivery of the Car Dumper 3 Project at Nelson Point last year.”

SGH Ltd

The SGH share price is up 5% to $49.01. This follows news that it has made a non-binding offer to acquire BlueScope Steel. Commenting on the proposal, SGH’s managing director and CEO, Ryan Stokes, said: “We believe BlueScope’s Australian business is a strong strategic fit for SGH and we have a proven track record of driving performance improvement in domestic industrial businesses. We intend to leverage our disciplined operating model and capital allocation approach to deliver better outcomes for stakeholders.”

The post Why BlueScope, DroneShield, Monadelphous, and SGH shares are racing higher today appeared first on The Motley Fool Australia.

More reading

• Why 2025 was the year of the ASX small-cap shares
• This ASX 200 company is celebrating its second major contract win in as many months
• BlueScope shares jump 20% on takeover news
• My top 5 ASX stocks to buy in early 2026
• Monadelphous awarded $175 million BHP contract: Key details for investors

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’s parent company Motley Fool Holdings Inc. has recommended Steel Dynamics. 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.

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

Artificial intelligence (AI) stocks have been on fire in recent years. Over the past three years alone, Nvidia (NASDAQ: NVDA) has soared by a staggering 1,180%, as of this writing. In other words, if you’d invested $1,000 in Nvidia just three years ago, you’d have nearly $13,000 by today.

However, some investors are concerned that the AI sector has become a bubble poised to burst. If that’s the case, investing now could be a risky move. While nobody knows what lies ahead, here’s where investors stand on the future of AI stocks. 

Should you really invest right now?

Again, the future of any stock or industry is unknowable, at least to a degree. Even the experts can’t say where AI will be in six months or a year, and that uncertainty can be daunting.

That said, an investment’s long-term potential is far more important than any short-term volatility. So rather than asking whether an AI bubble is looming, the real question investors should ask is where AI will be in 10 or 20 years. And according to the majority of investors, the answer is promising.

Nearly two-thirds (62%) of American adults are confident that AI-focused companies will deliver strong long-term returns, according to The Motley Fool’s 2026 AI Investor Outlook Report. Among those who are already investing in AI stocks, a whopping 93% believe in the technology’s long-term potential.

But what if a bubble is around the corner? Experts emphasize that the earning potential could be worth the rough patches.

“For investors willing to weather near-term volatility, the AI transformation represents a once-in-a-generation opportunity to participate in technology that’s restructuring how the world works,” says Donato Riccio, Head of AI at The Motley Fool.

“Of course, we’ll see peaks and troughs in AI earnings cycles,” Asit Sharma, AI Stock Analyst at The Motley Fool, adds, “but the long-term potential of this market is still superior to almost any other current investment theme we can name.”

The key to protecting your portfolio

While you may not be able to avoid short-term volatility, investing in quality stocks is crucial to reap the long-term rewards. And there are some investments that may be better poised for significant growth over time.

Specifically, Sharma recommends seeking out companies building the foundations of AI technology.

“For the biggest opportunities, look to smaller semiconductor and data center ecosystem players, such as data interconnect specialists, high-bandwidth memory providers, and cutting-edge data storage designers,” he explains. “The ‘best of breed’ in these categories will likely outpace the market in the next three to five years.”

Wherever you choose to buy, be sure you’re researching the company’s fundamentals rather than relying on hype. Even weak companies can appear to thrive when the entire industry is soaring, but those stocks will struggle to bounce back after a downturn. Healthy organizations, however, are far more likely to recover from even severe volatility.

Nobody can say where AI stocks will go in 2026. We could be headed for a bubble, or the industry may have much further to climb. However, by investing in the right stocks and staying focused on the long term, you can capitalize on AI’s promising growth potential while still mitigating risks. 

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

The post Should you really invest in AI stocks in 2026? Here’s what other investors are saying 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.

More reading

• This previously hot uranium technology stock has been sold down heavily after a contract snub
• This exciting small cap ASX share just delivered its 7th consecutive record quarter
• Own ASX IOZ or other iShares ETFs? Dividends just announced!
• Up 38% in a year, Life360 shares sliding today on $120 million US acquisition news
• This might be the most underrated artificial intelligence ASX stock to own in 2026

Katie Brockman 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 Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More than half a billion dollars has been wiped off the value of uranium enrichment technology company Silex Systems Ltd (ASX: SLX) after it missed out on a major US contract.

The company said in a statement to the ASX on Tuesday that Global Laser Enrichment, which was the exclusive licensee of its uranium enrichment technology, had been selected for an award of up to US$28 million “to advance next generation laser-based uranium enrichment technology”.

Passed over for contract

While that was a positive, the licensee company was not selected for an award under a separate US$900 million program focused on “low enriched uranium”.

Silex owns a 51% stake in GLE, with major uranium producer Cameco Corporation owning the remainder.

Silex’s system utilises laser technology to enrich uranium, and the company stated in a recent investor briefing that this technology is anticipated to be lower in cost than other processes, with higher efficiency and throughput.

The company has validated the process at the pilot plant scale but has not yet deployed it on a commercial scale.

Forward plan still bright

Silex said on Tuesday it was actively pursuing the next steps to advance its Paducah Laser Enrichment Facility (PLEF) in Kentucky, “and commercial deployment of its laser enrichment technology”.

The company went on to say:

The significantly higher enrichment efficiency and throughput of the Silex technology places GLE in a very strong position relative to competitors using second generation centrifuge technology.

Silex said in terms of its path forward, it intends to “re-enrich” depleted uranium tailings from the US Department of Energy at the Paducah facility.

The company said further:

This would generate up to 5 million pounds of uranium and 2,000 metric tonnes of conversion capacity annually for up to three decades – enough domestic supply to fuel around 10% of current US nuclear reactor demand. This represents a nearly ten-fold increase in domestic natural uranium output, significantly enhancing US national energy security and fuel independence.

Silex also reaffirmed its commitment to commercialising its technology, saying it was the “world’s most advanced enrichment technology”.

The company added:

Subject to various factors, including industry and government support, a feasibility study for the PLEF, and supportive market conditions, the Silex uranium enrichment technology could become a major contributor to nuclear fuel production for the world’s current and future nuclear reactor fleet, through the production of uranium in several different forms.

Silex shares jumped on Monday, likely in anticipation of the contract announcement, but plunged more than 29% on Tuesday morning to be changing hands for $6.93.

The company was worth $2.71 billion at the close of trade on Monday.

The post This previously hot uranium technology stock has been sold down heavily after a contract snub 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 positions in and has recommended Cameco. 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.

Orthocell Ltd (ASX: OCC) shares are having a good session on Tuesday.

In morning trade, the small cap ASX share has risen 3% to $1.13.

Why is this small cap ASX share charging higher?

Investors have been buying the regenerative medicine company’s shares following the release of a quarterly update.

According to the release, the small cap ASX share achieved record quarterly revenue of $3.2 million for the three months ended 31 December 2025. This was the seventh quarter in a row of record sales and represents a 7% increase over the previous quarter and a 45.2% increase on the prior corresponding period.

Importantly, this record revenue performance was primarily driven by increased market penetration in existing markets, particularly in Australia. Approximately $90,000 in Remplir U.S. sales were generated in December, which was in line with expectations.

North America entry

Management appears to believe that it won’t be long until its US sales start to become more meaningful.

The small cap ASX share revealed that its early U.S. results indicate that its hybrid market entry strategy, combining specialist distributors with internal field leadership, is successful and delivering positive momentum.

It also notes that the anticipated growth in Remplir adoption by U.S. surgeons represents the potential for a strong increase in revenue going forward, with momentum expected to build through 2026.

In addition, growth in Remplir sales is expected to be further supported by its entry into the Canadian market. Following the recent appointment of a second Canadian distributor, initial sales are targeted for the March quarter of FY 2026. It expects market adoption to grow steadily throughout 2026.

The small cap ASX share also highlights that with $49.4 million in cash reserves, no debt, and an R&D tax incentive refund of approximately $3.0 million expected soon, it is well-positioned to drive rapid product adoption and deliver a step change in revenue in FY 2026.

Commenting on the quarter, Orthocell’s CEO and managing director, Paul Anderson, said:

The seventh consecutive record revenue result for the December quarter is particularly pleasing, driven by strong performance in existing markets and early Remplir unit sales in the U.S. Early U.S. results show our hybrid market entry strategy, combining specialist distributors with internal field leadership, is successful and delivering positive momentum. With the U.S. momentum building and Canada coming online, we see significant upside as we replicate the successful Australia and Singapore approach on a larger scale in the U.S.

The post This exciting small cap ASX share just delivered its 7th consecutive record quarter 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Orthocell. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Do you own iShares Core S&P/ASX 200 ETF (ASX: IOZ)?

Or perhaps iShares S&P/ASX 20 ETF (ASX: ILC) or iShares S&P/ASX Small Ordinaries ETF (ASX: ISO)?

BlackRock has just announced the estimated distributions (dividends) for its ASX iShares exchange-traded funds (ETFs).

BlackRock will pay its next round of dividends on 19 January.

If you own any of these ETFs and want to top up your holdings ahead of this round of payments, you’d better be quick.

The ex-dividend date is tomorrow.

How much will iShares ASX ETF investors receive?

Here are the estimated dividends that investors will receive on 19 January.

The amounts will be finalised on Thursday, which is the record date.

Prefer to reinvest your dividends?

A distribution reinvestment plan (DRP) is available for all of the ASX iShares ETFs above.

A DRP allows investors to reinvest their distributions automatically each time dividends are paid.

It’s a helpful set-and-forget option for investors seeking compounding returns over the long term.

BlackRock will be accepting DRP elections up until 5pm today.

The post Own ASX IOZ or other iShares ETFs? Dividends just announced! 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 recommended BlackRock. 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.

Life360 Inc (ASX: 360) shares are slipping today.

Shares in the S&P/ASX 200 Index (ASX: XJO) location sharing software developer closed yesterday trading for $31.97. In late morning trade on Tuesday, shares are swapping hands for $31.31 apiece, down 2.1%.

For some context, the ASX 200 is up 0.1% at this same time.

Here’s what’s happening.

Life360 shares slip on completed acquisition

Before market open this morning, Life360 announced that it has completed the acquisition of United States-based advertising technology company Nativo for around $120 million. This sum is comprised of 65% in cash and 35% in Life360 shares.

The company said the acquisition will help brands reach families with more relevant messages in more relevant places. And not just inside the Life360 app, but also across connected TV, mobile, and premium digital environments.

Life360 now has more than 50 million monthly active users (MAU) in the US. The company highlighted that this is in line with some of the US most popular media platforms, including Netflix Inc (NASDAQ: NFLX), Spotify Technology (NYSE: SPOT), and Pinterest Inc (NYSE: PINS).

Life360 shares could garner longer-term support as the company continues to expand its operations beyond its primary family connection and safety business and taps into more advertising revenue.

The ASX 200 tech stock noted that the acquisition of Nativo extends its insights into how families move, offering advertisers a single system for targeting creative messages.

What did management say?

Commenting on the completed acquisition that has yet to boost Life360 shares today, CEO Lauren Antonoff said, “Surpassing 50 million monthly active users in the US is a significant milestone that speaks to the trust families place in Life360.”

Antonoff added:

Families make countless decisions every day as they move through the world, and this partnership helps brands show up in those moments with relevance and respect. Together with Nativo, we’re building a differentiated advertising platform that connects brands to real families, in real moments, with real results.

Justin Choi, founder and CEO of Nativo, said that combining Life360’s “incredibly rich and accurate first-party insights” with Nativo’s platform “activates them in a way that rivals the advertising superpowers of the leading social media networks, while cultivating transparent, brand-safe, and meaningful connections to families”.

Choi concluded, “Nativo’s ad technology is purpose-built to unlock this opportunity in a way that enhances the user experience for Life360’s members.”

At the current Life360 share price, the company commands a market cap of AU$7.3 billion, well below that of the major US social media networks.

The post Up 38% in a year, Life360 shares sliding today on $120 million US acquisition news appeared first on The Motley Fool Australia.

More reading

• Top 5 ASX 200 tech shares for growth in 2025
• 3 ASX 200 growth shares to buy and hold for 10 years
• Why Capstone Copper, Life360, Northern Star, and Weebit Nano shares are falling today
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• 10 ASX shares I would buy in 2026

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 Life360, Netflix, Pinterest, and Spotify Technology. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool Australia has recommended Netflix and Pinterest. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When investors think about artificial intelligence (AI), they often picture chipmakers, software developers, or companies training large language models. What tends to get overlooked are the businesses that make AI work at scale. These are the infrastructure providers that connect data, compute, and users in real time.

That’s why I think Megaport Ltd (ASX: MP1) could be one of the most underrated AI stocks on the ASX in 2026.

Megaport isn’t building AI models. Instead, it provides the digital plumbing that allows AI workloads to function efficiently, and that role is becoming increasingly important.

AI demand is an infrastructure problem

Artificial intelligence is incredibly data-intensive. Training models, running inference, and moving large datasets between clouds and data centres all require fast, reliable, and flexible connectivity. This is where Megaport comes in.

The company operates a network-as-a-service platform that allows customers to dynamically connect to cloud providers, data centres, and enterprise networks on demand. Rather than relying on fixed, long-term contracts, customers can scale bandwidth up or down as their needs change.

As AI workloads grow more complex and distributed, that flexibility becomes a competitive advantage.

Expanding beyond connectivity

What makes the Megaport story more interesting is that it’s no longer just about connectivity.

The company has expanded its product offering to include compute through its newly acquired Latitude platform, which provides dedicated infrastructure designed for high-performance workloads.

This broadens Megaport’s role from simply moving data to helping customers process it more efficiently.

Importantly, this expansion builds on Megaport’s existing customer base and network footprint, rather than requiring an entirely new go-to-market strategy. Customers who already rely on Megaport for connectivity can now access additional infrastructure services within the same ecosystem.

That kind of expansion increases wallet share and deepens customer relationships, which is a key ingredient for long-term growth.

A large and growing end market

AI isn’t a short-term trend, and neither is the demand for the infrastructure that supports it.

Data volumes continue to rise, cloud architectures are becoming more complex, and enterprises are looking for ways to optimise performance while managing costs.

Infrastructure models that sit between traditional on-premise systems and public cloud, offering flexibility without excessive overhead, are increasingly relevant.

Megaport’s platform is designed specifically for this environment. While it may not attract the same attention as more obvious AI plays, it sits directly in the path of long-term digital infrastructure spending.

Why it’s an overlooked ASX AI stock

Part of the reason that I think Megaport feels underrated is that its role isn’t immediately obvious.

It doesn’t sell AI software. It doesn’t manufacture chips. And its revenue growth can be influenced by customer usage patterns rather than headline announcements. But that doesn’t make the opportunity any less real.

In fact, some of the best investment outcomes come from businesses that quietly become more important as industries evolve. And with this ASX AI stock down 32% since early November, now could be a good opportunity to invest.

Foolish Takeaway

Artificial intelligence needs more than algorithms to succeed. It needs infrastructure that can move, connect, and process data efficiently.

Megaport sits at the heart of cloud, connectivity, and compute, all of which are becoming more critical as AI adoption accelerates.

While it may not be the first stock investors think of when they hear “AI”, that’s exactly why I believe it could be one of the most underrated AI opportunities on the ASX in 2026.

For investors willing to look beyond the obvious, I think Megaport is a stock worth paying attention to.

The post This might be the most underrated artificial intelligence ASX stock to own in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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 Megaport. 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.