After a period of broader market weakness, I'm heading into 2026 focused on businesses that combine quality, structural tailwinds, and the potential to surprise on the upside. Short-term volatility hasn't changed the longer-term outlook for these companies, and each offers a growth profile the market may be underestimating.
Here are 5 ASX-listed companies I'd be happy to own heading into the next phase of the cycle.
Image source: Getty Images
CSL Ltd (ASX: CSL)
CSL remains one of the highest-quality businesses on the ASX, even if its share price has tested investor patience at times. At the time of writing, CSL shares are trading around $176, down almost 40% over the past year and underperforming the broader healthcare sector.
The plasma giant has been working through margin pressure, higher collection costs, and a return to more normal operating conditions following the pandemic.
By 2026, CSL looks well-positioned to benefit from a more supportive operating environment. As collection efficiency improves and cost pressures begin to unwind, margins should follow. With its global footprint, strong intellectual property, and proven execution, even modest operational gains could translate into meaningful shareholder returns.
Electro Optic Systems Holdings Ltd (ASX: EOS)
EOS has moved well beyond its earlier "promise" phase. The business now has a growing order book, a deep pipeline, and exposure to one of the most urgent areas of global defence spending: counter-drone systems.
Governments are no longer treating drone defence as a future capability. It is now a near-term priority, and budgets are being allocated with haste. If even a portion of EOS' pipeline converts over the next 12 to 24 months, revenue visibility and earnings scale could look very different by 2026.
EOS shares have surged more than 500% this year, making it one of the standout performers on the S&P/ASX 300 Index (ASX: XKO).
Xero Ltd (ASX: XRO)
Xero remains a high-quality software business, even as growth has slowed from its early years. Subscriber numbers are no longer the main driver, with greater emphasis now on improving margins and cost control.
The upside case is more about execution than growth. By 2026, earnings are likely to matter more than subscriber numbers in how the market values the stock.
At the time of writing, Xero shares are trading around $115, down roughly 30% year to date and lagging global software peers.
4DMedical Ltd (ASX: 4DX)
While the share price has attracted attention, 4DMedical's appeal extends beyond recent momentum. Its lung imaging software fills a clear clinical gap and is seeing increasing adoption, especially in the US.
The key for 2026 is revenue scaling. As contracts convert and installations increase, operating leverage could emerge quickly. This is still an early-stage growth story, but one where improving fundamentals are moving in the right direction.
With plenty of runway still ahead, 4DMedical shares are trading around $3.61, up more than 600% in 2025.
Accent Group Ltd (ASX: AX1)
Accent Group offers a different angle to the other names on this list. It's a consumer-facing business with strong brand partnerships, a growing digital footprint, and exposure to premium and athletic footwear trends.
While retail is never risk-free, Accent has shown it can manage inventory, protect margins, and adapt to changing consumer behaviour. If discretionary conditions stabilise, Accent could quietly outperform as earnings normalise.
Accent shares have fallen to around 95 cents, down roughly 60% this year and significantly underperforming the broader retail sector.
Foolish bottom line
These 5 ASX stocks cut across healthcare, defence, software, and consumer retail. While short-term moves may be uneven, heading into 2026, they offer a blend of quality, earnings potential, and upside that's difficult to overlook. This is a group I'd be comfortable building exposure to over time.
