Tag: Stock pick

The shift to clean energy is creating a decade-long demand surge for copper, lithium, and iron ore. 

Australia’s big three miners sit right at the centre of it.

The world needs enormous quantities of copper, lithium, and iron ore to build wind turbines, solar panels, electric vehicles, and the grid infrastructure that ties it all together. 

Australia’s three largest miners have been reshaping their portfolios to benefit from this.

Investors who recognise that shift early could benefit handsomely.

BHP Group Ltd (ASX: BHP)

BHP has made its strategic direction clear: copper is the future. 

The company reported a 31% increase in its average realised copper price to US$5.47 per pound in its March quarter update. 

The copper price itself has been one of the standout commodity stories of 2026, climbing 27% year to date to trade above US$12,000 per tonne on the London Metal Exchange.

This has been driven by surging demand from electrification and AI data centre construction. 

BHP’s Escondida mine in Chile, the world’s largest copper operation, and its Olympic Dam asset in South Australia position it as one of the best ways to gain exposure to the copper megatrend.

Rio Tinto Ltd (ASX: RIO)

Rio Tinto has arguably made the most aggressive pivot toward energy transition metals of any major global miner. 

The company’s $6.7 billion acquisition of Arcadium Lithium immediately positioned Rio as one of the world’s largest lithium producers. 

Its Oyu Tolgoi copper mine in Mongolia is on track to become the world’s fourth largest copper operation by 2028. 

The Simandou iron ore project in Guinea shipped its first cargo in December 2025, with 2026 ramp-up targets of five to ten million tonnes marking the beginning of what will eventually become a major earnings contributor. 

Goldman Sachs and JP Morgan both noted the Arcadium acquisition as a well-timed entry into the lithium market.

Beyond that, Rio’s 60% dividend payout policy makes it attractive to income-focused investors alongside the growth story.

Fortescue Ltd (ASX: FMG)

Fortescue takes a different but no less ambitious approach to the green transition. 

The company committed to spending US$6.2 billion on decarbonisation, including a US$680 million investment to accelerate its 200-megawatt Pilbara Green Energy Project. 

The goal is net zero Scope 1 and 2 emissions across all operations by 2030, a target that would make Fortescue one of the greenest large-scale miners in the world. 

Fortescue shares have risen substantially over the past six months, reflecting both the iron ore price recovery and growing investor appreciation for its clean energy ambitions.

Foolish takeaway

BHP leads on copper scale. 

Rio brings diversification across copper and lithium. 

Fortescue bets that green iron ore production itself becomes a competitive advantage. 

For long-term investors for whom the impact of their investments is important, and who are willing to navigate commodity price volatility, all three deserve serious consideration. 

The post 3 ASX mining stocks positioned to benefit from the green transition appeared first on The Motley Fool Australia.

More reading

• Rio Tinto shares hit fresh all-time high. Can they keep going?
• Can these ASX shares hitting record highs keep climbing?
• BHP shares just hit a new all-time high. Here’s why
• BHP shares regain their market crown as CBA slides 10%
• Why Arafura, Aristocrat, BHP, and Perenti shares are racing higher today

Motley Fool contributor Mark Verhoeven 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) snapped its losing streak with a small gain. The benchmark index rose 0.1% to 8,640.7 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to rise on Friday following a solid night of trade in the United States. According to the latest SPI futures, the ASX 200 is expected to open 51 points or 0.5% higher this morning. On Wall Street, the Dow Jones was up 0.75%, the S&P 500 rose 0.75%, and the Nasdaq climbed 0.9%.

Oil prices rise

ASX 200 energy shares such as Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) will be on watch on Friday after a decent night for oil prices. According to Bloomberg, the WTI crude oil price is up 0.95% to US$102.00 a barrel and the Brent crude oil price is up 0.9% to US$106.55 a barrel. With no sign of a US-Iran peace deal being agreed, traders have been bidding oil prices higher.

Hold Graincorp shares

Graincorp Ltd (ASX: GNC) shares were out of form and sank 13% on Thursday following the release of its half-year results. The team at Bell Potter doesn’t think this is a buying opportunity. This morning, the broker has retained its hold rating with a reduced price target of $5.90 (from $6.80). It said: “Global production forecasts for 2026/27 remain at elevated levels (~2% above the 5YR avg.), suggesting ongoing tight grain trading margins. Oilseed crush margins remain strong and have the potential to be a tailwind as hedge positions rollover.”

Gold price falls

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) could have a poor finish to the week after the gold price dropped overnight. According to CNBC, the gold futures price is down 1.1% to US$4,656 an ounce. Rising oil prices appear to have spooked traders. They may believe higher inflation could increase the risk of rate hikes.

Buy Catapult shares

Catapult Sports Ltd (ASX: CAT) shares are being undervalued by the market according to analysts at Bell Potter. This morning, the broker has retained its buy rating on the sports technology company’s shares with a trimmed price target of $4.50 (from $4.75). It commented: “Catapult remains our key pick in the tech sector amongst mid cap stocks outside the S&P/ASX 100 index. We see little risk of AI disruption for the stock given its extensive proprietary data, multiple product platform and the hardware component to its solutions.”

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• ASX 200 slips as weakness spreads across the board
• Why Bapcor, Coles, Graincorp, and Xero shares are tumbling today
• Why Graincorp, Air New Zealand and Megaport shares are turning heads on Thursday
• Worley unveils new growth strategy and $300m buyback at Investor Day

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

Financial shares are underperforming this week, down 5.5%, while the S&P/ASX 200 Index (ASX: XJO) is 1.3% lower.

Let’s take a look at some newly revised ratings on three ASX financial shares.

COG Financial Services (ASX: COG)

The COG Financial Services share price closed at $1.62 yesterday, down 0.3% for the day and down 22% year-to-date (YTD).

This week, Shaw and Partners retained a buy rating on this ASX financial share with a 12-month price target of $2.45.

COG is Australia’s largest asset finance group. One of its business divisions is novated car leases and salary packaging.

In a note, the broker said COG Financial Services would benefit from the electric vehicle (EV) fringe benefits tax exemption continuing unchanged until April next year.

The broker said:

From April 2027, the full exemption will apply to vehicles priced below A$75,000, covering around 85% of EV purchases.

From April 2029, eligibility will reduce to a 25% FBT exemption for vehicles priced below the luxury car tax threshold (~A$91,000) 

COG Financial Services Limited (ASX:COG) continues to screen as very attractive, trading on a FY27 free cash flow yield of 17% and a FY27 PE of ~8x.

Our valuation implies 12.5x FY28 EPS, broadly in line with the sector’s average PE of 12.3x since 2020 despite ongoing regulatory headwinds. 

Macquarie Group Ltd (ASX: MQG)

The Macquarie share price closed at $244.53 on Thursday, up 3.3% for the day and up 20% YTD.

This week, Morgans kept a hold rating on the ASX financial share and raised its target from $223 to $248.

Morgans said:

MQG delivered a very strong FY26 result with NPAT (A$4.8bn) up +30% on the pcp and +8% above company-compiled consensus.

MQG is a quality franchise, and a proven performer, but with <10% upside to our PT, we maintain our Hold call.

Commonwealth Bank of Australia (ASX: CBA) 

The CBA share price closed at $156.42 yesterday, up 1.8% for the day and down 2.9% YTD.

It’s been a big week for CBA shares.

The CBA share price plunged 10.2% in its largest one-day fall ever,after the bank’s 3Q FY26 update on Wednesday.

Changes to negative gearing and capital gains tax announced on Tuesday night in the Federal Budget didn’t help, either.

Experts fear the changes will disincentive property investment, thereby reducing housing credit growth over time.

Morgan Stanley said there are already signs that home loan and savings deposit growth are moderating from strong levels last year.

In a note, the broker said:

We believe RBA rate hikes and higher fuel prices increase the probability that a slowdown takes hold in coming month.

This week, the broker retained its sell recommendation on CBA shares with a slightly reduced 12-month price target of $130.

The post Buy, hold, sell: COG Financial Services, Macquarie, CBA shares appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• The CBA share price crash was an accident waiting to happen. Here’s why
• Buy, hold, sell: CBA, Life360, and Macquarie shares
• Buy, hold, sell: Bega Cheese, Kogan, Macquarie shares
• Are CBA shares a buy after the latest sell-off?

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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX biotech stock EBR Systems Inc (ASX: EBR) is attracting serious attention from brokers this week. 

Fresh price targets from experts indicates this could be a rare opportunity for investors. 

The company develops implantable systems for wireless tissue stimulation. Its WiCS Wireless Cardiac Stimulation technology helps address the significant opportunity to eliminate cardiac pacing leads.

Brokers have been dropping fresh guidance on the ASX biotech stock after it secured a purchasing agreement with HCA Healthcare, one of the largest healthcare systems in the US, representing an important commercial milestone. 

What did the company report?

On Wednesday, the company released an announcement to the ASX that it has secured a purchasing agreement with HCA Healthcare, marking a significant step in the commercial rollout of its WiSE CRT System.

HCA Healthcare is one of the largest healthcare networks in the U.S., with 190 hospitals and approximately 2,500 ambulatory sites of care across 19 states.

John McCutcheon, EBR Systems’ President & Chief Executive Officer said:

Securing a purchasing agreement with HCA Healthcare is an important commercial milestone for EBR. Establishing a purchasing pathway across one of the largest healthcare networks in the U.S. supports broader commercial access for the WiSE System and builds on the momentum of our U.S. rollout. It is also a signal that WiSE reimbursement supports adoption across larger networks.

EBR is currently active in two HCA sites, St David’s Medical Center in Austin, Texas and Medical City in Fort Worth, Texas. 

According to the release, this agreement will streamline the procurement and contracting pathways for the WiSE System across HCA Healthcare hospitals. 

EBR sales reps will be able to engage directly with physicians and administrators at HCA sites to support the continued adoption of the WiSE System. 

Morgans retains its buy recommendation

Following the announcement, the team at Morgans released updated guidance on the ASX biotech stock. 

We believe the agreement not only should support more efficient procurement and contracting processes, building on US commercial momentum following strong 1Q implant growth, but also reinforce management’s recent commentary around increasing engagement with large IDNs and GPOs, which we view as critical to scaling adoption over time.

We continue to view EBR favourably given growing physician enthusiasm, expanding reimbursement support, increasing repeat utilisation and emerging evidence of institutional validation.

The broker retained its buy recommendation and $2.47 price target. 

From yesterday’s closing price of just over 59 cents, this indicates an upside potential of more than 300%. 

Morgans isn’t the only broker tipping exponential growth. 

As James Mickleboro reported yesterday, Bell Potter has also tipped 250% upside for this ASX biotech stock. 

The post With potential upside of more than 300%, is this ASX biotech the best buy on the ASX right now? appeared first on The Motley Fool Australia.

More reading

• Broker says this ASX biotech stock could rocket 250%
• What is Bell Potter’s view on this ASX small-cap following a clinical trial update?
• Is this ASX gold stock a buy, hold or sell after its quarterly results?
• Is this ASX energy stock a buy, hold or sell following quarterly results?
• Here’s why Morgans just upgraded Woolworths shares

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 ASX 200 tech sector is on its way out of a crushing 48% rout that occurred between 29 August and 30 March.

Since then, the S&P/ASX 200 Information Technology Index (ASX: XIJ) has recovered by 12%.

By comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) has risen 2.1% over the same period.

Let’s look back and see what happened to the share prices of the top 10 ASX tech shares during the downturn.

Then, let’s compare that data to the performance of BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC).

Given the popularity of exchange-traded funds (ETFs) these days, I’m curious as to whether the only ASX tech ETF tracking Australian technology shares alone provided any protection against the sector downturn.

One of the appeals of ETFs is that they represent a basket of stocks. This can reduce the impact of a large price drop in a single stock.

But what if a whole sector falls? Does the structure of ASX ETFs provide any protection for investors?

Let’s conduct a litmus test.

Top 10 ASX tech shares

As stated earlier, the S&P/ASX 200 Information Technology Index fell 48% between 29 August and 30 March, and has rebounded 12% since.

Let’s compare that to the share price falls and recoveries of the top 10 tech shares on the market.

Sector rank	ASX tech share	Share price change during rout	Share price change since 31 March
1	Xero Ltd (ASX: XRO)	-57%	+5%
2	WiseTech Global Ltd (ASX: WTC)	-64%	+0%
3	NextDC Limited (ASX: NXT)	-32%	+33%
4	TechnologyOne Ltd (ASX: TNE)	-34%	+4%
5	Codan Ltd (ASX: CDA)	+3%	+26%
6	Life360 Inc (ASX: 360)	-61%	+1%
7	Macquarie Technology Group Ltd (ASX: MAQ)	-2%	+29%
8	Megaport Ltd (ASX: MP1)	-57%	79%
9	Dicker Data Ltd (ASX: DDR)	-8%	+7%
10	Elsight Ltd (ASX: ELS)	+242%	+4%

How did ATEC ETF do?

The ATEC ETF fell 42% between 29 August and 30 March compared to the 48% drop for the S&P/ASX 200 Information Technology Index.

Since then, ATEC ETF has recovered 8% compared to a 12% lift for the ASX 200 Info Tech Index.

So, the fall was not as bad with ATEC ETF during the tech rout, but the recovery has not been as fast as the ASX 200 tech sector.

Interesting.

ATEC tracks the S&P/ASX All Technology Index (before fees and expenses).

It’s the only option for investors who want exposure to Australian technology through an ASX ETF.

However, it’s important to know that the S&P/ASX All Technology Index is different to the S&P/ASX 200 Information Technology Index.

The ASX 200 Info Tech Index is comprised of the top 200 tech companies ranked and weighted by market capitalisation.

The All Tech Index is much smaller, comprised of just 45 companies, and only 56% are technically in the tech sector.

The others are from the communications, industrials, healthcare, and financial sectors, but their operations are heavily tech-related.

For example, the largest holding in ATEC is ASX 200 industrials share, Computershare Ltd (ASX: CPU) at 10%.

The fourth biggest holding is Car Group Limited (ASX: CAR), which is a communications sector share, at 8.9%.

The owner of realestate.com.au, REA Group Ltd (ASX: REA), is the sixth biggest holding at 7.5%. REA is also a communications share.

At No. 8 is ASX 200 healthcare share Pro Medicus Ltd (ASX: PME) at 6%.

At No. 9 is another communications share, Seek Ltd (ASX: SEK) at 4.2%.

This diversity of sectors, along with the less volatile nature of ETFs, appears to have provided some protection during the tech sector rout.

The post ASX tech shares vs. ATEC ETF: How they fared during sector downturn appeared first on The Motley Fool Australia.

More reading

• Why Megaport just landed its biggest ever AI infrastructure contract
• 3 reasons I would buy Xero shares following its results
• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: CBA, Life360, and Macquarie shares
• How high does Macquarie think Codan shares will go?

Motley Fool contributor Bronwyn Allen has positions in Betashares S&P Asx Australian Technology ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Megaport, Technology One, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Dicker Data, Life360, WiseTech Global, and Xero. The Motley Fool Australia has recommended CAR Group Ltd, Pro Medicus, and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Nick Scali Ltd (ASX: NCK) shares have had a rough run in 2026.

On Thursday, the ASX 200 stock hit a 52-week low of $13.70. That leaves the furniture retailer’s share price down around 40% this year.

I can understand why some investors are cautious.

Consumer spending is under pressure, interest rates remain a key concern, and the housing market outlook has become more uncertain following the Federal Budget. Furniture is also a big-ticket category, so demand can be sensitive to household confidence.

Even so, I think Nick Scali could be a top buy at current levels for patient investors.

The valuation looks attractive

The first thing that stands out is the valuation.

According to CommSec, consensus estimates are for Nick Scali to generate earnings per share of 98.7 cents in FY26, $1.02 in FY27, and $1.13 in FY28.

Based on a share price of $13.70, that puts the stock on around 13.4 times estimated FY27 earnings.

That looks very reasonable to me for a retailer with a strong brand, high margins, a net cash balance sheet, and a long store rollout opportunity.

The dividend outlook also looks useful.

CommSec consensus estimates point to fully-franked dividends per share of 78.1 cents in FY26, 79 cents in FY27, and 84.7 cents in FY28. At $13.70 per share, that implies forecast dividend yields of around 5.7%, 5.8%, and 6.2%, respectively.

Those dividends are not guaranteed. But if Nick Scali can deliver something close to those numbers, investors would be collecting a meaningful income stream while waiting for sentiment to recover.

A strong brand in a difficult category

Furniture retail is not an easy market.

Customers can delay purchases when money is tight. Housing turnover can affect demand. Competition is always there.

But Nick Scali has spent years building a premium brand with a clear position in the market.

I think that is important because furniture is a category where trust, style, quality, and showroom experience can all influence the buying decision. The company is not simply competing on the lowest price.

The latest half-year update gives a sense of the underlying strength. In Australia and New Zealand, written sales orders rose 10.5% in the first half, while revenue increased 13.1% and gross margin improved to 65.9%.

I do not think investors need to buy the stock because of one half-year result. But those figures suggest the core ANZ business was still performing well earlier in the year despite a tougher consumer backdrop.

The UK could be the longer-term swing factor

The bigger opportunity may be offshore.

Nick Scali has been working through its UK rebranding and refurbishment program, and that has weighed on near-term performance. Store closures during the process affected revenue, and the UK business still made a loss in the first half.

But I think investors should look at what the company is trying to build.

The UK gives Nick Scali a much larger market to attack over time. The company has indicated a long-term opportunity of 60 to 70 UK stores, compared with 19 at the end of December.

There are encouraging signs. With the refurbishment program mostly complete, management said material improvements were being seen in written sales compared with the prior year. In January, total UK written sales were $6.7 million, and four Nick Scali branded stores trading on a like-for-like basis were up 32%.

That does not mean the UK expansion will be smooth. It may take time, money, and patience. But if the format works, it could become a major growth driver over the next decade.

Foolish Takeaway

This ASX 200 stock has fallen hard, and the near-term outlook is not risk-free.

Consumer spending could remain challenged, and uncertainty around housing may continue to weigh on sentiment toward furniture retailers.

But at around 13.4 times estimated FY27 earnings, with forecast dividend yields above 5%, I think a lot of caution is now reflected in the share price.

Nick Scali still has a strong brand, high margins, a net cash position, and a clear offshore growth opportunity.

For investors willing to look beyond the current weakness, I think this ASX 200 stock could be a top buy at its 52-week low.

The post Down 40%: Why this ASX 200 stock could be a top buy at a 52-week low appeared first on The Motley Fool Australia.

More reading

• 9 ASX 200 shares with renewed buy calls from the experts this week
• Brokers say these 2 ASX shares are highly undervalued — here’s why I agree
• CSL and Wesfarmers among scores of ASX shares hitting fresh 52-week lows
• 3 star ASX dividend income stocks for the rest of 2026
• Bell Potter names the best ASX dividend shares to buy

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

Megaport Ltd (ASX: MP1) announced $254 million in new contracts this week, sending its shares surging more than 35%.

This effectively reassured investors and validated Megaport’s business model.

The network solutions company announced three major new contracts through its Latitude.sh subsidiary worth a combined US$182.9 million, or approximately A$254 million in total contract value.

These wins are tied directly to the booming artificial intelligence infrastructure market. 

The share price responded immediately on the day of announcement, surging more than 35% to hit an intraday high of $13.51.

What Megaport announced

Latitude.sh secured three new GPU, CPU, network, and storage contracts across two undisclosed US-based technology customers running artificial intelligence and inference workloads. 

Two of the contracts, representing approximately 90% of the total contract value, carry 36-month initial terms. 

The third runs for 24 months. 

Together the deals generate approximately US$65.2 million, or A$90.6 million, in annualised recurring revenue once fully deployed. 

Megaport will invest approximately US$101 million in additional capital expenditure, primarily for NVIDIA GPU, compute, network, and storage hardware, with a payback period of approximately two years.

The momentum behind this

This week’s announcement does not arrive in isolation. 

Less than three weeks ago, Megaport announced a separate A$35.4 million compute and storage contract with a different US customer operating in the developer tooling and agentic AI space. 

Since Latitude.sh joined the Megaport group in November 2025, on-demand ARR from the subsidiary has grown 31% to US$58.7 million as of 25 April 2026. 

Megaport won these contracts because its Latitude.sh subsidiary combines bare metal compute and storage capabilities with Megaport’s existing global network infrastructure.

This gives customers a single, integrated platform for deploying AI workloads at scale. 

The company’s ability to offer GPU, CPU, network, and storage services under one roof, with near-instant provisioning across more than 1,100 enabled locations globally, makes it an attractive partner for fast-growing US technology companies that need scalable, secure infrastructure.

Foolish takeaway

Megaport shares remain down year to date even after this week’s extraordinary rally.

But this announcement firmly positions the company as a serious player in AI infrastructure, with locked-in recurring revenue from major US technology clients. 

For investors comfortable with technology sector volatility, this week’s news marks a significant moment in the Megaport story.

The post Why Megaport just landed its biggest ever AI infrastructure contract appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why is this ASX tech stock rocketing 35% today?
• Why Codan, Medallion, Megaport, and Mineral 260 shares are storming higher today
• Why Graincorp, Air New Zealand and Megaport shares are turning heads on Thursday
• Why Megaport shares and Xero shares are making big moves on Thursday

Motley Fool contributor Mark Verhoeven 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.

Xero Ltd (ASX: XRO) shares were sold down heavily on Thursday after the company released its FY26 results.

But while the market saw something it did not like, I still see a global software platform with a large market opportunity, improving scale, and several ways to become more valuable over time.

Here are three reasons I would buy the stock after its results.

The core business is still growing strongly

The first reason is simple: Xero is still growing at a very healthy rate.

This is not a business that has run out of room. In FY26, operating revenue increased 31% to NZ$2.8 billion, while adjusted EBITDA rose 18% to NZ$757.4 million. The company also generated free cash flow of NZ$554 million.

That combination is important. Plenty of tech companies can grow revenue quickly. Fewer can do it while also producing meaningful cash flow.

Xero also added 506,000 customers during the year, taking total customers to 4.92 million. Average revenue per user increased 23%, and annualised monthly recurring revenue rose 37% to NZ$3.3 billion.

For me, that points to a platform that is becoming more valuable as it scales.

Small businesses need accounting, payroll, payments, invoicing, compliance, and reporting tools. Xero is building deeper relationships with those customers and giving them more reasons to stay inside its ecosystem.

That is exactly the kind of software business I want to own for the long term.

The US opportunity looks more interesting

The second reason I would buy Xero shares is its growing US opportunity.

Australia and New Zealand remain strong markets for the company, but the US is where the long-term upside could be much larger.

Xero said its US momentum was strong, with revenue increasing 240%, or 30% on an organic basis excluding Melio. The Melio acquisition also gives Xero a stronger position in bill payments, helping it combine accounting and payments on one platform for US small businesses.

I think this could be a meaningful step.

The US small business market is enormous, and Xero has historically been much smaller there than in Australia, New Zealand, and the UK.

If Xero can build a stronger payments offering, improve brand awareness, and deepen its accountant and bookkeeper relationships, the US could become a much bigger contributor over time.

There is execution risk. The company is investing heavily, including extra US brand spend in FY27. Melio also needs to be integrated well.

But I think Xero is right to invest where the opportunity is largest.

AI could make Xero more useful

The third reason is artificial intelligence (AI).

I do not think investors should buy Xero simply because it mentions AI. Plenty of companies are doing that.

What interests me is that Xero has the ingredients to use AI in practical ways.

It has millions of small-business customers, years of financial data, relationships with accountants and bookkeepers, and workflows that are often repetitive and time-consuming.

That creates room for AI to improve the product rather than just sit beside it.

Xero said its JAX beta has already reconciled more than 40 million transactions with a reported accuracy of 97%. It also said customer adoption of new GenAI-specific features launched over the past 18 months reached 500,000 users.

The company has also announced XeroForce, a natural language AI agent builder designed to help accountants, bookkeepers, and small businesses automate finance and accounting tasks.

If Xero can use AI to save customers time, reduce manual work, and make the platform more valuable, I think it can strengthen its competitive position.

Foolish Takeaway

Xero shares may remain volatile after the result. But I think the sell-off has created an opportunity.

The tech stock is still growing strongly, producing free cash flow, expanding in the US, and building a more complete financial platform for small businesses.

For patient investors, I think this is the kind of ASX tech share worth buying when the market takes a short-term view.

The post 3 reasons I would buy Xero shares following its results appeared first on The Motley Fool Australia.

More reading

• Why Bapcor, Coles, Graincorp, and Xero shares are tumbling today
• Why Megaport shares and Xero shares are making big moves on Thursday
• Why Xero shares are falling despite a big jump in revenue
• Xero FY26 result: Revenue surges 31% but profit dips due to Melio acquisition costs
• 5 things to watch on the ASX 200 on Thursday

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

Long-term growth often comes from backing areas of the economy that are becoming more important over time.

That does not mean trying to predict every market move. It means finding themes with durable demand, global relevance, and enough runway to keep expanding for years.

Here are three ASX exchange traded funds (ETFs) that could appeal to growth-focused investors.

Betashares Global Cybersecurity ETF (ASX: HACK)

The first ASX ETF to look at is the Betashares Global Cybersecurity ETF.

Cybersecurity is now a core part of how businesses operate. Companies are moving more systems into the cloud, handling more customer data, and relying on digital payments, remote access, and online infrastructure.

That creates a bigger attack surface. It also means cybersecurity spending is becoming less discretionary.

This fund provides exposure to global companies involved in protecting networks, devices, identities, and data. Its holdings include Palo Alto Networks (NASDAQ: PANW), CrowdStrike (NASDAQ: CRWD), and Cisco Systems (NASDAQ: CSCO).

As cyber threats become more sophisticated, the need for security tools is unlikely to fade. This ETF offers a simple way to invest in that long-term trend.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

Another ASX ETF that could suit growth investors is the Betashares Global Robotics and Artificial Intelligence ETF.

Automation is spreading across more industries as companies look to improve productivity, reduce costs, and operate with greater precision.

This is not just about factory robots. It also includes medical robotics, industrial automation, sensors, machine vision, and artificial intelligence tools that help businesses make better decisions.

This fund gives investors exposure to companies operating across this ecosystem. Its holdings include Intuitive Surgical (NASDAQ: ISRG), Keyence, and ABB (SWX: ABBN).

As labour shortages, rising costs, and efficiency demands continue to shape business investment, automation could remain a major growth theme for years. This bodes well for the Betashares Global Robotics and Artificial Intelligence ETF.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

A third ASX ETF worth a closer look is the VanEck Video Gaming and Esports ETF.

Gaming has become one of the world’s largest entertainment markets. It now stretches across consoles, mobile devices, online platforms, cloud gaming, esports, and digital content.

This fund provides exposure to global companies involved in video game development, gaming hardware, and related technology. Its holdings include names such as Nintendo, Electronic Arts (NASDAQ: EA), and Tencent Holdings (SEHK: 700).

The industry has several ways to grow. More games are becoming live services, in-game spending continues to expand, and gaming intellectual property is increasingly being used across film, merchandise, and other media.

With entertainment continuing to move online, the VanEck Video Gaming and Esports ETF offers exposure to a global industry with long-term growth potential.

The post 3 ASX ETFs for investors chasing long-term growth 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 Abb, BetaShares Global Cybersecurity ETF, Cisco Systems, CrowdStrike, Intuitive Surgical, and Nintendo. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Electronic Arts and Palo Alto Networks and has recommended the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool Australia has recommended CrowdStrike. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It was a volatile and ultimately successful day for the S&P/ASX 200 Index (ASX: XJO) and many ASX shares this Thursday. After stints in both positive and negative territory this session, investors ended up siding with optimism and sent the index up a fractional 0.12% by the closing bell.

That leaves the ASX 200 at 8,640.7 points.

This rather wild day on the ASX follows a mixed night up on the American markets overnight.

The Dow Jones Industrial Average Index (DJX: .DJI) couldn’t quite hold its own and ended up dropping 0.14%.

However, the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) was in a better mood and gained a healthy 1.2%.

Let’s return to the local markets now, though, and see what kind of movements were happening amongst the various ASX sectors today.

Winners and losers

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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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 positions in and has recommended Domino’s Pizza Enterprises, Macquarie Group, Megaport, and PEXA Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and PEXA Group. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.