When I look for growth shares, I focus on businesses with large opportunities ahead of them and clear drivers that could push earnings significantly higher over time.
Right now, two ASX growth stocks that look particularly interesting to me are Xero Ltd (ASX: XRO) and NextDC Ltd (ASX: NXT).
I'm not alone in thinking this. A leading broker also supports this view and is recommending them as buys.
Image source: Getty Images
Why I think Xero is an ASX growth stock to buy
Xero has built one of the leading cloud accounting platforms in the world.
The company provides accounting software used by small businesses, accountants, and bookkeepers to manage finances, payroll, invoicing, and tax reporting. What makes the model powerful is that it operates as a subscription service, which creates a recurring revenue stream that grows as more customers join the platform.
As we covered here recently, analysts at Morgans believe the long-term growth opportunity for Xero remains compelling. I agree with their view that cloud accounting adoption still has plenty of room to expand globally.
The broker explains that "Xero is a global accounting software provider. It offers an attractive medium term growth opportunity as subscriber momentum improves and operating leverage begins to flow through the business model."
Another reason Morgans sees upside is the company's expanding ecosystem. Xero has steadily added additional services and integrations around its core accounting software, which increases the value of the platform for customers.
Morgans also believes the company's improved cost discipline is helping strengthen profitability. The broker adds that "recent cost discipline has strengthened margins… resilient revenue growth is supported by price increases and a broader ecosystem of adjacent services."
Importantly, I agree with its analysts' view that the current share price is an attractive entry point for long-term investors, and believe the ASX growth stock could have meaningful upside if it continues executing on its strategy.
The bull case for NextDC
NextDC is another ASX growth stock I think could be set up for massive gains. It operates data centres that support the digital infrastructure powering cloud computing, artificial intelligence (AI), and enterprise data storage.
As businesses increasingly move workloads to the cloud and demand for AI computing power rises, the need for high-quality data centre infrastructure continues to grow.
Morgans is also recommending this stock. It was blown away with its first-half performance, highlighting that recent contract momentum shows how strong demand for NextDC's facilities currently is.
The broker points out that "NextDC sold more MWs in the month of December 2025 than in the preceding 36 months combined," describing the period as a record for enterprise and hyperscale sales.
I think these contracts are significant because they provide long-term revenue visibility. Morgans notes that the company now has 416 megawatts of contracted capacity, which "underpins FY29 underlying EBITDA of greater than $700 million without new contract wins."
Despite this incredible growth outlook, the broker believes the valuation still looks attractive. Morgans states that the company is trading on an "undemanding ~22x EV/contracted EBITDA, with upside potential."
Foolish takeaway
Growth investing often comes down to identifying businesses operating in large markets with strong long-term demand.
Xero is benefiting from the ongoing global shift toward cloud accounting software, while NextDC is positioned at the centre of the rapidly expanding digital infrastructure and AI computing market.
With supportive broker views and significant growth opportunities ahead, I think both ASX shares could be well placed to deliver strong gains in 2026 and beyond.
