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 Transformed Gaming Giant
Light & Wonder Inc (ASX: LNW) enters 2026 as a very different company from 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.
Strategic Shifts and Market Position
Light & Wonder’s evolution reflects broader trends within the gaming industry. As traditional gaming companies pivot towards digital platforms, those like Light & Wonder that successfully integrate these elements stand to benefit significantly. This shift is not only about capturing new revenue streams but also about enhancing customer engagement through innovative gaming experiences.
“The company’s strategic pivot towards digital and recurring revenues is a textbook example of adapting to market trends,” said a market analyst from UBS.
Meanwhile, the company’s robust performance in its digital division highlights the growing importance of online and mobile gaming. As more consumers turn to digital platforms for entertainment, companies that can offer seamless, engaging experiences will likely see sustained growth.
Megaport Ltd: Riding the Cloud Wave
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.
Expanding Horizons with Strategic Acquisitions
Megaport’s recent acquisition of Latitude.sh, a global, automated infrastructure platform delivering compute-as-a-service, has expanded its total addressable market materially. This acquisition not only enhances Megaport’s service offerings but also positions it to capitalize on the growing demand for integrated cloud solutions.
“The acquisition of Latitude.sh is a strategic move that significantly broadens Megaport’s market reach and capabilities,” commented a technology sector analyst.
The move represents a calculated effort to strengthen its competitive position in the rapidly evolving cloud services market. As businesses increasingly prioritize agility and scalability, Megaport’s expanded capabilities could prove to be a significant advantage.
Looking Ahead: Opportunities and Challenges
The prospects for both Light & Wonder and Megaport in 2026 are promising, yet not without challenges. For Light & Wonder, the key will be maintaining its growth trajectory in the face of intensifying competition and evolving consumer preferences. For Megaport, the focus will be on executing its strategic initiatives effectively and navigating the complexities of the cloud services market.
As the year progresses, investors will be closely watching these companies for signs of continued innovation and market leadership. In an environment where digital transformation and technological advancements are reshaping industries, companies that can adapt and thrive will likely be the ones to watch.
Ultimately, the success of these ASX stocks will depend on their ability to harness emerging opportunities and address potential challenges head-on. As 2026 unfolds, both Light & Wonder and Megaport have the potential to make significant strides in their respective sectors.
