3 ASX Shares Likely to Perform in 2026

Global markets are increasingly focused on defence self-reliance, AI-led productivity and energy transition demand. IperionX Limited, Xero Limited and South32 Limited are aligning strongly with these structural themes supported by solid execution, financial strength and the clear long term growth pathways.

IperionX Limited (ASX: IPX)

IperionX Limited (ASX: IPX) continues to strengthen its position as the strategic U.S. titanium producer with a market cap of approximately $2.04B. 

During the December 2025 quarter, the company secured $0.3 million purchase order from American Rheinmetall for 700 titanium components for U.S. Army combat systems highlighting the growing defense traction.

The company successfully commissioned its Titanium Manufacturing Campus in Virginia and is scaling capacity toward 1,400 tons per annum backed by $47.1 million in obligated U.S. Government funding. With $65.8 million in cash at quarter end the company remains well funded to execute its growth roadmap.

Strong government support, expanding commercial orders and the clear path to large scale production position IperionX as a key player in securing America’s critical titanium supply chain.

Xero Limited (ASX: XRO)

Xero Limited (ASX: XRO) continues to strengthen its position as a global small business platform leveraging AI and payments to unlock long-term growth. 

At its February 2026 investor briefing the management highlighted strong adoption of AI features with over 2 million subscribers benefiting and clear customer productivity gains.The integration of Melio is accelerating US expansion with pro forma US revenue rising to$355 million in FY25, up 38% year on year.

With a current market capitalisation of approximately $14.27 billion, Xero is well positioned to capitalise on the expanding SaaS + AI opportunity and growing US payments TAM. 

The company’s focus on AI monetisation, improving unit economics and targeting Rule of 40 outcomes by FY28 reflects strong strategic clarity and long-term value creation potential.

South32 Limited (ASX: S32)

South32 Limited (ASX: S32) delivered the strong H1 FY26 performance reflecting disciplined operations and rising base metal prices. 

The underlying EBITDA grew 9% to $1.1B while profit after tax attributable to members increased 29% to $464M.

The company maintained FY26 production guidance across its operated assets and strengthened shareholder returns with fully franked interim dividend of US 3.9 cents per share 

Growth momentum remains solid with continued investment in the Hermosa project and strong cash distributions from Sierra Gorda. 

With a market cap of approximately $20.90 billion, South32 is well positioned to benefit from the copper, silver and aluminium demand linked to the energy transition. 

The outlook remains constructive supported by the robust balance sheet and disciplined capital management.

(Source: Company Announcements)