If you're exploring fast-growing tech stocks on the ASX, there's a fair chance that Nextdc Ltd (ASX: NXT) and Megaport Ltd (ASX: MP1) are on your radar. Both are data and connectivity specialists, but their businesses, growth profiles, and market appeal have some key differences. Here's how I see Nextdc vs Megaport shares stacking up for investors looking for high-growth exposure to digital infrastructure.

The case for Nextdc

Nextdc is a leader in building and operating data centres across Australia, New Zealand, and Southeast Asia. Its business focuses on co-location services—providing secure spaces, power, cooling, and connectivity for clients to house their servers. Customers can interconnect with each other, as well as global cloud companies and telcos. With more than 1,700 customers as of December 2022, Nextdc enables enterprises of all sizes to boost data security and transfer speeds, all while providing extra options for technical and project support.

A couple of key things jump out at me here:

• Market leadership and scale: With a market cap of $8.54 billion and a huge customer base, Nextdc is a giant in its field domestically.
• Consistent revenue base: While revenue figures aren't quoted, the physical infrastructure and 'sticky' customer relationships suggest recurring income, which I like for business stability.
• Profitability: Nextdc is profitable, posting positive earnings per share of $0.122 and a (lofty) P/E of 95.98.

But, it's important to point out that the company doesn't pay a dividend and has actually delivered a negative year-to-date (YTD) return of -5.05%.

The case for Megaport

Megaport is a different kind of tech play. Instead of owning data centres, Megaport is a global network-as-a-service provider, connecting clients to over 1,100 data centres across 31 countries. Its tech lets customers connect to Amazon Web Services, Azure, Google Cloud, and dozens of other cloud platforms quickly, flexibly, and with no long-term lock-ins. Megaport expanded in late 2025 by acquiring Latitude.sh, pushing into on-demand cloud compute and AI GPU infrastructure. Its operations now span the Americas, Asia-Pacific, and EMEA, with a dedicated Compute arm.

Here's what stands out to me about Megaport:

• Rapid global growth: The company's reach and ability to provide on-demand, flexible cloud connections is unique among local peers.
• Not (yet) profitable: Megaport still has negative earnings per share (-$0.218).
• Impressive share price momentum: MP1's year-to-date return is a massive 39.09%—a big contrast with Nextdc.

Dividends are again off the table, with both companies focused squarely on growth.

Valuation comparison

There's a clear difference in how the market values these two, reflecting their place on the growth–profitability spectrum:

Nextdc is much larger, is profitable (albeit with rich pricing), and trades at a lower P/E. Megaport is far more expensive on a P/E basis, unprofitable, but clearly has the market excited about its expansion and growth prospects.

Recent share price performance

Looking at closing prices as of 15 September 2026 (not live data), there's a stark difference:

• Nextdc has fallen from $13.81 at the end of August to $11.24—as much as a 4% drop in a single day, and a clear downtrend over these weeks.
• Megaport has shown some volatility, but after a big dip mid-month, quickly bounced and sits at $16.79, up from $16.54 at end of August and up a whopping 39% for the year-to-date. The recent days included an 8.3% one-day fall, but this was swiftly offset by a 2.7% bounce.

I can see investors have recently flocked to Megaport much more enthusiastically than Nextdc.

Which is the better buy?

Comparing Nextdc vs Megaport shares, I'd lean toward Megaport right now if I had to pick just one. Here's why: its revenue growth and commercial momentum look stronger, even though it's not yet profitable. Nextdc is solid and profitable but losing momentum, and its negative YTD return is a worry for a growth stock. That said, paying up for Megaport means accepting a lot of future risk—it's priced for exceptional growth and any slip could hurt. But purely on growth and market momentum, my pick would be Megaport, with the caveat that it's not for those wanting value or stability.

The post Nextdc vs Megaport: Which ASX tech growth share comes out on top? appeared first on The Motley Fool Australia.

At the time of writing, the ASX 200 is down around 1% for the day, and is now roughly 2% lower than 12 months ago.

But brokers have pinpointed some ASX 200 shares that could help lift the index over the next year. Here are two of them, and they're forecast to return up to 83% to investors.

NextDC Ltd (ASX: NXT)

NextDC operates data centres in Australia, New Zealand, and Southeast Asia. The company builds and operates secure facilities where businesses can house their servers and IT equipment. 

It has physical centres, cooling, power, security services, and project support. And as data usage explodes, demand for secure, high-quality infrastructure is likely to grow alongside it.

The company is also investing heavily in expanding its business, with plans to accelerate the development of new facilities and expand existing sites, including its Sydney projects. 

Just last week, the company confirmed it had secured a $1.1 billion funding boost to support its growth plans.

The company will also be added to the S&P/ASX 50 Index (ASX: XFL) as part of a quarterly rebalance, effective from the 21st of September.

Late last month, the company also reported a record FY26 result, including a 16% increase in total revenue, a 16% increase in net revenue, and a 15% increase in underlying EBITDA. Net revenue and underlying EBITDA figures came in above guidance.

For FY27, NextDC has guided net revenue between $615 million and $640 million and underlying EBITDA between $385 million and $410 million, representing expected growth of over 50%.

Brokers are very bullish about the outlook for the ASX 200 shares over the next 12 months. Market Index data shows all brokers have a strong buy rating on the stock, and the $20.79 average target price implies a potential upside of 83% at the time of writing.

Mesoblast Ltd (ASX: MSB)

The clinical-stage ASX biotech company has had a slow start to 2026 but leapt higher in mid-July. The shares have slumped again over the past month, seemingly on the back of increased investor caution around clinical timelines and profit-taking following the mid-year rally.

Late last month, the company reported a sharp increase in revenue to US$120.3 million for FY26 (up from US$17.2 million in FY25) and a 44% reduction in net loss to US$57.5 million.

But there are opportunities for robust growth going forward. Mesoblast develops and commercialises allogeneic cellular medicines to treat complex diseases. Some products are already in use, and other cell therapies are in the late stages of clinical trials. 

Some of its products, particularly Mesoblast's Ryoncil, are gaining traction, and the business is well funded. 

Looking ahead, Mesoblast said it plans to expand its Ryoncil label to adults with severe SR-aGvHD and further advance development for chronic low back pain using rexlemestrocel-L. 

The company is also planning to develop next-generation cell therapies through new CAR-MSC and oncolytic virus technologies, broadening its pipeline for inflammatory and immunological diseases.

Brokers are also bullish that business growth and sales can continue growing strongly in FY27. Market Index data shows all brokers agree on a strong buy rating for the ASX 200 shares. The $3.60 average target price implies a potential 73% upside, at the time of writing. 

The post 2 ASX 200 shares tipped by brokers to return 73% and 83% appeared first on The Motley Fool Australia.

Shares in the S&P/ASX 200 Index (ASX: XJO) data centre operator and developer closed yesterday trading for $11.71. In morning trade on Tuesday, shares are changing hands for $11.51 apiece, down 1.7%.

For some context, the ASX 200 is down 0.5% at this same time.

Taking a step back, the ASX tech stock has also trailed the benchmark index over the last full year, falling 32.2% compared to the 1.7% one-year decline posted by the ASX 200.

Looking ahead, however, Shaw and Partners' James Bills believes that NextDC shares are well positioned for "attractive" long-term growth (courtesy of The Bull).

Here's why.

Should I buy NextDC shares today?

Citing the first reason he's bullish on the ASX 200 tech stock, Bills said, "The company continues to benefit from strong demand for data centre infrastructure, driven by cloud computing, artificial intelligence and increasing digitalisation across the economy."

Then there's the company's fast-growing capacity.

"NXT is expanding capacity across key Australian markets and maintains a strong development pipeline to support future growth," Bills said.

And summarising the third reason he issued a buy recommendation on NextDC shares, Bills concluded:

While investment spending remains elevated, management continues to secure long-term customer contracts that provide earnings visibility. With structural growth tailwinds expected to persist for many years, NXT remains well positioned to deliver attractive long-term shareholder returns.

What's the latest from the ASX 200 tech stock?

NextDC reported its full-year FY 2026 results after market close on 27 August.

Highlights included a 16% year-on-year increase in revenue to $496.5 million.

And, as Bills mentioned above, investment spending indeed remains elevated. In FY 2026, NextDC reported all-time high capital expenditure of $3.397 billion.

On the bottom line, the company achieved a statutory net profit after tax (NPAT) of $82.1 million, up from a $60.5 million net loss the prior year.

Looking at what could impact NextDC shares in FY 2027 ahead, the company forecasts net revenue between $615 million and $640 million. On the higher end, that would represent growth of 29% from FY 2026 revenue.

Commenting on the company's performance, NextDC CEO Craig Scroggie said:

FY26 was the largest contracting year in NEXTDC's history. Contracted utilisation tripled to 740.1MW on a pro forma basis, and we exceeded guidance on both net revenue and Underlying EBITDA.

Our Forward Order Book of 565MW is now more than 3.2 times our billing utilisation, and our focus is on delivering that capacity and converting it into revenue and cash inflow.

NextDC shares closed up 2.1% on the first trading day following the results release.

The post Down 32%: 3 reasons to buy the BIG dip in NextDC shares today appeared first on The Motley Fool Australia.

Here's what they are recommending this week:

Aurizon Holdings Ltd (ASX: AZJ)

The team at Baker Young has named this rail freight operator as an ASX share to buy this week.

It likes Aurizon due to its positive outlook and attractive dividend yield. Baker Young said:

This coal and freight logistics firm delivered better than expected full year 2026 results, in our view. Revenue of $4.194 billion was up 6 per cent on the prior corresponding period and statutory net profit after tax of $362 million was up 19 per cent. A highly encouraging performance at its containerised freight division provides a long term opportunity, in our view. 

Strong global coal prices amid favourable weather conditions to date in New South Wales and Queensland should generate demand for export logistics. While competition for haulage contracts may lower margins, the business outlook remains positive. It was recently trading on an attractive dividend yield above 6 per cent.

NextDC Ltd (ASX: NXT)

Over at Shaw and Partners, its analysts have named data centre operator NextDC as an ASX share to buy.

It highlights that NextDC continues to benefit from strong demand for data centre infrastructure, which is being driven largely by the artificial intelligence boom.

The good news is that Shaw and Partners believes these structural growth tailwinds will persist for many years. It said:

The company continues to benefit from strong demand for data centre infrastructure, driven by cloud computing, artificial intelligence and increasing digitalisation across the economy. NXT is expanding capacity across key Australian markets and maintains a strong development pipeline to support future growth. 

While investment spending remains elevated, management continues to secure long term customer contracts that provide earnings visibility. With structural growth tailwinds expected to persist for many years, NXT remains well positioned to deliver attractive long term shareholder returns.

Temple & Webster Group Ltd (ASX: TPW)

Baker Young has also named online furniture and homewares retailer Temple & Webster as an ASX share to buy this week.

It is feeling upbeat on the investment opportunity here following a leadership change and its positive medium term growth outlook. It explains:

We don't regularly play high growth consumer discretionary stocks, but we see an opportunity emerging in this online furniture and homewares retailer. The company delivered record revenue of $664.6 million in full year 2026, up 10.6 per cent on the prior corresponding period. It's worth noting that new chief executive Susie Sugden was previously the chief marketing officer during the company's highly successful infancy between 2016 and 2020. The company is focusing on improving margins, which, in our view, is conservative and prudent given the incredibly challenging conditions in the retail sector. 

We believe new management deserves an opportunity to rebase expectations in a sector offering medium term upside. Also, we believe accumulating a position is worth considering for those willing to take relatively high volatility risk.

The post Experts name 3 top ASX shares to buy this week appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set for a decent start to the week following a good session on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 18 points or 0.2% higher. In the United States, the Dow Jones was up 1%, the S&P 500 rose 0.85%, and the Nasdaq stormed 0.95% higher.

Oil prices fall

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) will be on watch on Monday after oil prices pulled back on Friday night. According to Bloomberg, the WTI crude oil price was down 2.4% to US$100.05 a barrel and the Brent crude oil price was down 2.8% to US$104.61 a barrel. However, an escalation in the Middle East over the weekend could send oil prices higher when Asian markets open.

Buy NextDC shares

NextDC Ltd (ASX: NXT) shares could be worth a look according to Shaw and Partners. This morning, according to The Bull, its team has named the data centre operator as a buy. It said: "While investment spending remains elevated, management continues to secure long term customer contracts that provide earnings visibility. With structural growth tailwinds expected to persist for many years, NXT remains well positioned to deliver attractive long term shareholder returns."

Gold price edges higher

It could be a mildly positive start to the week for ASX 200 gold shares Capricorn Metals Ltd (ASX: CMM) and Northern Star Resources Ltd (ASX: NST) after the gold price edged higher on Friday night. According to CNBC, the gold futures price was up slightly to US$4,408.9 an ounce. Traders were buying the dip despite increasing US rate hike bets.

ASX shares going ex-dividend

Another group of ASX shares are going ex-dividend this morning and could trade lower. Among them are debt collector Credit Corp Group Ltd (ASX: CCP), telco Chorus Ltd (ASX: CNU), travel and transport company Kelsian Group Ltd (ASX: KLS), and airline operator Virgin Australia Holdings Ltd (ASX: VGN). The latter is paying a fully franked 7.6 cents per share dividend next month on 15 October.

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

Oil prices surged as Iran-backed Houthi rebels in Yemen moved closer to shutting down Saudi Arabia's alternative oil export route.

Over the weekend, Iran said it would meet Gulf states in Oman to discuss the Strait of Hormuz, which has been blocked since March.

This led to an easing in the Brent crude oil price, down from nearly US$110 per barrel on Friday to US$104 per barrel on Sunday.

Let's check out some new ratings on ASX 200 shares for the week (courtesy The Bull).  

NextDC Ltd (ASX: NXT)

The NextDC share price fell 6.22% to $12.06 on Friday.

The ASX 200 tech share is down 29% over 12 months. 

James Bills from Shaw and Partners has a buy rating on NextDC shares.

Bills said: 

The company continues to benefit from strong demand for data centre infrastructure, driven by cloud computing, artificial intelligence and increasing digitalisation across the economy.

NXT is expanding capacity across key Australian markets and maintains a strong development pipeline to support future growth.

While investment spending remains elevated, management continues to secure long term customer contracts that provide earnings visibility.

With structural growth tailwinds expected to persist for many years, NXT remains well positioned to deliver attractive long term shareholder returns.

South32 Ltd (ASX: S32)

The South32 share price declined 3.82% to $5.02 on Friday.

The ASX 200 mining share is up 92% over 12 months. 

Joshua Baker from RaaS Group has a hold rating on South32 shares.

Baker said: 

South32 is a diversified miner with exposure to copper, aluminium, manganese, zinc, silver and lead. It recently announced the sale of its aluminium value chain assets to Alcoa for up to $US5.6 billion.

The company continues to invest in the Hermosa development to grow its future base metals production. A hold recommendation is driven by stronger commodity price outlooks in key metals, including zinc.

Consequently, this can support underlying earnings and operating cash flow growth to offset the expectation of higher investment levels to support a longer term strategic plan. Underlying EBITDA grew by 28 per cent in fiscal year 2026.

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price fell 3.88% to $154.19 on Friday.

The ASX 200 bank share has fallen 9% over 12 months.

Bills has a sell rating on CBA shares.

He explained: 

In our view, the stock trades at a significant premium to domestic peers and on historical valuations.

While the bank maintains a high quality franchise and strong market position, earnings growth is expected to remain modest amid competitive lending conditions and regulatory pressures.

Recent Federal Government initiatives aimed at increasing housing supply and improving affordability is likely to lead to intensifying competition across the mortgage market and place pressure on lending margins.

Current valuations leave limited scope for further earnings driven upside. Investors may wish to take profits and re-deploy capital into opportunities offering stronger risk-adjusted return potential.

The post Buy, hold, sell: NextDC, South32, CBA shares appeared first on The Motley Fool Australia.

That doesn't automatically make them bargains, but I think it can create an opportunity when the long-term business case remains strong.

These are two ASX shares I would be comfortable buying at today's lower prices.

Cochlear Ltd (ASX: COH)

Cochlear shares are trading around $137.88 at the time of writing, compared with a 52-week high of $303.74. That puts the stock roughly 55% below its high.

I think the size of that fall deserves attention because Cochlear still operates in a market with a significant amount of unmet demand.

The company develops cochlear implants for people with severe hearing loss, yet many potential candidates around the world are never referred for treatment or ultimately receive an implant.

For me, that leaves a long runway even before considering population growth and ageing.

Cochlear also continues to improve the technology itself. Its newer Nucleus Nexa platform gives the company another opportunity to encourage upgrades and make treatment more attractive to future recipients. Longer term, developments such as personalised stimulation, drug-eluting electrodes, and potentially totally implantable devices could continue improving the patient experience.

Healthcare companies can go through periods when growth disappoints or investors become less willing to pay premium valuations. I think that's where we are right now. But that disappointment won't last forever.

As such, I would be happy to buy Cochlear at today's level and give the underlying growth opportunity time to play out.

Nextdc Ltd (ASX: NXT)

NEXTDC shares are also trading well below their previous high.

At around $12.30 at the time of writing, the data centre operator is roughly 31% below its 52-week high of $17.85.

I continue to think the long-term opportunity behind the ASX share is substantial. NEXTDC is investing heavily to expand its data centre network as demand grows from cloud computing, artificial intelligence, and other digital workloads.

What I like is that the company already has a large amount of customer demand contracted before all that capacity has been completed. That gives me more confidence in the expansion strategy.

As new data halls are completed and contracted, and customers begin using them, more of that capacity should start contributing revenue.

There is still plenty to watch. Data centres require enormous amounts of capital, and NEXTDC needs to build efficiently, secure sufficient power, and manage its funding as the network expands. But those are risks I am willing to accept given the scale of the opportunity.

At $12.30, I think investors are getting a much more attractive entry point than they had near the 52-week high.

Foolish takeaway

Neither Cochlear nor NEXTDC needs to return to its previous high for me to be interested today.

I like the growth opportunities behind both businesses, while their much lower share prices give investors a very different entry point from where they traded previously.

If Cochlear keeps reaching more patients and NEXTDC successfully converts its contracted demand into operating data centre capacity, I think both ASX shares have plenty of room to recover over the years ahead.

The post 2 ASX shares I'd buy before they return to their 52-week highs appeared first on The Motley Fool Australia.

The paradox is striking. NEXTDC is raising billions to capitalise on booming AI demand, yet investors appear increasingly concerned about how much it will cost to turn that demand into profits.

AI opportunity comes with a huge bill

The funding solves one problem, but highlights another.

NEXTDC is seeing customers reserve enormous amounts of data centre capacity well before the infrastructure is ready to generate revenue. At the end of FY26, contracted utilisation had reached 740.1MW, but only 175MW was already billing.

That leaves a substantial gap between capacity customers have committed to and infrastructure actually generating revenue.

Earlier this year, NEXTDC estimated its existing contracted utilisation could eventually generate more than $1 billion of EBITDA once delivered, without assuming any additional customer wins.

That sounds compelling. The catch is that delivering all that capacity requires an extraordinary amount of capital.

NEXTDC has been tapping equity, debt, and hybrid funding to accelerate construction, while its major developments require access to land, power, equipment, and skilled workers.

That makes execution critical for NEXTDC shares. Any delays, cost overruns, financing pressures, or slowdown in AI infrastructure spending could reduce the returns investors ultimately receive.

There can also be a lengthy lag between signing a customer and bringing new capacity online and generating revenue.

Investors are focusing on capital intensity

The scale of NEXTDC's spending plans helps explain the market's caution.

The company expects to spend between $5.25 billion and $5.75 billion in FY27, representing roughly 55% to 70% growth from FY26, as it races to build capacity for AI and cloud customers.

The latest $1.1 billion convertible notes issue is also NEXTDC's third capital raising in just over four months.

For investors in NEXTDC shares, that reinforces an uncomfortable reality: the AI data centre boom may create enormous demand, but meeting that demand requires enormous upfront investment.

And higher interest rates make capital-intensive infrastructure businesses particularly sensitive to financing costs.

That's why NEXTDC shares have fallen roughly 14% over the past month even as contracted utilisation has surged to about 740MW and the company carries a 565MW forward order book.

Foolish takeaway

The market isn't necessarily questioning whether customers want NEXTDC's infrastructure.

It's questioning how much capital NEXTDC needs to spend before those megawatts translate into sustainable revenue and cash flow.

For shareholders, that's the key tension behind the recent sell-off of NEXTDC shares.

The post NEXTDC shares are falling despite $1.1 billion funding boost. Here's why appeared first on The Motley Fool Australia.

While it's true that Australia doesn't have a direct equivalent to Nvidia Corp (NASDAQ: NVDA) or the major US technology giants driving the AI revolution, that doesn't mean Australian investors are shut out of the opportunity. 

The AI buildout requires far more than chips and software. It also requires vast amounts of data centre capacity, electricity, land, and connectivity.

For investors looking to gain exposure to the artificial intelligence boom through Australian equities, these companies offer three different ways of owning the physical infrastructure behind AI. 

Nextdc Ltd (ASX: NXT)

NEXTDC offers perhaps the most direct Australian exposure to the physical infrastructure required to power the AI boom. 

The company operates high-performance data centres that house the servers, GPUs, and networking equipment. This is used by cloud providers, enterprises, and AI companies. 

As AI models become more computationally intensive, demand is shifting towards high-density data centres with significantly greater power and advanced liquid-cooling capabilities. 

These are areas in which NEXTDC is investing heavily. 

The argument for NextDC is quite straight forward. 

If the world needs dramatically more computing power to develop and run AI, it needs dramatically more data centre capacity to house that computing power.

Experts seem to agree. UBS recently placing a buy rating with a $23.45 target, implying more than an 80% upside.

Goodman Group (ASX: GMG)

Goodman Group provides a less obvious, but potentially powerful, way to gain exposure to the AI buildout. 

While traditionally known as a global logistics property group, Goodman has been rapidly expanding into data centre infrastructure.

Its competitive advantage lies in controlling the land, power, and development capability needed to build large-scale facilities. 

This is increasingly important because AI data centres are constrained by demand. They are also constrained by access to suitable sites, electricity, and network connectivity. 

In other words, Goodman is a way to invest in the scarce physical resources that AI infrastructure needs.

It has also drawn positive attention from experts this month. 

Megaport Ltd (ASX: MP1)

Megaport sits further up the AI infrastructure stack, providing the connectivity that allows data, cloud platforms, and computing resources to communicate with one another. 

AI workloads are extraordinarily data intensive, requiring fast, reliable connections between data centres, cloud providers, GPUs, and end users. 

Megaport operates a software-defined networking platform spanning more than 1,200 enabled data centres and 30 countries, making it a potential beneficiary as AI drives greater volumes of data across networks.

Brokers are expecting almost 40% share price growth in the next 12 months on the back of its recent earnings results. 

The post You don't need to own Nvidia to invest in AI – Here are the best Aussie artificial intelligence shares appeared first on The Motley Fool Australia.

What did NEXTDC report?

• Issued $1.1 billion of 1.75% subordinated convertible notes due 2031
• Net proceeds expected to be approximately $1.006 billion after Capped Call Transactions and before other costs
• Initial conversion price set at $16.695 per ordinary share, a 32.5% premium to the $12.60 reference price
• Pro forma available liquidity at 30 June 2026 would have been about $9.8 billion, before costs
• Convertible notes to mature in September 2031 and are listed on the Vienna Multilateral Trading Facility

What else do investors need to know?

The notes issue broadens NEXTDC's funding base and supports its ongoing data centre development pipeline. The offering is seen as a way to maintain balance sheet flexibility, with the notes ranking junior to existing senior debt but above ordinary shares.

A Delta Placement of around 18.6 million existing ordinary shares was completed at $12.60 per share to facilitate hedging for investors. This does not result in new shares being issued or direct proceeds to NEXTDC.

The company also entered into capped call transactions, providing an economic hedge for share price increases up to a cap price of $21.42 per share, a 70% premium to the reference price.

What did NEXTDC management say?

Craig Scroggie, NEXTDC Chief Executive Officer and Managing Director, said:

I am pleased to see such strong support for the Offering. The transaction provides NEXTDC with efficient, committed funding for our development pipeline and diversifies NEXTDC's sources of capital with a new deep global investor base whilst preserving our senior debt capacity and balance sheet flexibility.

What's next for NEXTDC?

With this convertible notes offering, NEXTDC has secured significant resources to fund its planned development and expansion across Australia. The company continues to prioritise a strong balance sheet and funding flexibility as it invests in its data centre infrastructure.

NEXTDC plans to continue delivering on its development pipeline for data centre projects, supporting customer-driven growth and scaling up its technology platform for the digital economy.

NEXTDC share price snapshot

Over the past 12 months, NEXTDC shares have declined 24%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 1% over the same period.

View Original Announcement

The post NEXTDC secures $1.1bn in convertible notes for data centre growth appeared first on The Motley Fool Australia.

What did NEXTDC report?

• Launched A$1.1bn fixed coupon subordinated convertible notes due 2031
• Notes carry an indicative cash coupon of 1.25%–1.75% per annum, below current senior debt levels
• Initial conversion price to be set 32.5%–37.5% above reference share price, with additional capped call option up to 70% premium
• Pro forma liquidity at 30 June 2026 would have been approximately A$9.8bn post-offer
• Proceeds intended for development pipeline, capped call options, and general corporate purposes

What else do investors need to know?

NEXTDC's new convertible notes offer more flexibility and carry a lower cash interest rate than the company's existing senior debt. This lets NEXTDC fund major infrastructure projects while preserving balance sheet strength and headroom for further growth.

The notes are expected to be listed on the Vienna Multilateral Trading Facility and target institutional investors, rather than retail or ASX listing. A "Delta Placement" of up to A$330 million in existing shares will support initial hedging by note investors and sets the reference price for conversion.

NEXTDC's pro forma liquidity position rises to nearly A$9.8 billion, helping its ambitions to continue expanding its pipeline of data centres across Australia and maintaining operational resilience.

What did NEXTDC management say?

Craig Scroggie, CEO and Managing Director, said:

We are proactively enhancing balance sheet flexibility with efficient capital and continuing to deliver on our capital strategy. The convertible structure funds the next phase of our development pipeline at a lower cash coupon than senior debt and the capped call transactions effectively raise the conversion price and therefore reduce the economic cost of dilution that would otherwise occur. The Offering preserves our senior debt capacity and our balance sheet flexibility to meet the continued growth in customer demand for the capacity NEXTDC is building.

What's next for NEXTDC?

NEXTDC intends to use the new capital to deliver on its Australian development pipeline, cover transaction costs, and maintain corporate flexibility. The company says the convertible note structure and capped call options will help manage dilution risks while keeping funding costs down.

By continuing to diversify its funding sources and enhance its liquidity, NEXTDC aims to support strong customer-led growth and maintain a robust balance sheet—positioning the business well for further expansion both in Australia and internationally.

NEXTDC Limited share price snapshot

Over the past 12 months, NEXTDC shares have declined 23%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 1% over the same period.

View Original Announcement

The post NEXTDC launches $1.1bn convertible notes to fund data centre growth appeared first on The Motley Fool Australia.

I would want to use the money on businesses I can see owning for years, with enough growth ahead to make patience worthwhile.

These three would be high on my list.

BHP Group Ltd (ASX: BHP)

I would put $2,000 into BHP.

The mining giant gives investors exposure to commodities that should remain important as the global economy develops, including iron ore and copper.

Copper is particularly interesting to me over the longer term. Electrification, renewable energy infrastructure, data centres, and expanding power networks all require significant amounts of the metal.

BHP already has major copper operations and continues investing to increase its output.

Its enormous iron ore business also remains important. BHP generates substantial cash flow that can support investment elsewhere in its portfolio, as well as dividends for shareholders when conditions allow.

Commodity prices will always move around, so BHP is unlikely to deliver smooth earnings growth every year.

But I think its scale, asset quality, and exposure to resources the world will continue needing make it a strong long-term holding.

Wesfarmers Ltd (ASX: WES)

I would invest another $1,500 in Wesfarmers.

What I like about Wesfarmers is the collection of businesses under its control.

Bunnings has built a particularly strong position in Australian home improvement, while Kmart has become an increasingly important contributor through its low-cost retail model. Officeworks and the group's other operations add further sources of earnings.

These businesses also give Wesfarmers plenty of opportunities to keep improving rather than relying on one major expansion project.

Management can reinvest in existing operations, develop new opportunities, or direct capital towards areas where it sees better returns.

Wesfarmers shares are rarely priced like a bargain, and I would still pay attention to valuation. But for a long-term investment, I think there is value in owning a company with strong brands, experienced capital allocation, and several ways to grow over time.

NEXTDC Ltd (ASX: NXT)

My remaining $1,500 would go into NEXTDC.

This would be the most growth-focused investment of the three. NEXTDC develops and operates data centres across Australia and other Asia-Pacific markets. Demand for this infrastructure is increasing as businesses move more workloads into the cloud and artificial intelligence drives much greater computing requirements.

What gives me confidence in the opportunity is that NEXTDC is not simply building capacity and hoping customers eventually arrive.

The company has secured substantial contracted demand for future data-centre capacity, which gives it visibility over facilities that are still being developed.

There is plenty of execution risk. Data centres require enormous amounts of capital, and NEXTDC needs to deliver new projects efficiently while managing its funding requirements.

I still think the potential reward is attractive if demand continues growing as expected.

Foolish takeaway

If I had $5,000 available today, I would be comfortable spreading it across these three ASX shares.

BHP shares would give me exposure to long-term commodity demand, Wesfarmers brings a collection of high-quality Australian businesses, and NEXTDC offers much stronger exposure to the expansion of digital infrastructure.

I think that gives the money several opportunities to grow without relying on one company or one part of the economy.

The post Why I'd buy BHP and these ASX shares with $5,000 appeared first on The Motley Fool Australia.

Earnings season has ended and analysts have refreshed their price targets across hundreds of companies.

The three below have all fallen heavily over the past year.

All three are still growing earnings, which is what makes the gap interesting.

Why these ASX growth shares were sold off

The cause is the same in each case.

Interest rate expectations have moved sharply, with all four major banks now forecasting another rise this year.

Higher rates hit companies valued on distant earnings hardest, and they hit companies funding growth with debt harder still.

None of these three fell because of a downgrade.

Each of them reported growth in FY26.

1. NEXTDC Ltd (ASX: NXT)

NEXTDC closed Tuesday at $12.52 after falling 14% in a month.

UBS has a buy rating with a $23.45 target, implying 88% upside.

The FY26 result was a record.

Net revenue rose 16% to $405.0 million and underlying EBITDA rose 15% to $248.8 million, both above guidance.

Contracted utilisation surged 202% to 740.1 megawatts and statutory net profit turned positive at $82.1 million.

FY27 guidance points to net revenue of $615 million to $640 million, growth above 50%.

The catch is the capital expenditure required to deliver it, guided at $5.25 billion to $5.75 billion.

2. Nine Entertainment Co Holdings Ltd (ASX: NEC)

Nine Entertainment is the cheapest and most contrarian of the three.

Shares closed at 86 cents, down 48.19% over twelve months and barely above a 52-week low of 83.5 cents.

Morgan Stanley has a buy rating with a $1.40 target, implying 63% upside.

FY26 revenue rose 3% to $2.19 billion on a continuing business basis and group EBITDA jumped 17% to $379 million.

Net profit after tax increased 7% to $142.4 million and earnings per share before amortisation rose 11% to 9.3 cents.

The QMS Outdoor acquisition contributed $55 million of EBITDA in its first three months.

Similarly, digital subscription revenue grew 12%, and Nine has signed content licensing deals for AI applications including one with Microsoft.

Chief executive Matt Stanton explained the reshaping of the portfolio.

Over the past 12 months, we have made material changes to our business portfolio, focusing on growth and digital assets whilst reducing our exposure to structurally challenged and smaller assets. These transactions add to our operational scale and create a higher growth and more resilient Nine, better positioned to create long term sustainable value for our shareholders.

The final dividend of 3.0 cents is unfranked, and management expects that to continue.

3. Zip Co Ltd (ASX: ZIP)

Zip has the most bullish coverage on the ASX.

All twelve analysts covering the company rate it a buy or strong buy, with an average target of $4.56 against a $2.31 share price.

That implies roughly 95% upside, with the most optimistic target at $6.03.

FY26 cash EBTDA rose 57.9% to $268.9 million and revenue climbed 24.7% to $1,336.1 million.

Net profit after tax increased 45.7% to $116.4 million and the operating margin expanded from 15.8% to 20.0%.

Management has guided FY27 cash EBTDA to $340 million, up around 26%.

The United States now produces about two-thirds of revenue, and that is where the growth is coming from.

Foolish takeaway

Broker targets are opinions, not forecasts, and a 90% implied upside usually means high uncertainty rather than free money.

What these three ASX growth shares share is a market that has repriced their respective multiples.

I would rather buy a company growing revenue at 16% to 25% after a 50% fall than chase one already compounding.

The post 3 ASX growth shares experts think could double appeared first on The Motley Fool Australia.

The stock closed Tuesday at $12.52, down 23.28% over twelve months.

Goodman Group (ASX: GMG) has done no better, falling 19.03% over the same period.

Why NextDC shares have fallen while demand has not

Westpac moved its cash rate forecast to a November rise this week. One reason cited was the scale of investment in data centres and the renewable electricity they need.

That is an unusual situation.

The boom is now considered inflationary enough to justify tighter policy, yet the two ASX shares most exposed to it have been sold down hard.

That is because building data centres consumes enormous amounts of money before it produces any, and higher rates raise the cost of that money.

What NEXTDC actually reported

The FY26 result was the biggest in the company's history.

Total revenue rose 16% to $496.5 million and net revenue rose 16% to $405.0 million, above guidance.

Underlying EBITDA lifted 15% to $248.8 million, also above guidance.

Statutory net profit swung to a positive $82.1 million from a $60.5 million loss.

The forward-looking numbers are the striking part.

Contracted utilisation surged 202% to 740.1 megawatts.

The forward order book stands at 565.1 megawatts, more than three times current billing utilisation.

Capital expenditure hit a record $3,397 million and pro forma liquidity rose 58% to $8.7 billion.

Chief executive Craig Scroggie set out what happens next.

FY26 was the largest contracting year in NEXTDC's history. Contracted utilisation tripled to 740.1MW on a pro forma basis, and we exceeded guidance on both net revenue and Underlying EBITDA. Our Forward Order Book of 565MW is now more than 3.2 times our billing utilisation, and our focus is on delivering that capacity and converting it into revenue and cash inflow.

FY27 guidance calls for net revenue of $615 million to $640 million and underlying EBITDA of $385 million to $410 million.

That is growth above 50%.

But it also requires capital expenditure of $5.25 billion to $5.75 billion, which is the number that unsettles people.

Goodman is telling the same story

Goodman Group reported FY26 operating profit up 15.7% to $2.67 billion and operating earnings per security up 10.1% to 129.9 cents.

Work in progress reached $19.7 billion, and data centres now make up 78% of it.

Gearing is at just 6.5% with $6.4 billion of liquidity.

Group chief executive Greg Goodman described a market still short of supply.

Demand is structural across both logistics and data centres. Automation and robotics continue to drive logistics requirements while scarcity of power and land remains the key constraint on AI and cloud growth supporting data centre demand. Hyperscaler capex expectations continue to rise, with many customers facing undersupply into 2027 and 2028.

Goodman is targeting 9% operating earnings per security growth in FY27.

What I'd do with NextDC shares now

UBS has a buy rating on NextDC with a $23.45 target, implying 88% upside.

That is enormous upside, but it depends entirely on the company converting contracted megawatts into billed revenue on schedule.

The bear case is straightforward.

NextDC pays no dividend, trades on a price-to-earnings ratio above 100, and needs to spend more than $5 billion next year.

Goodman is the lower-risk way to own the same theme, with real earnings, a distribution and almost no debt.

Foolish takeaway

The AI data centre boom is not over, and the contracted numbers make that difficult to argue.

What has changed is the price investors will pay for growth funded by borrowed money.

I would own Goodman for the theme and NextDC only with a long investment horizon.

The post NextDC shares have fallen 14% in a month. Is the AI data centre boom over? appeared first on The Motley Fool Australia.

With earnings season over, brokers have updated their ratings and 12-month price targets on hundreds of ASX shares.

Here are six stocks with strong upside potential.

NextDC Ltd (ASX: NXT)

The NextDC share price is $12.46, down 2.3% today.

Over the past month, this ASX tech share has fallen 14%.

UBS has a buy rating on NextDC shares with a $23.45 target.

This suggests a potential 88% upside ahead.

Nine Entertainment Co. Holdings Ltd (ASX: NEC)

The Nine Entertainment share price is 86 cents, down 3.2% today.

Over the past month, this ASX communications share has dropped 15%.

Morgan Stanley has a buy rating on Nine shares with a 12-month target of $1.40.

This suggests a potential 63% upside ahead.

Qantas Airways Ltd (ASX: QAN)

The Qantas share price is $9.30, down 0.3% today.

This ASX travel share has fallen 11% over the past month.

Morgan Stanley has a buy rating on Qantas shares with a $12.80 target.

This implies potential capital growth of 38% over the next year.

Centuria Capital Group (ASX: CNI)

The Centuria Capital Group share price is $1.33, up 3.7% today.

Over the past month, this ASX real estate investment trust (REIT) has fallen 11%.

MA Financial Group has a buy recommendation on Centuria Capital Group shares with a $1.83 target.

This indicates potential capital gains of 38% over the next year. 

Paladin Energy Ltd (ASX: PDN)

The Paladin Energy share price is $11.61, down 0.9% today.

Over the past month, this ASX uranium share has spiked 12%.

Canaccord Genuity has a buy call on Paladin Energy shares with a $15.80 target.

This suggests a potential 36% upside ahead.

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price is $168.81, up 0.1% today.

Over the past month, this ASX healthcare share has fallen 4%.

Bell Potter has a buy rating on Pro Medicus shares with a $226 target.

This indicates capital gains of 34% over the next year. 

In a note, the broker commented:

PME reported FY26 revenue and EBIT growth of 23% and 26% respectively with the result at EBIT modestly (1.5%) ahead of consensus earnings.

As the revenue base of the group expands the top line growth is decelerating, however, margin expansion continues and this drove the small earnings beat.

FY26 EBIT margin expanded by a further 190bps to 75% and is likely to continue at this rate for the foreseeable future.

The post 6 ASX shares tipped by brokers to rise 34% to 88% appeared first on The Motley Fool Australia.

I think the opportunity could become much larger from here.

For investors comfortable with the risks that come with such rapid expansion, NEXTDC would be high on my ASX AI buy list.

AI needs somewhere to run

The investment case starts with a simple physical constraint.

AI requires enormous amounts of computing power, and that infrastructure needs secure buildings, huge amounts of electricity, sophisticated cooling, and reliable connections to networks and cloud platforms.

NEXTDC builds and operates the data centres that bring those requirements together.

AI is also changing what customers need from these facilities. NEXTDC says demand is moving towards larger deployments, higher power densities, and infrastructure capable of supporting advanced computing and liquid cooling.

I like this position because NEXTDC does not need to predict which AI model or application will eventually dominate.

If companies continue spending heavily on computing infrastructure, they will need somewhere capable of running it.

Customers are already committing

The strongest part of the story for me is that NEXTDC is seeing customers reserve enormous amounts of capacity ahead of delivery.

At the end of FY26, contracted utilisation had reached 740.1MW, while only 175MW was already billing.

That gap represents a substantial amount of contracted capacity still to be built, delivered, and eventually converted into revenue.

Earlier in 2026, NEXTDC estimated that its contracted utilisation at the time could generate more than $1 billion of EBITDA once delivered, without assuming additional customer wins.

For me, this makes the AI thesis much more tangible.

NEXTDC is investing billions of dollars because customers are signing contracts for capacity, rather than management simply building facilities and hoping demand arrives later.

There is a price for rapid expansion

This opportunity requires an extraordinary amount of capital.

NEXTDC has been raising equity, debt, and hybrid funding to accelerate construction, while major developments need access to land, power, equipment, and skilled workers.

Execution, therefore, becomes critical. Delays, cost overruns, financing pressures, or slower AI infrastructure spending could all hurt returns. Investors also need patience because there can be a long gap between signing a customer and the new capacity beginning to generate revenue.

I think those risks justify treating NEXTDC as a growth investment rather than assuming AI demand guarantees success.

Foolish takeaway

What excites me about NEXTDC is the amount of future business already taking shape.

AI is pushing computing requirements sharply higher, and customers are committing to NEXTDC's capacity years before much of it starts billing.

There is a lot of expensive construction still ahead, but I think this ASX stock has positioned itself in a valuable part of the AI infrastructure chain.

If it delivers the capacity already contracted and continues winning demand, I believe it could become one of the ASX's standout long-term AI investments.

The post Could this be one of the best AI investments on the ASX? appeared first on The Motley Fool Australia.

Following the August reporting season, brokers have reviewed their ratings and 12-month price targets on hundreds of ASX stocks.

Here are some companies that scored reaffirmed buy ratings following their latest financial reports.

CSL Ltd (ASX: CSL)

The CSL share price is $175.12, up 0.7% today.

Over the past month, this ASX 200 healthcare share has ripped 41% higher.

Morgans renewed its buy rating on CSL shares with a 12-month price target of $187.71.

This suggests a potential 7% upside ahead.

Mineral Resources Ltd (ASX: MIN)

The Mineral Resources share price is $63.69, up 2.5% today.

This ASX 200 mining share has ascended 10% over the past month.

RBC Capital reiterated its buy rating on Mineral Resources shares with a price target of $80.

This implies a potential 25% upside ahead.

Santos Ltd (ASX: STO)

The Santos share price is $8.26, up 7.4% today.

This ASX 200 energy share has increased 8% over the past month.

Citi renewed its buy rating on Santos shares.

The broker raised its 12-month price target from $8.30 to $9.

This suggests a potential 9% upside ahead.

BHP Group Ltd (ASX: BHP)

The BHP share price is $64.01, down 1% today after going ex-dividend.

Over the past month, this ASX 200 copper share has risen 5%.

Morgan Stanley reaffirmed its buy rating on BHP shares.

The broker raised its 12-month target from $67.50 to $68.

This suggests a potential 6% upside ahead.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price is $15.46, up 2.3% today.

This ASX 200 mining share has leapt 10% over the past month.

JP Morgan reiterated its buy rating on Lynas shares with a price target of $19.10.

This implies a potential 23% upside ahead.

Nine Entertainment Co. Holdings Ltd (ASX: NEC)

The Nine Entertainment share price is 97 cents, up 1% today.

Over the past month, this ASX 200 communications share has fallen 2%.

Morgan Stanley reaffirmed its buy rating on Nine shares with a 12-month target of $1.40.

This suggests a potential 42% upside ahead.

Coles Group Ltd (ASX: COL)

The Coles share price is $23.58, up 0.3% today.

Over the past month, this ASX 200 consumer staples share has fallen 3%.

Morgan Stanley reiterated its buy rating on Coles shares.

The broker increased its price target from $25 to $25.80.

This implies potential capital gains of 9% ahead.

Qantas Airways Ltd (ASX: QAN)

The Qantas share price is $9.35, up 1.3% today.

This ASX 200 travel share has fallen 9% over the past month.

Morgan Stanley renewed its buy rating on Qantas shares with a $12.80 target.

This implies potential capital growth of 36% over the next year.

NextDC Ltd (ASX: NXT)

The NextDC share price is $12.70, down 0.2% today.

Over the past month, this ASX 200 tech share has fallen 6%.

UBS renewed its buy rating on NextDC shares with a $23.45 target.

This suggests a potential 85% upside ahead.

Paladin Energy Ltd (ASX: PDN)

The Paladin Energy share price is $11.31, up 1.8% today.

Over the past month, this ASX 200 uranium share has soared 20%.

Canaccord Genuity renewed its buy rating on Paladin Energy shares.

The broker raised its 12-month price target from $15.40 to $15.80.

This suggests a potential 40% upside ahead.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is $11.52, down 0.3% today.

Over the past month, this ASX 200 travel share has fallen 13%.

JP Morgan renewed its buy rating on Flight Centre shares with a $15.30 target.

This suggests a potential 32% upside ahead.

The post 11 ASX 200 shares with reaffirmed buy ratings post-results appeared first on The Motley Fool Australia.

The companies behind this trend that are actually building the machines are mostly listed in New York.

Despite this, Australia has world-class research, although none of the company's monetising this is publicly traded.

For example, Silicon Quantum Computing, Diraq, and Q-CTRL are all private.

That leaves three practical routes for ASX investors to get exposure.

The one ASX quantum computing pure play

Archer Materials Ltd (ASX: AXE) is the closest thing the local market has to a direct exposure.

The company is developing a semiconductor qubit chip and employs just eight people.

It carries a market capitalisation of roughly $55 million and the shares trade at 20 cents, against a 52-week range of 18 cents to 50 cents.

In July, the company announced some significant news.

Archer signed a three-year agreement with IonQ (NASDAQ: IONQ), the Nasdaq-listed quantum hardware business, giving it access to IonQ's cloud platform, its Forte-class systems and its upcoming Tempo-class machines.

Archer pays US$250,000 on signing and US$250,000 every six months, for US$1.5 million across the initial term.

The two companies will also study the feasibility of deploying an IonQ quantum computer inside Australia.

The agreement was funded alongside a $7 million placement and a $3 million share purchase plan.

Chief executive Dr Simon Ruffell was very bullish on the news:

Quantum compute power is no longer a horizon technology, but a strategically critical utility ready for commercial deployment.

The ETF route

The simplest option came to the ASX last month.

VanEck listed Australia's first quantum computing ETF on 6 August, the Vaneck Quantum ETF (ASX: QNTM).

The fund tracks the MarketVector Quantum Computing Ecosystem Index and charges 0.65% a year.

The index targets businesses building quantum hardware, businesses writing quantum software, and the companies supplying components to both.

For most investors, this is the sensible way to own the theme, because it removes the risk of picking the wrong machine individually.

The infrastructure angle

Quantum computers still need somewhere to be housed.

NextDC Ltd (ASX: NXT) is the obvious beneficiary if any sovereign machine is deployed here.

FY26 net revenue rose 16% to $405.0 million with underlying EBITDA of $248.8 million.

Contracted utilisation more than tripled to 740.1 megawatts against built capacity of 288 megawatts.

FY27 revenue guidance is $615 million to $640 million, though capital expenditure guidance of $5.25 billion to $5.75 billion is enormous against a $10.5 billion market capitalisation.

The risks worth naming

Timelines in this field slip constantly.

Archer has been developing its chip for years and still generates no revenue from it.

The IonQ agreement is an access deal rather than a revenue contract, and the feasibility study may conclude nothing.

Similarly, funds like QNTM diversifies the single-company risk without removing the sector risk, since every holding is priced on a future earnings that are highly volatile.

Foolish takeaway

I would treat quantum computing as a small satellite position rather than a core holding.

The ETF is the route I would choose for most portfolios, because it spreads the bet across an entire ecosystem for 0.65%.

Archer is the speculative stock, at 20 cents with eight employees.

NextDC is the least direct and the most commercially proven of the three.

Owning a theme this early means accepting that the payoff may be a decade away, or may never come at all.

The post How to invest in quantum computing on the ASX appeared first on The Motley Fool Australia.

For example, there is no ASX-listed Nvidia Corp (NASDAQ: NVDA)

That does not mean Australian investors are locked out.

How to buy AI shares on the ASX

There are three sensible routes.

You can own the infrastructure that artificial intelligence runs on, you can own a business using the technology to widen its own moat, or you can buy a global fund listed here.

Each carries a different risk, and the mistake most investors make is treating them as interchangeable.

The infrastructure AI shares

NextDC Ltd (ASX: NXT) is the purest local play on computing demand.

The company's FY26 result delivered net revenue of $405.0 million, up 16%, and underlying EBITDA of $248.8 million.

The number that really matters is contracted utilisation, which more than tripled to 740.1 megawatts against built capacity of just 288 megawatts.

Hyperscale and artificial intelligence workloads now account for 95% of contracted megawatts.

FY27 guidance is for revenue of $615 million to $640 million.

The risk is written into the same document.

Capital expenditure guidance for FY27 was between $5.25 billion to $5.75 billion, against a market capitalisation of $10.49 billion.

NextDC shares closed Monday at $13.23 and have fallen 19.66% over twelve months.

Goodman Group (ASX: GMG) is the larger and steadier version of the same theme.

Its FY26 operating profit rose 15.7% to $2,675 million, with operating earnings per security up 10.1% to 129.9 cents.

Data centres are now roughly $15.4 billion of work in progress, or 78% of the total.

The group controls a global power bank of 6.4 gigawatts across 16 cities, with management guiding to 9% operating earnings per security growth in FY27.

The AI shares that use the technology

Pro Medicus Ltd (ASX: PME) is not usually filed under artificial intelligence, but it probably should be.

Its Visage platform is where radiology algorithms have to run, and FY26 revenue grew 28.4% to $261.7 million on an underlying EBIT margin of 74.9%.

The company signed $407 million of new contracts across ten deals and retained 100% of renewals at higher fees.

Forward contracted revenue now stands at $1.34 billion over five years.

The stock's valuation is the primary argument against it.

Pro Medicus trades on a price-to-earnings ratio of 72 at $176.42, and the shares have still fallen 40.99% over the past year.

That fall tells you how brutally the market punishes any wobble in a stock priced this way.

The simplest option of all

Global X Artificial Intelligence ETF (ASX: GXAI) solves the geography problem in a single trade, and is the fastest way to add AI shares exposure to an Australian portfolio.

The ETF tracks the Indxx Artificial Intelligence and Big Data Index across more than 100 companies, with Palantir Technologies Inc (NASDAQ: PLTR), Microsoft Corp (NASDAQ: MSFT) and Oracle Corporation (NYSE: ORCL) among its largest weights.

The ETF's management fee is 0.57% a year, and the fund held roughly $271 million in assets as at 28 August 2026.

Foolish takeaway

I would not build a portfolio out of only one of these shares and ETFs.

NextDC gives you the cleanest exposure and carries the heaviest capital risk.

Goodman offers the same theme inside an ASX 200 business that actually pays a distribution.

Pro Medicus is the highest quality of the three and comfortably the most expensive.

For most investors, a global ETF alongside one or two local names is the best way to own AI shares while limiting downside risk.

The post Want to invest in AI shares? Here's how to do it on the ASX appeared first on The Motley Fool Australia.

So, to narrow things down, let's see what analysts at Morgans are saying about the three popular ASX shares listed below.

Here's how the broker rates these shares:

Boss Energy Ltd (ASX: BOE)

Morgans was disappointed with this uranium producer's guidance for FY 2027, which revealed weaker than expected production and higher than expected costs.

In response to the update, the broker has downgraded Boss Energy shares to a sell rating with a $1.30 price target. It said:

Guidance rest and expectations move lower – FY27 guidance implies a ~15% production downgrade versus consensus even at the top end of the range, while C1 costs and AISC are ~15-18% above market expectations. While FY26 was broadly in line, FY27 guidance is likely to drive a reset in earnings expectations. 

Honeymoon new feasibility study – The updated feasibility study outlines a more achievable development pathway with improved unit economics and lower sustaining capital intensity; however, the 13.8Mlb production profile sits below the ~15.1Mlb assumed by consensus, shifting the debate towards whether improved margins can offset lower volumes. Following material downgrades to our forecasts, we move to a SELL (previously ACCUMULATE) with a reduced-price target of A$1.30ps (previously A$1.40ps).

Magellan Financial Group Ltd (ASX: MFG)

The broker was relatively pleased with Magellan's performance in FY 2026. Although its profits were down year on year, they were above consensus estimates.

And while there are headwinds in FY 2027, Morgans remains positive on its medium term growth outlook. As a result, it has an accumulate rating and $10.25 price target on Magellan's shares. It said:

MFG's group operating profit after tax (A$145m) was down 9% on the pcp (A$159m) and 2% above consensus (A$142m). Guidance was the main factor weighing on the result, with management flagging numerous headwinds for FY27 – which shapes up as a consolidation year – alongside signs of a slowdown in Barrenjoey growth in 2H26 (despite otherwise impressive overall numbers). 

We downgrade our MFG FY27F/FY28F EPS by ~10-20%, reflecting disclosed guidance impacts to earnings and greater conservatism in our Barrenjoey growth forecasts. Our price target falls from A$11.26 to A$10.25. While MFG faces some near-term pressures, we continue to believe the company is well positioned to drive medium-term growth. With >10% upside to our price target, we maintain our ACCUMULATE call.

NextDC Ltd (ASX: NXT)

Finally, this data centre operator impressed with its FY 2026 results and guidance for FY 2027. 

However, Morgans hasn't seen quite enough to recommend it as a buy. So, for now, the broker has moved to a hold rating with a $15.00 price target. It explains:

NXT's FY26 and FY27 outlook were both above expectations. Customer demand remains insatiable and NXT is on a glide path to materially higher EBITDA. We lift our EBITDA forecasts materially on a faster ramp-up of contracted MW. 

We see the value creation from substantial FY26 deals but cannot avoid the investment markets reasonable fixation on the funding envelop. We think, until NXT delivers more steps along the path to a capital recycling program, the stock could lack marginal buyers. We move to a Hold recommendation, for now.

The post Buy, hold, sell: Boss Energy, Magellan, and NextDC shares appeared first on The Motley Fool Australia.