Is Government-Led Critical Minerals Investment Altering the Investment Case for ASX (ASX:ASX)?

• Earlier this week, Australia and the US signed a rare earth and critical minerals deal, each committing US$1 billion to new projects, while Astron's Donald project gained major project status from the Australian government and VHM secured financing support from both Australian and US export agencies. This triggered renewed attention on ASX-listed lithium and critical minerals stocks as industry participants and investors react to signs of sector recovery and government support.
• Investor optimism around accelerated government investment and commodity price improvement highlights the growing importance of policy-driven catalysts for the ASX's resource and exchange sectors.
• We'll examine how government-backed investment in critical minerals may influence ASX's growth outlook and earnings resilience.

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ASX Investment Narrative Recap

For shareholders in ASX Limited, confidence in the company's ability to capture growth from Australia's expanding capital markets and ongoing technology upgrades is central to the investment case. While the Australia-US critical minerals deal may generate short-term momentum across listed resource stocks, its immediate impact on ASX's main earnings catalysts, technology modernization and listings growth, appears limited; however, it could support trading activity volumes, mitigating near-term competitive risk from rival exchanges.

One recent development that stands out is ASIC's compliance assessment of ASX's market licensees and clearing and settlement licensees, announced in June 2025. This regulatory review remains highly relevant as ASX navigates rising compliance costs and tightening oversight, directly affecting its expense outlook and operational execution, key issues for shareholders focused on resilience and profitability.

Yet, with competition from Cboe Australia intensifying, investors should not overlook...

Read the full narrative on ASX (it's free!)

ASX's outlook projects A$1.3 billion in revenue and A$547.2 million in earnings by 2028. This requires 4.9% annual revenue growth and a A$44.6 million increase in earnings from the current A$502.6 million.

Uncover how ASX's forecasts yield a A$66.51 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Five Simply Wall St Community fair value estimates for ASX range from A$14.48 up to A$1,398.50, highlighting widely varied investor expectations. While this illustrates strong differences in outlook, regulatory scrutiny and cost pressures remain front of mind as you compare these viewpoints.

Explore 5 other fair value estimates on ASX - why the stock might be a potential multi-bagger!

Build Your Own ASX Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your ASX research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free ASX research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ASX's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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