The start of a new year often prompts investors to reset, reassess, and look ahead to emerging opportunities. As we enter 2026, a combination of stabilizing economic conditions, easing inflation pressures, and accelerating digital transformation could create fertile ground for select ASX stocks.
While short-term market movements remain unpredictable, two Australian shares stand out as particularly intriguing prospects for the year ahead: Light & Wonder Inc and Megaport Ltd. Both companies are poised to capitalize on industry trends and strategic shifts within their respective sectors.
Light & Wonder Inc: A Strategic Transformation
Light & Wonder Inc (ASX: LNW) enters 2026 as a transformed entity, markedly different from its previous incarnation as a traditional lottery company. The business has strategically pivoted to become a focused global gaming and digital entertainment group, operating across land-based gaming machines, online real money gaming, and social casino platforms.
This transformation provides Light & Wonder with exposure to multiple growth avenues within the global gaming industry. A key attraction for investors is the company’s increasing emphasis on recurring and digital revenues, which are bolstered by a strong content portfolio performing well across casinos worldwide. The digital division, in particular, benefits from the structural shift toward online gaming and mobile-first entertainment.
If management continues to execute effectively and digital earnings expand as anticipated, Light & Wonder could be well-positioned for further growth throughout 2026. According to UBS, which has recently issued a buy rating and a $206.00 price target on the company’s shares, there is an implied potential upside of approximately 30% for investors.
“Light & Wonder’s strategic pivot towards digital and recurring revenues positions it uniquely within the gaming industry,” said a UBS analyst.
Megaport Ltd: Riding the Cloud Connectivity Wave
Another ASX stock to watch closely in 2026 is Megaport Ltd (ASX: MP1). The company operates a global software-defined networking platform that enables businesses to instantly connect their infrastructure to leading cloud providers such as Amazon Web Services, Microsoft Azure, and Google Cloud. As enterprises increasingly adopt multi-cloud and hybrid IT strategies, the demand for fast, flexible, and secure connectivity continues to grow.
Despite experiencing share price volatility in recent years, Megaport’s underlying business metrics have improved significantly. The company has concentrated on driving operating leverage, enhancing margins, and moving toward sustained profitability. If cloud adoption trends persist and Megaport achieves its execution goals, 2026 could be a pivotal year for the business.
The recent acquisition of Latitude.sh, a global automated infrastructure platform delivering compute-as-a-service, has expanded Megaport’s total addressable market substantially. This move positions the company to better meet the growing demand for cloud connectivity solutions.
“Megaport’s strategic acquisitions and focus on operational efficiency are key to its potential success in the evolving cloud landscape,” commented an industry expert.
Implications and Future Prospects
The developments at Light & Wonder and Megaport highlight broader trends within their respective industries. Light & Wonder’s shift towards digital and recurring revenue streams aligns with the increasing consumer preference for online gaming and digital entertainment. Meanwhile, Megaport’s focus on cloud connectivity reflects the growing importance of seamless, secure, and scalable IT solutions in an increasingly digital world.
As these companies continue to navigate their strategic paths, investors will be keenly watching for signs of successful execution and market adaptation. The potential for growth in 2026 hinges on their ability to capitalize on industry trends and deliver on their strategic objectives.
Looking ahead, both Light & Wonder and Megaport represent compelling investment opportunities within the ASX landscape, driven by their strategic transformations and alignment with key industry trends. As the year unfolds, their performance will likely serve as a barometer for broader market dynamics and investor sentiment in the gaming and cloud connectivity sectors.
