The start of a new year is often a natural time for investors to reset, reassess, and look ahead to where the next opportunities might emerge. While nobody can predict short-term market movements, a mix of stabilizing economic conditions, easing inflation pressures, and accelerating digital transformation could create fertile ground for select ASX stocks.
With that in mind, here are two Australian shares that look particularly interesting to watch as 2026 gets underway.
Light & Wonder Inc: A New Era in Gaming
Light & Wonder Inc (ASX: LNW) enters 2026 as a very different company compared to the one investors knew just a few years ago. Following its strategic transformation away from traditional lotteries, the business is now a focused global gaming and digital entertainment group. It operates across land-based gaming machines, online real money gaming, and social casino platforms, giving it exposure to multiple growth avenues within the global gaming industry.
A key attraction is the company’s increasing emphasis on recurring and digital revenues. Its content portfolio continues to perform strongly across casinos worldwide, while its digital division benefits from the structural shift toward online gaming and mobile-first entertainment. If management continues to execute well and digital earnings expand as expected, Light & Wonder could be well-positioned for further growth as 2026 unfolds.
UBS is bullish on the company. It recently put a buy rating and $206.00 price target on Light & Wonder’s shares. This implies potential upside of approximately 30% for investors in 2026.
Industry Trends and Strategic Moves
The announcement comes as the global gaming industry experiences significant shifts. The COVID-19 pandemic accelerated the move towards online gaming, and companies like Light & Wonder have capitalized on this trend by expanding their digital offerings. The company’s strategic pivot away from lotteries to focus on gaming and entertainment aligns with broader industry trends favoring digital transformation.
According to industry experts, the gaming sector is expected to continue its growth trajectory, driven by technological advancements and changing consumer preferences. Light & Wonder’s ability to innovate and adapt to these changes will be crucial in maintaining its competitive edge.
Megaport Ltd: Bridging the Cloud Connectivity Gap
Megaport Ltd (ASX: MP1) is another ASX stock worth keeping a close eye on in the year ahead. The company operates a global software-defined networking platform that allows 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, demand for fast, flexible, and secure connectivity continues to grow.
While Megaport has faced share price volatility in recent years, its underlying business metrics have improved markedly. The company has been focused on driving operating leverage, improving margins, and moving toward sustained profitability.
If cloud adoption trends continue and Megaport delivers on its execution goals, 2026 could mark an important turning point for the business. Especially given its recent acquisition of Latitude.sh, which is a global, automated infrastructure platform delivering compute-as-a-service. This has expanded its total addressable market materially.
Challenges and Opportunities Ahead
This development follows a period of strategic realignment for Megaport. The acquisition of Latitude.sh represents a significant opportunity to enhance its service offerings and capture a larger share of the cloud connectivity market. However, the company must navigate challenges such as increasing competition and the need to continuously innovate to meet evolving customer demands.
Industry analysts suggest that Megaport’s focus on providing seamless connectivity solutions positions it well to benefit from the ongoing shift towards digital transformation. As businesses continue to migrate to the cloud, the demand for efficient and reliable networking solutions is expected to rise, offering Megaport a fertile ground for growth.
Looking Ahead: The Investment Landscape in 2026
As 2026 unfolds, investors will be closely watching how these companies execute their strategies and adapt to changing market dynamics. Light & Wonder’s focus on digital revenues and Megaport’s expansion into cloud connectivity highlight the diverse opportunities within the ASX landscape.
According to sources, the move represents a broader trend of companies leveraging technology to drive growth and innovation. As economic conditions stabilize and digital transformation accelerates, the potential for these stocks to deliver strong returns remains promising.
Meanwhile, the broader investment community will continue to monitor macroeconomic factors such as inflation and interest rates, which could impact market sentiment and investment decisions. The ability of companies like Light & Wonder and Megaport to navigate these challenges will be critical in determining their success in the coming year.
Ultimately, the new year presents a fresh slate for investors to explore opportunities and make informed decisions in a rapidly evolving market landscape.
