“The important thing is not to chase the AI market. Buy a business that you rate as higher quality with or without the benefit of AI.”
Richard Hemming, Founder and Head of Investments, Under the Radar Report.
Best AI Stocks to Buy: ASX Artificial Intelligence Shares in 2026
Here’s where UTRR’s analysts see the most compelling ASX AI opportunities right now.
Australia doesn’t have Nvidia. It doesn’t have Palantir. What it does have is the infrastructure that AI actually runs on: the data centres, the networks and the enterprise software platforms being rebuilt around AI.
“The important thing is not to chase the AI market. Buy a business that you rate as higher quality with or without the benefit of AI.”
What Are ASX Artificial Intelligence Stocks?
ASX AI stocks are companies that develop, enable or directly benefit from artificial intelligence on the Australian share market. Unlike the US market, where investors can buy the model makers directly through names like Nvidia, Microsoft and Alphabet, the ASX opportunity is mostly indirect. It sits in infrastructure, software and services rather than in AI model makers themselves.
Australia is home to more than 600 AI companies, but very few of them are pure play AI stocks. The real opportunity lies with companies that supply what AI needs to run: data centre capacity, connectivity and enterprise software. Many of these businesses are growing fast and remain under-researched by the major broking houses.
With the rise of our dependence on cloud computing, some companies now describe themselves as “AI stocks” purely for marketing purposes. Separating genuine AI beneficiaries from hype takes careful research, and that is where UTRR adds value.
For broader context on the sector, see our ASX technology stocks hub.
The Three Types of ASX AI Companies: How to Think About Them
We all use generative AI and cloud computing products and services so how can we build ai into our portfolio? Before looking at individual asx-listed AI stocks, it helps to understand the broad AI sector categories in the AI stack. It starts with the foundation of chip design where Nvidia designs the most advanced chips that power AI. Every pick further down this page is categorised under three types.
Type 1: AI Infrastructure (lowest risk, most direct exposure)
These are the companies physically building and maintaining the hardware: AI data centres that store and process AI workloads, the networks that move the data, and power infrastructure behind it all. On the ASX the big players are NextDC and Goodman Group.
Type 1 Risk: These companies investing heavily in AI with high capital expenditure, reliant on US Big Tech continuing to spend on AI solutions and are interest rate sensitive.
Type 1 Opportunity: This group is essential for AI. There is roughly $650 billion in US AI capex for 2026 has to go somewhere, and a meaningful portion flows into Australian data centres. There is structural growth with AI systems to require more power, space and cooling for hears ahead.
Type 2: AI-Enabled Software (medium risk, growing revenues)
These are established businesses that use AI software and the AI cloud platform and imbed them into their existing platforms to improve their product and grow margins. Think WiseTech Global, TechnologyOne and Xero. The growth of their AI applications adds value to an already-working business model rather than being the product itself.
Type 2 Risk: The costs of integrating AI features into their platform, needs to prove AI drives material earnings growth, not just cost cuts.
Type 2 Opportunity: Leveraging AI can meaningfully increase pricing power and reduce churn for software businesses with sticky customers.
Type 3: Pure-Play AI (highest risk, highest potential)
These are companies whose core product is a custom AI technology, often small caps. BrainChip‘s Akida neuromorphic chip and Appen‘s AI training data business are examples. These are UTRR’s natural territory: under-researched ASX small cap stocks with the potential for significant re-rating if the technology gains commercial traction.
Type 3 Risk: The models are powerful but increasingly commoditised over time. Poor balance sheet that won’t survive the AI transition.
Type 3 Opportunity: Mission critical software, recurring revenue, strong balance sheet.
To uncover the individual stocks to buy or sell download our bonus AI Special Report.
Disrupted or Disrupting?
It’s worth asking a fourth question of any AI stock: is this business being disrupted by AI, or is it disrupting with AI? Some of the best value shows up in businesses getting disrupted rather than the ones doing the disrupting.
Case Study: WiseTech Global
WiseTech Global is a case in point: there is real implementation risk around CargoWise, its freight forwarding software platform, and that risk is largely financial and operational rather than AI risk itself. Like many SaaS companies, WiseTech should be a beneficiary of AI rather than a victim of it, using it to automate documentation and workflows.
The other filter UTRR applies is whether a service is mission critical.
Even where AI processes are used, it will be a long time, if ever, before the human is cut out entirely. Catapult Sport, for example, services professional sports teams, but those teams are unlikely to turn into DIY IT experts. Investing here is about common sense: mission-critical relationships are far harder for AI, or a competitor, to disrupt.
UTRR’s Top AI Stocks to Watch in 2026
The following is a curated shortlist of ways to invest in AI stocks on the ASX. Market cap and share price figures are as at the date noted and will move over time; always check current pricing before making any decision. If you want to invest learn more about our active best 10 stocks.
Access UTRR’s special report “Hunting for Value in the AI Stack” (August 2026) to access our analyst team’s favourite stock exposure to the AI sector. This will help you in selecting AI stocks for your portfolio.
AI Infrastructure Picks
AI stocks: data centres, networks and connectivity
AI-Enabled Software Picks
Companies using AI to build their offer.
Pure-Play and Speculative Picks
Delivering outcomes
This is general information only and does not take into account your objectives, financial situation or needs. It is not a recommendation to buy, sell or hold any security. “Why we like it” commentary above is a summary only; full buy and sell research, risk ratings and price targets are reserved for UTRR members.
UTRR’s 5 Best AI Sector Stocks
Are you investing in stocks and looking for ai research to capitalise from ai demand? Download our bonus AI special report for free now and access our 5 Favourite Australian AI companies where revenue growth is a key to our recommendations.
How to buy stock in ASX AI Shares
- Open a share trading account, such as CommSec, Stake or SelfWealth.
- Search the ASX ticker, for example NXT for NextDC or GMG for Goodman Group.
- Research before buying. Understand whether the company is infrastructure, software or pure-play, and know the risk type that applies.
- Position size appropriately. Pure-play AI stocks carry much higher risk than infrastructure plays, so size positions accordingly.
- Think long term. AI is a multi-decade structural theme, and short-term volatility is likely along the way.
- Consider a blend of some infrastructure exposure (NextDC or Goodman), some software exposure, and a small allocation to speculative pure-play names.
Building your first portfolio? UTRR’s Portfolio Builder course covers how to size and structure positions across different risk types.
Risks
- Valuation risk: ASX AI stocks trade at elevated valuations, and a growth disappointment can cause significant price falls.
- Capex execution risk: NextDC and Goodman are spending billions, and execution matters enormously at this scale.
- Technology disruption: Today’s leader could be disrupted by new model architectures or computing approaches.
- Hype versus reality: many companies claim AI involvement for marketing purposes. Commercial traction is what actually matters.
- US tech spending slowdown: if Meta, Microsoft, Amazon and Alphabet cut capex, ASX data centre operators feel it quickly.
- Interest rate sensitivity: high-capex data centre stocks are rate sensitive, and rate rises can hurt valuations.
- Pure-play binary risk: small cap AI stocks can lose 50 percent or more on a bad result or a failed licensing deal.
FAQs
Questions Answered
There is no single “best” AI stock, as it depends on your risk appetite. Investors seeking lower-risk exposure tend to look at infrastructure names like NextDC and Goodman Group, while those comfortable with higher risk may look further into pure-play names. See the categories above for how UTRR thinks about each type.
Genuine pure-play AI stocks are rare on the ASX. BrainChip is one of the few companies whose core product is an AI technology rather than a business that has added AI to an existing platform.
AI infrastructure stocks, such as data centre and network operators, build and supply what AI needs to run and tend to carry lower risk. Pure-play AI stocks develop the AI technology itself, and they tend to be smaller, higher risk and higher potential.
A handful of smaller, early-stage companies position themselves around AI, though genuine commercial traction at this end of the market is limited. These names sit firmly in the pure-play, high-risk category and require careful research before any investment decision.
NextDC is one of the more direct ways to gain ASX exposure to AI infrastructure demand, given its data centre capacity and its partnership with OpenAI. Like any stock, it carries risk, including high capex and rate sensitivity, so it should be assessed against your own objectives and timeframe.
Want UTRR’s full ASX AI stock research?
Our analysts cover the ASX technology sector, including AI infrastructure, software and speculative pure-play stocks, identifying the opportunities the big brokers miss. Updated monthly.
