Investors may choose to target ASX small-cap shares for upside opportunity.
This comes with increased risk compared to blue-chip companies.
However these two ASX small-caps have attracted buy recommendations from Bell Potter.
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AML3D Ltd (ASX: AL3)
AL3 is a welding, robotics, and software business, which produces automated 3D printing systems that utilise Wire Additive Manufacturing technology (WAM) to produce metal components and structures.
It is particularly useful for the printing of large scale complex industrial parts for the defence, oil & gas and aerospace sectors.
As is expected with penny stocks, AL3 shares have experienced significant volatility over the last year.
However a new report from Bell Potter suggests it could be set for growth.
The broker said the company's technology is particularly suited to maritime applications, giving it strong leverage into demand growth from the US Navy's Maritime Industrial Base and the US SHIPS Act.
This is already coming to fruition with key contracts being secured in the last week.
Over FY26-27, we expect AL3 to increase deployment of ARCEMY systems to the US and Europe, increase prototyping activity and ultimately commence commercial scale production of components. There is potential for the Navy LOI to expand beyond the Maritime Industrial Base to land-based assets. AL3 will also look to deploy its technology into non-defence sector industrial manufacturing.
The broker has retained its speculative buy recommendation and $0.40 price target on this ASX small-cap.
From yesterday's closing price, this indicates an upside of 100%.
Minerals 260 Ltd (ASX: MI6)
MI6 is a Perth-based gold exploration and development company.
This small-cap has rocketed in the past year, rising 470%.
This includes a 59% rise year to date.
Recent analysis from Bell Potter indicates there could be further growth ahead after MI6 reported new drilling results from its fully owned Bullabulling Gold Project in Western Australia.
The latest results come from 5,425 meters of drilling, part of a larger 110,000-meter program.
The drilling found several solid gold intersections, confirming the project's existing resource estimate and discovering additional mineralised areas beyond it.
MI6 offers gold exposure via the 4.5Moz Bullabulling Resource, valuation uplift through discovery success, project advancement and de-risking as the BGP progresses towards production. It holds ~$250m cash, sufficient to fund to Definitive Feasibility Study (DFS), Final Investment Decision (FID), long-lead items and early site works.
The broker has retained its speculative buy recommendation and price target of $0.90.
This indicates a potential upside of 31% from current levels.
