ASX tech stock TechnologyOne Ltd (ASX:TNE) slipped 3% on Tuesday afternoon to $27.80.

That extends the ASX tech stock's losses to roughly 17% over the past 12 months.

The pullback comes despite another solid result from the enterprise software provider. TechnologyOne delivered its 17th consecutive record first-half profit on Tuesday.

So why are investors selling? Here are three reasons the market may be losing enthusiasm for the ASX software giant.

Extremely demanding valuation

The first issue is valuation of the ASX tech stock.

Even after the recent sell-off, TechnologyOne shares have still been trading on a price-to-earnings ratio above 65 times earnings. That is an extremely demanding valuation.

At those levels, investors are effectively pricing in years of strong growth and near-perfect execution. The problem is that when expectations become too high, even solid results may not be enough.

That appears to have happened with the latest half-year update. The ASX tech stock delivered a 9% increase in profit before tax to $89.1 million. Annual recurring revenue (ARR) also jumped 17% to $598 million.

While the numbers were strong and broadly matched consensus estimates, some investors were clearly hoping for an even bigger upside surprise. When a stock trades on lofty multiples, "good" can quickly become disappointing.

Higher rates hit valuations

The second concern for the ASX tech stock is interest rates. TechnologyOne operates in the technology sector, where valuations are often highly sensitive to changes in bond yields and interest rate expectations.

Higher interest rates generally reduce the present value of future earnings. That can place pressure on growth stock valuations, particularly companies trading on premium multiples.

And while inflation has eased from peak levels, uncertainty around global interest rates remains. If rates stay elevated for longer than expected, expensive technology stocks could continue facing valuation pressure.

AI disruption concerns

The third risk hanging over the ASX tech stock is artificial intelligence. AI is reshaping the broader software industry at a rapid pace.

To be clear, TechnologyOne is not suddenly becoming irrelevant. The company still has a strong customer base, sticky software products, and recurring revenue streams.

But investors are increasingly questioning how AI could alter competitive dynamics over the long term. New technologies can lower barriers to entry, change customer expectations, and disrupt traditional software development models.

Right now, nobody fully knows which software businesses will benefit most from AI and which could struggle to adapt. That uncertainty alone may be enough to keep some investors cautious.

What do the experts think?

Broker Morgans appears concerned about valuation risk. This week, the broker maintained a sell rating on TechnologyOne shares, arguing the stock still looks expensive at current levels.

That said, not everyone is bearish. Analysts at Bell Potter have retained their buy rating on this ASX tech stock with an improved price target of $32.25. This points to a potential 16% upside.

But with valuation concerns, interest rate risks, and AI uncertainty all weighing on sentiment, investors may be questioning whether the premium price tag is still justified.

The post 3 reasons to sell this ASX tech stock appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It has been a rough year for some once-loved ASX shares.

Several quality companies have been hammered by weaker sentiment, valuation concerns, and broader market uncertainty. In some cases, share prices are down between 17% and 43% in 2026 alone.

But for long-term investors, that could be creating opportunity.

Here are three beaten-down ASX shares that still look like high-quality businesses worth watching closely this week.

Hub24 (ASX: HUB)

Hub24 shares have struggled this year despite the company continuing to deliver strong operational growth.

The ASX financial technology company recently reported quarterly net inflows of $4 billion, while total funds under administration climbed 22% year-on-year to $151.7 billion.

That highlights the strength of its platform business.

More advisers continue adopting Hub24's ecosystem, and industry trends toward platform consolidation could become a powerful long-term tailwind. The ASX share also benefits from recurring revenue and the potential for expanding margins as scale increases.

Importantly, Hub24 operates in a structurally growing industry.

The biggest risk is valuation and sentiment. Growth and technology shares remain highly sensitive to interest rates and broader market volatility. There is also ongoing uncertainty about how artificial intelligence could reshape parts of the wealth management industry over time.

Even so, after falling roughly 17% this year, the ASX growth stock may now offer a more attractive entry point for patient investors.

Life360 Inc. (ASX: 360)

This $4 billion ASX share has also endured a volatile year.

The family safety app provider remains one of the ASX's more unique technology businesses, combining subscription revenue, location services, and growing advertising opportunities into a rapidly expanding ecosystem.

The company continues to grow users strongly in the US and has been improving monetisation across its platform. Investors also appear increasingly excited about Life360's ability to cross-sell new products and services to its large customer base.

Importantly, the company is already profitable on an adjusted EBITDA basis and continues generating strong revenue growth.

However, risks remain. Competition in consumer technology is intense, while concerns around data privacy and changing consumer behaviour could create challenges over time. The ASX share is also highly sentiment-driven and can experience sharp swings during broader technology sell-offs.

After a difficult year for the share – price has dropped 43% year to date – investors may be starting to ask whether the market has become too pessimistic on the company's long-term growth potential.

Treasury Wine Estates Ltd (ASX: TWE)

Treasury Wine Estates has arguably had the toughest year of the trio.

The ASX wine share has battled weaker consumer demand, softer earnings, and operational pressures across key markets including China and the US.

The company also withdrew FY26 guidance earlier this year and paused its share buyback, which badly hurt investor sentiment.

But there are early signs conditions may be stabilising. Recent quarterly numbers showed improving depletion growth in China, Australia, and the US. Penfolds remains a globally recognised premium wine brand, while operational restructuring efforts could eventually support stronger margins and earnings recovery.

The risks are clear. Consumer spending remains under pressure, the wine industry still faces challenges globally, and dividend expectations have weakened significantly in the short term.

Still, after tumbling heavily over the past year, the ASX wine share looks like a recovery play rather than a broken business. And sometimes, that is where the most interesting long-term opportunities emerge.

The post 3 high-quality ASX shares to buy this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Hub24, Life360, and Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Life360 and Treasury Wine Estates. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX gold stock Bellevue Gold Ltd (ASX: BGL) pushed higher on Tuesday after the ASX miner released another encouraging operational update.

During afternoon trade, Bellevue Gold shares climbed 2.5% to $1.55.

The rally continues an impressive run for shareholders. The ASX gold stock is now up roughly 75% over the past 12 months. By comparison, the S&P/ASX 200 Index (ASX: XJO) has gained just 3% over the same period.

So, what exactly did the ASX gold stock announce?

High-grade ore source

Bellevue Gold revealed that it has delivered first ore from the Deacon North underground mine at its Bellevue Gold Project in Western Australia.

Importantly, management of the ASX gold stock said the milestone was achieved on schedule. That matters because Deacon North has the potential to become a major high-grade ore source for the company as production ramps up through FY26 and FY27.

The company also confirmed that all major mining areas at the Bellevue Gold Mine are now in production. Mining operations at Deacon Main and Viago are already established and tracking in line with FY26 guidance.

Management said growing ore contributions from Deacon Main, Viago, and now Deacon North are expected to drive production growth across the next two financial years.

Operational setbacks, cost pressures

Investors appear to like what they are seeing.

The market has been watching the ASX gold stock closely, following earlier operational setbacks and cost pressures. Hitting key development milestones on time could help rebuild investor confidence in the company's execution capabilities.

Higher-grade ore production is also critical. If Bellevue can successfully increase access to high-grade material, it could help lift gold production, improve margins, lower unit costs, and strengthen free cash flow.

Electromagnetic surveys for next phase drilling

The ASX gold stock also flagged more exploration activity ahead.

Bellevue Gold said it has completed the first surface drilling program, while a second phase drilling program is already underway. The company expects that work to continue through the June quarter and into FY27.

At the same time, downhole electromagnetic surveys are beginning to refine exploration targeting and support the next phase of drilling activity.

Management also revealed that it expects a sixth underground diamond rig to arrive on site during the June 2026 quarter. The rig will then begin underground exploration drilling in FY27.

What next for the ASX gold stock?

Today's announcement builds on Bellevue Gold's stronger March quarter update released last month.

During the quarter, the company produced 40,745 ounces of gold while lowering costs and generating a record underlying free cash flow of roughly $158 million.

Management of the ASX gold stock also reaffirmed FY26 guidance, which was another positive sign for investors looking for greater operational consistency.

Gold prices remain near historically elevated levels, which is also helping sentiment toward ASX gold shares more broadly.

For Bellevue Gold, however, the focus increasingly appears to be shifting toward operational delivery. And right now, the market seems pleased with the progress.

The post Guess which ASX gold stock is edging higher today on drilling news appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.

Zip Co Ltd (ASX: ZIP) shares are giving investors another wild ride.

The ASX buy now, pay later (BNPL) stock dropped 5.5% to $2.23 at the start of the week. That pushed its one-month loss out to roughly 11% and its 2026 decline to around 32%.

And yet, somehow, Zip shares are still up about 8% over the past 12 months.

Confused? You are not alone.

Dramatic rollercoaster

The volatility has been relentless.

Back in April, Zip shares surged from $1.55 to $2.58 in just weeks. That marked a massive 66% rally as investors piled into the stock following a strong quarterly update.

But in May, sentiment turned sharply again. The ASX financial stock has since given back a large chunk of those gains and now trades roughly 54% below its 52-week high reached in October last year.

Zoom out further and the rollercoaster becomes even more dramatic. Zip shares are down around 68% over five years. But over 10 years, they are still up roughly 233%.

Seasick yet?

Consumer spending, risk sentiment

So what is actually driving all this volatility? Part of the answer comes down to sentiment.

Technology and growth shares have been under pressure again as investors reassess valuations and risk appetite. Higher interest rates, macro uncertainty, and concerns around consumer spending have all weighed on the sector.

Zip shares tend to amplify those swings because it sits right at the intersection of fintech, consumer spending, and risk sentiment.

When investors feel optimistic, Zip can soar. When markets turn defensive, the stock often gets hit hard.

April's rally was largely driven by improving operational momentum. The company's quarterly update showed continued progress on margins, profitability, and credit quality.

Investors responded positively to signs that Zip's turnaround strategy may finally be gaining traction.

What next for Zip shares?

Management has been focused on increasing revenue per customer while tightening lending standards and improving the quality of its loan book.

If successful, that strategy could turn Zip into a far more sustainable and profitable business over time.

But there are still plenty of risks.

Competition in the buy now, pay later sector remains fierce. Regulatory scrutiny also continues to hang over the industry, while changing consumer behaviour creates another layer of uncertainty.

Losing branding rights

And recently, Zip was hit by another setback after losing a court case linked to its branding rights in Australia.

The ruling means the company cannot use the "Zip" brand name locally in the way it had planned, adding another complication for investors already trying to assess the company's long-term outlook.

That combination of improving fundamentals and lingering uncertainty helps explain why the price of Zip shares keeps swinging so aggressively.

What do analysts think?

This remains a highly speculative ASX growth stock. The upside can be huge when momentum builds, but sentiment can also reverse very quickly.

Despite the recent sell-off, some analysts still see strong upside potential ahead. UBS remains bullish on Zip shares and recently reaffirmed its buy rating on Zip shares.

The broker has a 12-month price target of $3.10 on Zip shares. From current levels, that suggests potential upside of around 39%.

The post What on earth's going on with Zip shares? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Marc Van Dinther 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.

ASX tech stock Hub24 Ltd (ASX: HUB) started the week in the red, slipping 1% to $79.66.

That leaves the ASX tech stock down around 17% in 2026.

But while the sell-off may look ugly on the surface, the recent weakness appears driven more by macro fears and sector sentiment than company-specific problems.

And for long-term investors, that could create an interesting opportunity.

Caught in a sector sell-off

The broader technology sector has been under pressure as investors reassess valuations and try to understand how artificial intelligence (AI) could reshape competitive dynamics.

Growth shares have been hit particularly hard. That is not unusual during periods of uncertainty. Markets often sell first and ask questions later. Even high-quality ASX stocks can get caught in broad-based de-rating cycles.

Importantly, Hub24's operational performance still looks strong. The ASX tech stock continues to benefit from structural growth as more financial advisers adopt its platform.

In its latest quarterly update, Hub24 reported net inflows of $4 billion. Total funds under administration climbed to $151.7 billion, up 22% year-on-year. Those are not the numbers of a business losing momentum.

Platform monogamy

The platform also continues to gain traction across the advice industry. More than 5,200 advisers now use Hub24, and industry trends appear to be working in its favour.

One of the biggest is platform consolidation. More advisers are moving toward "platform monogamy," where they consolidate client assets onto a single provider rather than spreading them across multiple systems.

That trend could become a major tailwind for the ASX tech stock as advisers prioritise efficiency, integration, and scale.

Strong operational leverage

And there may be another powerful growth driver hiding beneath the surface. Platform businesses often benefit from strong operating leverage.

In simple terms, once fixed costs are covered, additional funds flowing onto the platform can generate higher incremental margins. That creates the potential for earnings growth to outpace revenue growth over time. That is one of the more interesting parts of the investment case right now.

The market may be focusing heavily on short-term sentiment, valuation concerns, and AI disruption fears. But internally, Hub24 could still be building a much stronger earnings engine as it scales.

AI uncertainty

The AI debate also deserves some perspective. Technology is evolving rapidly, and AI will almost certainly change parts of the financial services industry over time.

But Hub24 is not simply a basic software product. The ASX tech stock operates a deeply integrated ecosystem connecting advisers, clients, compliance, reporting, and investment administration.

Those ecosystems tend to be sticky. In fact, AI could potentially strengthen platforms like Hub24 rather than disrupt them. Automation and smarter tools may improve efficiency and client servicing without replacing the underlying platform infrastructure.

That distinction matters.

What do the experts think?

Analysts also appear increasingly optimistic despite the recent share price weakness.

According to TradingView data, most brokers currently rate Hub24 shares as a buy.

The average broker price target sits at $105.96, implying potential upside of roughly 33% from current levels. The most bullish target stands at $132.10, while the lowest target is $66.20.

Jarden is among the more positive brokers on the ASX fintech stock. It currently has a buy rating and a $115.30 price target on Hub24 shares.

The post Why this struggling ASX tech stock could surprise investors appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Hub24. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Codan Ltd (ASX: CDA) have been absolutely unstoppable.

The ASX tech stock is now up 42% in 2026 alone and an eye-watering 137% over the past 12 months at the time of writing.

That kind of rally naturally raises one big question for investors: is it finally time to lock in profits, or could the stock still have further to run?

Multiple growth drivers

Codan is not your typical ASX tech company.

The business develops electronic solutions for government, military, corporate, and consumer markets globally, with operations spanning two key divisions: communications and metal detection.

Right now, both businesses are firing. The communications division is benefiting from rising geopolitical tensions and growing defence spending globally.

In uncertain times, governments and military organisations tend to prioritise mission-critical communication systems early, and the $7 billion ASX tech stock appears well-positioned to benefit from that trend.

Demand has reportedly remained strong across areas linked to unmanned systems and software-defined radios, which are becoming increasingly important in modern defence and public safety applications. The company anticipates net profit after tax at around $170 million, up over 60% year on year.

Margins are also moving in the right direction. Codan now expects communications margins to hit 30% in FY26, earlier than previously forecast. That is a meaningful jump from around 26% in FY25.

And when margins expand in technology businesses, earnings can accelerate very quickly.

The gold boom is helping too

The company's Minelab metal detection business is also delivering strong momentum.

As gold prices surge globally, interest in gold prospecting has exploded, particularly across parts of Africa where small-scale mining activity remains widespread. That has created strong demand for Codan's gold detection products.

Importantly, the business is not relying solely on gold miners. The ASX tech stock also continues seeing healthy demand from recreational metal detector users globally, adding another layer of diversification to earnings.

Thanks to these combined tailwinds, Codan now expects FY26 revenue growth to land at the top end of its previously guided 15% to 20% range. That is an impressive result for a company that has already experienced such a massive share price rally.

So, should investors cash out?

Broker sentiment appears a little more cautious after the ASX tech stock's enormous run.

According to TradingView data, analyst views are mixed. Five out of nine brokers currently rate Codan shares as either a buy or strong buy, while three sit at a hold, and one has a sell recommendation.

The average 12-month price target sits roughly 10% above current levels, suggesting analysts still see some upside ahead, but perhaps not another explosive rally like the past year.

Bell Potter is among the more cautious brokers. It recently retained a hold rating and lifted its price target to $41.30, still below the recent share price near $43.

Meanwhile, Macquarie remains more bullish, highlighting Codan's growing exposure to the booming unmanned aerial vehicle (drone) market.

The broker upgraded the stock to outperform and lifted its price target to $44.20. That points to a 10% upside from current price levels.

The post This ASX tech stock has exploded 137%, time to cash out? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.

This ASX wine stock has been smashed over the past year.

Treasury Wine Estates Ltd (ASX: TWE) shares are now worth less than half of their 52-week high of $8.63. They are down roughly 20% in 2026 and around 50% over the past 12 months.

But after climbing around 6% over the past month, investors may be wondering if the worst is finally over.

A difficult backdrop

There is no denying the last year has been painful for Treasury Wine Estates shareholders.

Back in October, the company withdrew its FY26 earnings guidance and paused its share buyback. Problems in China and the US weighed heavily on the business. The ASX wine stock also reported a large first-half loss after impairments hammered its result.

Weak consumer demand, earnings pressure, and broader challenges across the wine industry all hurt sentiment.

The dividend outlook also deteriorated quickly. In fact, the market currently expects no dividend payout in FY26. That alone could scare away many income investors.

Looking beyond short-term pain

However, it is important to look beyond the short-term pain of the ASX wine stock.

And importantly, the company's latest operating update gave investors some much-needed positives. In the March quarter, China depletions jumped 40% on a seasonally adjusted basis. ANZ depletions increased 11%. Asia excluding China climbed 14%, while US market depletions improved 9.1%.

Those numbers matter. They suggest demand is starting to recover in several key markets after an extremely difficult period.

The US business also appears to be stabilising. China demand remains strong. At the same time, Treasury Wine Estates is rolling out operational changes designed to improve execution and efficiency.

If that momentum continues, earnings could gradually rebuild from here.

Income recovery on the horizon

And that is where the longer-term income story becomes interesting. According to CommSec consensus estimates, the market expects partially franked dividends of 15 cents per share in FY27 and 24 cents per share in FY28.

At the current price of the ASX wine stock, that implies a potential forward dividend yield of around 3.3% in FY27. That figure climbs to more than 5.3% in FY28 before factoring in franking credits.

This is not an ASX stock you buy for immediate passive income. Instead, investors are backing a recovery story. The bet is that income returns as earnings improve over time.

Capital growth ahead?

There could also be meaningful capital growth if sentiment keeps recovering.

Treasury Wine Estates still owns a premium portfolio of wine brands. Penfolds remains a major earnings driver and one of Australia's most recognised luxury wine labels.

The ASX wine stock is also restructuring operations, which could help margins improve in the years ahead. Its balance sheet looks more stable too. Recent refinancing activity has strengthened liquidity and given the business more flexibility while it navigates softer conditions.

What next for the ASX wine stock?

According to date on TradingView six out of 17 brokers see the ASX wine stock as a buy or a strong buy. The other 11 analysts rate it a hold and the average 12-month price target is set at $5.24, which points to a 25% upside. The most bullish forecast is $7,90, suggesting a 88% upside at the time of writing.

One broker who is becoming more optimistic on the outlook, is Morgans. It believes the company's shares are now trading on low earnings multiples, potentially creating an attractive entry point for patient investors.

The team at Morgans recently upgraded Treasury Wine Estates shares to an add rating with a $5.30 price target.

The post Why investors may regret ignoring this ASX wine stock today appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Who couldn't use $20,000 in passive income a year?

For some investors, that could help smash down the mortgage faster. For others, it might fund Europe trips, long Friday lunches, or provide a means to escape the 9-to-5 grind earlier.

And while generating $20,000 a year in passive income sounds ambitious, it breaks down to roughly $485 a week.

The real question is: how do you actually build an investment portfolio capable of producing that kind of reliable income?

Here is one simple long-term approach.

Start with the target

If a portfolio delivers an average dividend yield of 5%, generating $20,000 annually would require approximately $400,000 invested.

That number can feel intimidating at first glance.

But the important thing is remembering that passive income portfolios are rarely built overnight. They are built steadily through years of investing, compounding, and reinvesting returns.

The first stage is not about income at all. It is about building capital.

Focus on growth first

One of the biggest mistakes investors make early on with building passive income is chasing high dividend yields too soon. In many cases, growth can be far more powerful than income during the wealth-building phase.

Companies capable of reinvesting profits at high rates of return can compound shareholder wealth much faster than mature income stocks. For example, businesses like Xero Ltd (ASX: XRO) and Pro Medicus Ltd (ASX: PME) may not offer massive dividend yields today, but both have delivered exceptional long-term capital growth.

Broad market ETFs can also play a major role here. Funds such as Vanguard Australian Shares Index ETF (ASX: VAS) and iShares S&P 500 ETF (ASX: IVV) provide diversification while still giving investors exposure to long-term market growth.

At this stage, the goal is simple: grow the portfolio as large as possible.

Let compounding do the heavy lifting

Time is one of the most powerful investing tools available.

If an investor contributed $1,200 per month and achieved an average annual return of 10% over the long term — not guaranteed, but historically achievable — the portfolio could grow surprisingly quickly.

After 10 years, the portfolio would be worth around $250,000. After 15 years, it could approach $500,000.

Importantly, total contributions over 15 years would only amount to about $216,000, with the remainder coming from investment growth and compounding returns.

That is where the real snowball effect begins.

Transition toward income

Once the portfolio approaches the target size, investors can gradually shift toward more income-focused assets.

That could include dividend shares such as APA Group (ASX: APA), Transurban Group (ASX: TCL), or Telstra Group Ltd (ASX: TLS). Income-focused ETFs such as Vanguard Australian Shares High Yield ETF (ASX: VHY) may also help diversify the income stream.

At an average portfolio yield of 5%, a $400,000 portfolio could generate approximately $20,000 annually in passive income.

And if dividends continue growing over time, that income stream could become even larger.

Foolish takeaway

Passive income is rarely created in one giant leap. It is usually built in stages: first by growing capital, then by converting that capital into reliable income-producing assets.

It takes patience, consistency, and time, but for long-term ASX investors, the rewards can be substantial.

The post How to generate $20,000 a year in passive income on the ASX appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Transurban Group, Xero, and iShares S&P 500 ETF. 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 Apa Group, Telstra Group, Transurban Group, and Xero. The Motley Fool Australia has recommended Pro Medicus, Vanguard Australian Shares High Yield ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Santos Ltd (ASX: STO) shares pushed higher on Monday as investors cheered both stronger oil prices and a major production milestone in Alaska.

During afternoon trade, Santos shares climbed 2.5% to $8.08. The energy giant has now surged around 31% year to date and roughly 26% over the past 12 months.

That is a massive outperformance compared to the benchmark S&P/ASX 200 Index (ASX: XJO), which was down 1.2% on Monday and has gained only around 4% over the past year.

Alaskan oil production boost

Rising global oil prices amid ongoing geopolitical tensions and tighter supply expectations have been the main driver for this year's share price rally.

But Monday's gains received another boost for Santos shares after the company announced first oil production from the Pikka phase 1 development on Alaska's North Slope.

For Santos, this is a major milestone. The company is one of Australia's largest oil and gas producers, supplying LNG, natural gas, and oil across Australia, Papua New Guinea, Timor-Leste, and, increasingly, Alaska.

Its earnings move with energy prices and production growth. Major project developments can sharply shift investor sentiment.

The company revealed that oil flow has now been established through the Lease Automated Custody Transfer (LACT) meter into the Pikka sales oil line. Santos operates the project and holds a 51% interest in the Pikka Unit, while partner Repsol SA (BMEX: REP) owns the remaining 49%.

Major production ramp-up

Importantly, this is only the beginning of the production ramp-up. Pikka phase 1 has officially started production. At first oil, 28 development wells were already drilled. 21 had been stimulated and flowed back as expected.

Output is now ramping toward 20,000 barrels per day over the coming weeks as key systems progressively come online. Production will remain intermittent during commissioning before stabilising for around one month once the Seawater Treatment Plant begins water injection.

The company then expects output to accelerate sharply, targeting a production plateau of 80,000 barrels per day during the third quarter. First sales revenue should start flowing within three months. Santos and Repsol will alternate tanker shipments from the Port of Valdez.

What did Santos management say?

Management clearly views Pikka as a transformational long-term asset.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said:

Alaska has a huge runway ahead of it which will underpin value-accretive production growth for Santos for the long term. When the Pikka Field was discovered, the Nanushuk formation was recognised as a new generation play in an established global super basin and we are proud to be at the forefront of unlocking its resource potential. The Pikka phase 1 project has demonstrated Santos' capability to develop this world-class resource safely, responsibly and efficiently. We are already implementing technical drilling improvements that save time and cost, and we will continue to drive improved performance into the future.

What next for Santos shares?

For investors, the announcement reinforces Santos' strategy. It is expanding long-life, cash-generating energy assets. It is also benefiting from a stronger oil price environment.

With Pikka now producing first oil, momentum is building. The market is growing more confident that Santos still has meaningful production growth ahead.

The post Why are Santos shares jumping higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.

This $11 billion ASX industrials stock is moving higher on Monday after the company delivered a record FY26 result.

During afternoon trade, shares in ALS Ltd (ASX: ALQ) climbed 3% to $22.85.

The latest gain adds to what has already been a strong run for shareholders. ALS shares are now up roughly 28% over the past 12 months, comfortably outperforming the benchmark S&P/ASX 200 Index (ASX: XJO), which has risen only around 4% over the same period.

So, what impressed investors?

A big jump in profits

The ASX industrials stock delivered strong growth across several key financial metrics.

Revenue climbed 10.7% year on year to a record $3.32 billion. Even more impressive was profitability.

Underlying net profit after tax (NPAT) surged 25.8% to $381.2 million. Underlying EBIT jumped 19.3% to $599 million, while margins improved sharply by 129 basis points to 18%. Statutory NPAT also rose strongly, lifting 24.4% to $318.7 million.

Cash generation remained a major highlight too. ALS produced free cash flow of $674.1 million and achieved EBITDA cash conversion of 92%, reinforcing the quality of earnings behind the result.

Shareholders were also rewarded with a final dividend of 23.1 cents per share, partially franked. That brought full-year dividends to 42.5 cents per share.

Commodities keeps firing

One of the standout divisions of the ASX industrials stock was Commodities. Revenue in the segment surged 18.8%, helped by stronger mineral exploration activity globally. That is not surprising given the ongoing demand for critical minerals, copper, gold, and broader resources exploration activity.

Life Sciences also performed well, with revenue rising 6%, driven by strength in the food business.

Environmental was softer, particularly across the Americas, where internal operational issues and weaker market conditions weighed on growth. Management said those issues are now being addressed.

What did management say?

CEO and Managing Director Malcolm Deane said:

ALS has delivered robust financial performance in FY26, reflecting the resilience of our diversified portfolio, disciplined operational execution and the commitment of our people in continuing to deliver high quality service and outcomes for our customers. Throughout the year, we remained focused on executing our refreshed strategy and advancing the priorities outlined in our value creation framework. This included disciplined capital allocation, targeted investment in growth opportunities and ongoing portfolio optimisation to strengthen returns and position the business for long-term sustainable growth, maximising shareholder returns.

What next for ALS?

Management of the ASX industrials stock remains optimistic heading into FY27. ALS expects mid to high-single-digit organic revenue growth alongside further margin expansion.

New laboratories in Sydney and Lima are scheduled to come online during the second half of FY27, expanding capacity in key growth areas. The company is also leaning heavily into automation, digital infrastructure, and artificial intelligence through its "Lab of the Future" initiative.

While management acknowledged ongoing macroeconomic and supply chain risks, ALS appears well-positioned, with a strong balance sheet and growing exposure to long-term demand for mining, environmental, and industrial testing.

The post Why is this ASX industrials stock edging higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.

ASX industrials stock GenusPlus Group Ltd (ASX: GNP) is climbing on Monday after the company unveiled a major acquisition alongside an earnings upgrade.

During morning trade, the ASX industrials stock jumped 6% to $9.74.

That continues what has already been a phenomenal run for shareholders. GenusPlus shares have now surged roughly 219% over the past 12 months, massively outperforming the benchmark S&P/ASX 200 Index (ASX: XJO), which has gained just 4% over the same period.

So what exactly got investors excited today?

A major acquisition move

The biggest catalyst was GenusPlus' announcement of the acquisition of MPC Kinetic (MPK), a major infrastructure contractor operating across the gas, water, and energy sectors.

The deal significantly expands GenusPlus beyond its traditional electricity infrastructure operations. It also pushes the company deeper into critical national infrastructure projects.

Importantly, the acquisition also diversifies the ASX industrials stock across multiple utility sectors at a time when infrastructure spending across Australia continues to accelerate. That broader exposure appears to have impressed investors.

What did GenusPlus management say?

Management of the ASX industrials stock believes the acquisition will strengthen earnings, expand the customer base, and create additional long-term growth opportunities.

GenusPlus Managing Director David Riches was clearly enthusiastic about the transaction, commenting:

MPK is a high-quality business with a strong management team. Blue-chip client base and significant potential. The combination diversifies Genus into the attractive gas and water sector and accelerates our strategy to becoming the leading provider of critical infrastructure across Australia.

The market appears to agree.

Infrastructure businesses exposed to electricity, water, gas, and communications are becoming increasingly popular with investors. Massive spending on energy transition projects and utility upgrades is creating a powerful long-term growth tailwind for the sector.

Earnings upgrade

The acquisition was not the only major announcement. The ASX industrials stock also upgraded its earnings guidance on Monday, giving investors another reason to pile into the stock.

The company now expects stronger profitability than previously forecast. This is thanks to continued project momentum, robust demand conditions, and improving operational performance across the business.

Genus upgraded its FY26 earnings guidance, with management now expecting normalised EBITDA of between $96 million and $100 million. That would represent impressive growth of roughly 42% to 48% compared to FY25 levels.

Meanwhile, normalised EBIT(A) is forecast to land between $76 million and $80 million, excluding acquisition amortisation.

Importantly, the ASX industrials stock expects that part of that earnings boost will come from the recently completed Railtrain Holdings acquisition. This should contribute around $2 million to $3 million in EBITDA growth this financial year.

What's next for GenusPlus?

Of course, risks remain for the ASX industrials stock. Large infrastructure projects can face execution risks, cost overruns, labour shortages, and margin pressure.

And after a staggering 219% share price rally over the past year, some investors may question how much good news is already priced into the stock.

Still, today's announcements reinforced why momentum around GenusPlus remains extremely strong.

The combination of a major strategic acquisition, upgraded earnings guidance, and growing exposure to long-term infrastructure spending themes appears to be keeping investors firmly interested in the ASX industrials stock.

The post Why is this $2 billion ASX industrials stock racing higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 GenusPlus Group. The Motley Fool Australia has recommended GenusPlus Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It was another ugly week for shareholders in CSL Ltd (ASX: CSL).

While the share price finally steadied toward the end of the week, the damage had already been done.

CSL shares have crashed 19% over the past five trading days and are now down roughly 44% year to date and a staggering 59% over the past 12 months. For a company once considered one of the ASX's safest long-term growth machines, that is a brutal fall from grace.

So, what exactly is going on, and could a comeback finally be brewing?

Another downgrade sends investors running

The latest sell-off was sparked by yet another earnings downgrade.

CSL now expects FY26 revenue of US$15.2 billion on a constant currency basis and net profit after tax of around US$3.1 billion. That compares with FY25 revenue of US$15.6 billion and profit of US$3.3 billion.

Investors clearly were not impressed. The market has become increasingly impatient with CSL after several years of slowing growth, operational hiccups, and disappointing updates.

Once upon a time, investors treated CSL shares like royalty.

Now? The market seems to greet every announcement by nervously checking for hidden bad news. The company has battled weaker vaccine demand, restructuring headaches, leadership turnover, and ongoing operational challenges.

At the same time, healthcare stocks more broadly have fallen out of favour throughout 2026, making life even tougher for CSL shareholders.

Why confidence keeps fading

The biggest issue right now appears to be confidence.

For years, investors happily paid premium valuations on CSL shares because the ASX biotech company consistently delivered strong earnings growth and operational execution. That trust has taken a serious hit.

This latest downgrade only reinforced fears that earnings momentum remains under pressure. Management specifically pointed to weakness in China albumin pricing, inventory normalisation in the US immunoglobulin market, and several operational factors weighing on profitability.

Translation? Investors are tired of hearing about temporary problems that somehow keep sticking around. Right now, the market wants proof. Not promises.

That means CSL likely needs to deliver several periods of stabilising revenue growth and improving margins before sentiment meaningfully recovers.

Is the market becoming too pessimistic?

Despite all the negativity, writing off CSL completely may still be dangerous.

This remains Australia's largest biotechnology company with enormous global scale, powerful plasma collection operations, and leading healthcare products used worldwide.

Importantly, healthcare demand itself has not disappeared. If CSL can regain earnings momentum, investor sentiment could improve surprisingly quickly, especially after such a dramatic valuation reset.

Sometimes the market swings too far in both directions. And after a near-60% collapse over 12 months, some investors are beginning to wonder whether pessimism around CSL shares has become excessive.

What do brokers think?

Broker sentiment still leans cautiously optimistic overall.

Morgans recently retained its buy rating on CSL shares despite trimming its price target to $147.59. That still implies roughly 50% upside from current levels.

The broker acknowledged disappointment around the downgrade but noted the problems appear "primarily executional rather than structural".

Meanwhile, Bell Potter maintained its hold rating but sharply slashed its target price from $155 to $100. That new valuation sits only modestly above CSL's current share price of $97.96.

The post CSL shares crash, but is a comeback looming? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Xero Ltd (ASX: XRO) finished last week with a bang.

The ASX tech share rocketed 8% on Friday to close at $79.67, clawing back some ground after a brutal sell-off earlier in the week.

Even with that strong rebound, Xero shares are still down roughly 30% year to date and about 54% over the past 12 months at the time of writing.

That is a shocking underperformance compared to the benchmark S&P/ASX 200 Index (ASX: XJO), which has gained around 4% over the same period.

So what on earth is happening with this once high-flying tech darling?

The market hit the panic button

Friday's surge looks very much like a classic relief rally. On Thursday, investors absolutely smashed Xero shares after the company released its latest result.

The main issue? Margins. Investors became nervous about profitability as Xero continues pouring money into cracking the US market and integrating its acquisition of Melio.

In other words, the market saw rising costs, heard "lower margins", and immediately headed for the exits.

Classic tech stock behaviour. But once the panic selling cooled down, investors seemed to remember something important: the actual business is still growing very quickly.

And underneath the scary headlines, there were some seriously strong numbers. Revenue surged 31% to NZ$2.75 billion for the year, showing demand for Xero's accounting software platform remains extremely healthy.

Recurring revenue also kept flying higher, with annualised recurring revenue jumping 37%. For a software company, that recurring revenue stream is gold because it gives investors much better visibility over future earnings.

US growth story is still alive

Perhaps the biggest reason investors are warming back to Xero shares is the US growth story. For years, investors have viewed the massive US small-business market as Xero's ultimate prize.

And right now, the company finally appears to be gaining real traction.

Organic growth in the US reportedly accelerated to 30%, suggesting Xero's expansion strategy may finally be starting to pay off.

That is a big deal. If Xero can establish itself as a serious player in the US accounting software market, the long-term growth runway becomes enormous.

Management's FY27 outlook also helped steady nerves. The company is guiding toward another year of roughly 34% revenue growth despite ongoing macroeconomic uncertainty.

That hardly sounds like a business hitting the brakes.

Artificial intelligence is also becoming a larger part of the investment story. Management highlighted growing adoption of AI-powered tools like its "Just Ask Xero" assistant, alongside partnerships with OpenAI and Anthropic.

The goal is simple: improve automation, increase productivity, and make the platform even stickier for customers.

So, what next?

Another likely driver behind Friday's rebound was Xero's newly announced NZ$550 million share buyback. Buybacks often signal management believes the market has become overly pessimistic about a company's valuation.

And after a 54% share price wipeout, investors may finally be starting to wonder whether the sell-off simply went too far.

Broker sentiment certainly remains bullish.

According to TradingView data, 14 out of 15 brokers currently rate Xero shares as either a buy or strong buy.

The average price target sits at $130.53, implying roughly 64% upside from current levels.

Meanwhile, analysts at Macquarie Group Ltd (ASX: MQG) remain especially optimistic, retaining their buy rating and lifting their price target to $235.80 (from $223.60).

That implies potential upside of almost 200% if things go right from here.

The post What on earth's going on with Xero shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 and Xero. The Motley Fool Australia has positions in and has recommended Macquarie Group and Xero. 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 long-term wealth creation, they often think flashy tech stocks not ASX dividend shares.

But sometimes the best investments are the boring ones quietly generating reliable cash flow year after year.

That is exactly why Transurban Group (ASX: TCL) stands out as one of the ASX's most compelling long-term dividend shares.

The infrastructure giant owns and operates some of Australia's most important toll roads across Sydney, Melbourne, and Brisbane, alongside major assets in North America.

And while toll roads may not sound exciting, the business model is incredibly powerful.

Why Transurban keeps delivering

Transurban benefits from something many businesses dream about: highly predictable recurring revenue.

Every day, millions of motorists rely on its roads to commute, transport freight, and move around growing cities. That creates steady cash generation largely independent of short-term economic swings.

Importantly, many of Transurban's toll agreements also include inflation-linked pricing structures. That means revenue can continue rising even during periods of elevated inflation, a major advantage in today's environment.

Traffic trends also remain supportive. In its latest half-year result, the ASX dividend share reported average daily traffic growth of 2.5% across its network, reaching approximately 2.6 million trips per day.

Major projects are also strengthening the company's long-term growth outlook. The recent opening of Melbourne's West Gate Tunnel project adds another significant infrastructure asset to the portfolio, while upgrades and expansions continue across Sydney and North America.

These projects should support rising traffic volumes and cash flow growth for many years ahead.

Growing dividend stream

For income-focused investors, Transurban's dividend profile remains highly attractive.

The ASX dividend share recently reaffirmed FY26 distribution guidance of 69 cents per stapled security, representing roughly 6% growth compared to FY25. At current share prices, that implies a forward dividend yield of approximately 4.7% to 5%.

Importantly, management continues targeting gradual distribution growth as traffic volumes rise and new projects mature. That combination of dependable income and long-duration infrastructure assets is a rare find on the ASX.

Of course, risks remain

No investment is without risk. Transurban carries significant debt due to the capital-intensive nature of infrastructure projects, meaning higher interest rates can pressure financing costs.

Regulatory risk also remains a factor for this $45 billion dividend share, particularly as governments increasingly scrutinise toll road pricing and transport affordability.

Traffic volumes can also weaken during economic slowdowns, although historically the impact has often been relatively resilient compared to many other industries.

The long-term outlook

Despite those risks, Transurban continues to possess several characteristics long-term investors love. It operates essential infrastructure assets, generates recurring cash flow, benefits from inflation-linked revenue, and continues growing distributions over time.

For investors looking to build passive income and long-term wealth over the next decade and beyond, Transurban still looks like one of the highest-quality ASX dividend shares.

The post The ASX dividend share built for long-term wealth appeared first on The Motley Fool Australia.

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

The best-performing ASX ETFs over the past year all have one thing in common — commodities.

While technology and healthcare shares have struggled through bouts of volatility, commodity-linked investments have surged as investors pile into gold, critical minerals, and resource producers benefiting from inflation pressures, geopolitical uncertainty, and booming AI-driven energy demand.

That momentum has translated into massive gains for several ASX-listed exchange-traded funds (ETFs).

Here are three commodity-focused ASX ETFs that have exploded between 85% and 135% over the past 12 months.

BetaShares Global Uranium ETF (ASX: MNRS)

One of the standout performers has been the BetaShares Global Uranium ETF, which has surged an astonishing 112% over the past year.

The ASX ETF provides investors exposure to global uranium miners and companies tied to the nuclear energy supply chain.

Its biggest strength is clear: uranium demand is booming again. Governments around the world are increasingly embracing nuclear power as a low-emissions energy source capable of supporting AI data centres and energy-intensive infrastructure.

That has reignited investor enthusiasm for uranium producers after years of underinvestment across the sector.

The ETF's largest holdings currently include Cameco Corporation (TSX: CCO) and NexGen Energy Ltd (ASX: NXG).

However, the risks are equally significant. Uranium remains a highly volatile commodity, heavily influenced by political decisions, energy policy shifts, and investor sentiment. If uranium prices retreat sharply, the ETF could also experience large pullbacks.

VanEck Gold Miners ETF (ASX: GDX)

Another huge winner has been this VanEck gold ETF, which has climbed roughly 85% over the past 12 months.

As global uncertainty has intensified, investors have flooded into gold as a traditional safe-haven asset. That has delivered massive gains for gold mining companies, particularly as rising gold prices can significantly boost mining margins and profitability.

The ASX ETF provides diversified exposure to some of the world's largest gold producers, including major holdings like Newmont Corp (ASX: NEM).

One major strength of the ASX ETF is diversification. Rather than relying on a single miner, investors gain exposure across multiple producers and jurisdictions.

But risks remain. Gold miners can still be highly cyclical, while operational costs, geopolitical risks, and fluctuations in gold prices can all impact earnings.

Global X Physical Platinum ETF (ASX: ETPMAG)

Finally, the Global X Physical Platinum ETF has skyrocketed around 132% over the past year.

Unlike traditional mining ASX ETFs, this fund provides direct exposure to physical platinum bullion. Its main strength lies in its pure commodity exposure.

Platinum demand has surged amid tightening global supply conditions, industrial demand recovery, and growing interest in precious metals as inflation hedges.

Because the ETF directly tracks physical platinum, investors avoid many of the operational risks associated with mining companies. The primary holding is allocated physical platinum stored in secure vaults.

However, commodity prices can swing wildly, and platinum remains particularly sensitive to industrial demand cycles and global economic conditions.

The post These commodity ASX ETFs are leaving the market behind appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.

Markets feel messy right now. Volatility is the result and it can make even experienced investors question how to invest next.

Between artificial intelligence disruption, geopolitical tension in the Middle East, and stubbornly high interest rates, investors are being pulled in every direction.

But if you understand how to invest during turbulent periods, chaos becomes less of a threat and more of a signal.

Focus on stability first

When uncertainty rises, defensive stocks tend to stand out.

These are companies that provide essential services people rely on regardless of economic conditions. Demand doesn't vanish when growth slows.

For example, Transurban Group (ASX: TCL) operates major toll roads across Australia and the US. Traffic levels may fluctuate, but the business benefits from long-term contracts and essential infrastructure usage.

This is a key lesson in how to invest during volatile periods: defensive shares won't always deliver explosive gains, but they can help stabilise portfolio performance when markets become unpredictable.

Back quality businesses

Volatility also helps separate strong companies from weak ones.

Lower-quality businesses often struggle when conditions tighten, while high-quality companies tend to prove their resilience.

This is where it pays to focus on firms with clear competitive advantages, whether that's strong brands, dominant market positions or irreplaceable assets.

BHP Group Ltd (ASX: BHP) is one example of a large, diversified ASX business with scale advantages, strong cash generation and global demand exposure. Balance sheet strength also matters. Companies with manageable debt and consistent cash flow have more flexibility to invest through downturns rather than retreat from them.

Earnings reliability is another key filter. Businesses that can generate steady profits over time tend to experience less extreme share price swings.

In uncertain environments, quality often outperforms.

Use ASX ETFs to reduce risk

For investors unsure how to invest in individual stocks during volatile markets, ETFs offer a practical alternative. They provide instant diversification across sectors, reducing the impact of any single company or market shock.

Income-focused ETFs can also help smooth returns. The Vanguard Australian Shares High Yield ETF (ASX: VHY), for instance, is heavily weighted toward dividends from banks, miners and energy companies.

Bond ETFs add another layer of stability. The iShares Core Composite Bond ETF (ASX: IAF) invests across Australian government and corporate bonds, typically providing more defensive characteristics and regular income.

Blending equities with income and fixed income exposure is often a core principle in how to invest for smoother long-term returns.

Keep investing through the noise

Trying to time markets during periods of volatility is extremely difficult, even for professionals.

That's why dollar-cost averaging is such a powerful tool. Rather than investing a lump sum at once, you invest regularly over time. This means you automatically buy more when prices are lower and less when they are higher, without needing to predict market turning points.

It's simple, disciplined and removes emotional decision-making. Just as importantly, it keeps investors engaged in the market during uncertain periods. This is critical, because missing the recovery often hurts more than enduring the downturn.

The post How to invest during market chaos and volatility appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Interest in artificial intelligence continues to surge globally, but genuine ASX AI shares remain surprisingly rare.

That scarcity could create opportunities for investors willing to look beyond the market's obvious winners. A handful of lesser-known ASX AI shares still offer the kind of catalysts, operating leverage, and re-rating potential that could drive outsized returns.

Here are two names increasingly catching investor attention.

Macquarie Technology Group Ltd (ASX: MAQ)

First up is Macquarie Technology. This ASX AI share is rapidly emerging as one of the clearest "picks and shovels" plays on the AI boom.

As artificial intelligence adoption accelerates, demand is exploding for data centres, cloud infrastructure, cyber security, and sovereign hosting solutions. These are exactly the areas where Macquarie Technology is investing aggressively.

In March, the company secured a $200 million hybrid investment from the government-backed National Reconstruction Fund Corporation.

The funding will help accelerate development of sovereign cyber security and cloud services and AI infrastructure for government agencies and defence and critical industries. Management plans to draw down the first $100 million by June 2026 and the second tranche by March 2027.

Unlike many speculative AI stocks, Macquarie Technology already generates meaningful earnings and has very visible demand drivers. The ASX AI share has now delivered 20 consecutive half-years of operating income growth, an impressive track record in any market environment.

As more data centre capacity comes online and utilisation rates rise, earnings could expand rapidly.

If the market begins valuing the company more like established data centre operator NextDC Ltd (ASX: NXT), investors could see significant upside from current levels.

Appen Ltd (ASX: APX)

Then there's Appen. This is unquestionably the more speculative of the two ASX AI shares, but it may also carry the greatest upside potential.

Appen provides training data used by artificial intelligence models, placing it directly in the centre of the generative AI ecosystem.

After several difficult years, there are finally signs the business may be stabilising. For the March quarter, Appen reported revenue of $54.8 million, up 9% from the prior corresponding period. That marks an encouraging shift after a prolonged period of declining sales.

Profitability also improved. Underlying EBITDA came in at $1 million, compared to a $1.5 million loss a year earlier.

The strongest momentum is clearly coming from China. Revenue in the region surged 88% to $34.9 million, driven by growing demand tied to generative AI projects. The division exited the quarter with an annualised revenue run rate above $144 million.

Outside China, however, conditions remain challenging. The Appen Global segment saw revenue tumble 37% and posted an EBITDA loss of $3.1 million, reflecting the uneven nature of project-based work.

Even so, after the share price collapsed almost 90% over the past five years, expectations are now extremely low.

That creates an interesting setup. If demand for high-quality AI training data continues recovering or if Appen secures new strategic partnerships, even modest operational improvements could spark a sharp market re-rating.

The post These under-the-radar ASX AI shares are starting to turn heads appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Appen. 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.

If I had to rebuild my portfolio from scratch today, my investing strategy would be much simpler than when I first started.

Instead of chasing speculative trends or trying to pick every market winner, I would focus on a balanced mix of high-quality ASX shares and diversified ETFs designed to deliver long-term growth, passive income and global exposure.

The core of my investing strategy would start with diversification.

Rather than relying heavily on one sector or one country, I would spread investments across Australian blue chips, global markets and technology-focused growth opportunities.

Australian exposure

For Australian exposure, I would begin with the Vanguard Australian Shares Index ETF (ASX: VAS).

This ETF provides broad access to many of Australia's largest companies, including banks, miners and industrial businesses. It also delivers solid dividend income, which can help compound returns over time through reinvestment.

Alongside that ETF, I would add selective ASX shares with reliable earnings and defensive characteristics. Wesfarmers Ltd (ASX: WES) would likely feature prominently. The company owns high-quality retail and industrial businesses including Bunnings and Kmart, while also generating steady cash flow and dividends.

For infrastructure exposure, I would include Transurban Group (ASX: TCL). Infrastructure assets can add stability to an investing strategy because they often produce recurring revenue linked to population growth and inflation. That can become particularly valuable during periods of economic uncertainty.

Global reach and tech growth

However, if I were starting again today, I would place much greater emphasis on global growth and technology exposure than I did originally.

Artificial intelligence (AI), cloud computing and digital infrastructure are reshaping industries worldwide, and I would want meaningful exposure to those long-term trends.

That is where the iShares S&P 500 ETF (ASX: IVV) would play a major role. This ETF gives investors access to some of the world's largest technology companies, including Apple Inc (NASDAQ: AAPL) and Nvidia Corporation (NASDAQ: NVDA). These businesses continue benefiting from AI investment, digital transformation and expanding global demand for computing power.

To further strengthen diversification, I would also include the Vanguard MSCI International Shares ETF (ASX: VGS). This ETF provides exposure to developed international markets beyond Australia and reduces reliance on the local economy alone.

For a direct ASX tech growth opportunity, I would consider Xero Ltd (ASX: XRO). Xero has built a strong global software platform and continues expanding internationally, offering long-term growth potential despite short-term volatility.

Foolish Takeaway

Importantly, my investing strategy today would focus less on short-term market movements and more on consistency.

I would invest regularly, reinvest dividends where possible and avoid reacting emotionally to market volatility.

Starting over has a hidden advantage: it forces simplicity. And over long periods, a simple investing strategy built around diversification, quality businesses and long-term patience can often outperform more complicated approaches.

The post My simple investing strategy if I had to start over appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Apple, Nvidia, Transurban Group, Wesfarmers, Xero, and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended Transurban Group and Xero. The Motley Fool Australia has recommended Apple, Nvidia, Vanguard Msci Index International Shares ETF, Wesfarmers, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Building strong retirement income often starts with owning high-quality ASX dividend shares capable of delivering reliable passive income through different market cycles.

For long-term investors, a mix of infrastructure and resource exposure can help balance stability, growth and yield. These three ASX dividend shares each offer a different pathway to building retirement income.

APA Group (ASX: APA)

APA Group can play an important role in a retirement portfolio thanks to its stable infrastructure earnings and highly reliable income generation.

The company owns critical gas pipelines and energy infrastructure assets across Australia, helping generate predictable cash flow that supports consistent distributions to investors.

Importantly, APA has increased its dividend every year for the past 20 years, a rare achievement on the ASX.

For retirement-focused investors seeking passive income, APA's defensive business model may also help reduce portfolio volatility during weaker market periods.

The forward distribution yield currently sits around 5.5%, and franking credits can push the grossed-up yield considerably higher for Australian investors.

Of course, risks remain. Higher interest rates can pressure infrastructure valuations, while energy regulation and the long-term transition away from fossil fuels remain important considerations.

Still, demand for essential infrastructure is expected to remain strong for decades.

Fortescue Ltd (ASX: FMG)

Fortescue is well known among income investors for paying large dividends during periods of strong iron ore prices.

The mining giant benefits from low-cost iron ore operations and substantial export demand from Asia, helping support large cash flows during commodity upcycles.

For retirement investors comfortable with some market volatility, Fortescue could offer an attractive source of dividend income.

According to CommSec projections, the company could pay an annual dividend of 80 cents per share in FY27.

At current prices, that translates into a grossed-up dividend yield of around 5.4%, including franking credits. The projected FY26 grossed-up yield is even higher at 6.6%.

However, investors should understand the risks tied to commodity cycles. Fortescue's earnings and dividends remain heavily exposed to fluctuations in iron ore prices and Chinese steel demand. If commodity prices weaken sharply, dividend payments could fall as well.

Transurban Group (ASX: TCL)

Transurban is another infrastructure heavyweight that may suit retirement investors seeking stable long-term returns.

The company operates major toll roads across Australia and North America, generating recurring revenue linked to population growth, urban expansion and rising traffic volumes.

Infrastructure assets such as toll roads often produce inflation-linked earnings, which can become increasingly valuable during retirement when preserving purchasing power matters.

For FY26, Transurban has guided to a distribution of 69 cents per security, implying a forward yield of around 5.0%. The company recently paid an interim distribution of 34 cents per security, reinforcing its steady payout profile.

Like APA, higher interest rates can pressure infrastructure valuations and borrowing costs. But Transurban's long-term growth outlook remains supported by growing transport demand and large-scale infrastructure ownership.

The post These ASX dividend shares could power your retirement income appeared first on The Motley Fool Australia.

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

Shares in Xero Ltd (ASX: XRO) are roaring back to life on Friday.

During afternoon trade, the ASX tech stock surged 9.5% to $80.69 as investors piled back into the beaten-down software giant following Thursday's brutal sell-off.

Even after today's strong rebound, Xero shares remain down around 29% year to date and roughly 53% over the past 12 months at the time of writing. That is a dramatic underperformance compared to the benchmark S&P/ASX 200 Index (ASX: XJO), which has gained about 5% over the same period.

So, why are investors suddenly warming to the tech stock again?

Classic relief rally

The biggest driver for Xero shares today appears to be a classic relief rally.

On Thursday, investors aggressively dumped Xero shares. They reacted negatively to concerns around profitability and falling margins tied to the company's major US expansion push and integration costs associated with its acquisition of Melio.

But after the initial panic selling faded, the market seems to have refocused on the stronger parts of Xero's latest result — and there were plenty of positives hiding beneath the surface.

Revenue for the year surged 31% to NZ$2.75 billion. It shows that customer demand for the company's accounting software platform remains very strong.

Cracking the US market

Subscriber growth also continued accelerating, particularly in the US, where organic growth reportedly climbed 30%. That is significant because cracking the massive US small-business market has long been seen as one of Xero's biggest long-term growth opportunities.

The company also delivered strong recurring revenue growth, with annualised recurring revenue jumping 37%.

Importantly, management's FY27 outlook also appears to have reassured investors. Xero's guidance points toward another year of roughly 34% revenue growth. It suggests the company still sees substantial momentum ahead despite ongoing macroeconomic uncertainty.

Artificial intelligence also seems to become a bigger part of the investment story. Management highlighted growing adoption of AI-powered tools including its "Just Ask Xero" assistant, alongside partnerships with OpenAI and Anthropic.

Those initiatives should improve automation, boost productivity, and deepen customer engagement across the platform.

What next for Xero shares?

Another factor likely supporting today's rally was Xero's announcement of a NZ$550 million share buyback. Buybacks are often interpreted as a sign management believes the market has become overly pessimistic about the company's valuation.

And after a 53% share price collapse over the past year, investors may finally be starting to view Xero shares as oversold.

Of course, risks still remain. The company continues investing heavily in growth, particularly in the US. Investors will want evidence that margins can eventually stabilise and recover. Tech sector volatility also remains elevated more broadly.

Still, today's powerful rebound suggests many investors believe the market may have overreacted to Thursday's sell-off. And that Xero's long-term growth story remains very much intact.

The post Why are Xero shares turning heads today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.