Morningstar analyses Australian investors' top trades of 2025

Returns for Aussie shareholders in 2025 were a mixed bag. The ASX200 returned 6.8% which is slightly above the 3, 5 and 10-year averages. Despite this, we saw the largest divergence in returns between sectors in recent memory. Sectors such as Mining and Industrials saw large inflows, up 36% and 16% respectively for the year across our coverage universe. The All-Ords index for Australian Gold companies (^ASX: XGD) skyrocketed 110% for the year.

The two sectors that struggled were healthcare and technology, seeing returns of -27% and -18% respectively, across our coverage universe. Healthcare was heavily influenced by the CSL (ASX: CSL) selloff. The ASX technology sector saw strong returns until mid-2025, before losing steam in the last quarter. Fears that the AI narrative has overinflated tech valuations was a key reason why investor sentiment shifted.

With 2025 in the books, now is a good opportunity to review the list of top-traded shares by Sharesight investors and assess opportunities in 2026. Interestingly, five out of the 20 top-traded shares are direct holdings in US listed companies. This reflects a broader trend towards greater international exposure, which allows investors to access specific sector or industry opportunities that are limited on the ASX. Let’s take a deeper look at three of the companies on this list and the opportunities that remain for Aussie investors.

Nvidia (NASDAQ: NVDA)

• Fair Value Estimate: $240 (22% discount at 28 January 2026)

• Rating: ★★★★

• Moat: Wide

Nvidia has seen a historic run in its share price, making it one of the best-performing stocks over the past 25 years. Given its trajectory, it is no surprise that Nvidia is the mosttraded stock for Sharesight users last year. The question for investors is what exactly is driving such strong sentiment and will it continue?

Nvidia is an early pioneer in engineering Graphics Processing Units (GPU). While Central Processing Units (CPU) are the ‘brains’ of your laptop or iPhone, GPUs handle thousands of tasks simultaneously which is effective for things such as rendering graphics in video games.

Over time, real use cases for GPUs expanded to include training deep neural networks for Artificial Intelligence. Realising this, Nvidia developed Cuda, a software which allows their customers to accelerate their AI developments on Nvidia’s GPU hardware. This innovation cemented Nvidia as a core beneficiary in the AI revolution and irreplaceable among its customers.

Nvidia exhibits market dominance across its GPU hardware and software products, which is why we allocate Nvidia with a wide moat rating. A wide moat indicates confidence that Nvidia can continue to generate excess returns of invested capital over the next 20 years.

NVDA share price performance 2025 1

Nvidia’s largest customers include the likes of Google (NASDAQ: GOOG), Meta (NASDAQ: META) and Amazon (NASDAQ: AMZN). While these tech giants are attempting to reduce their dependence on Nvidia, high switching costs for Cuda is a key reason for sticky customer relationships. This market dominance also enhances Nvidia’s pricing power. We expect gross margins for FY26 to increase to mid-70% and remain close to these levels for the next 10 years.

While Nvidia has prospered from exponential growth in AI, it is also heavily tied to changes in AI spending. We believe the biggest risk to Nvidia’s share price is reduced spending from its largest customers reducing their spend.

Our Fair Value of $240 suggests NVDA still has room to run in 2026 and beyond. Nvidia is currently a four-star stock, indicating that at its current price it is undervalued. One potential catalyst is the release of a full-stack autonomous driving solution to market in the first quarter of 2026 inside the Mercedes-Benz CLA. With AI becoming increasingly important in autonomous vehicles, Nvidia is uniquely positioned to support existing car makers in physical AI.

However, the key catalyst remains the Data Centre segment, which is the core growth engine for Nvidia. Our analysts forecast Data Centre revenue to reach $310 Billion in calendar 2026.

BHP (ASX: BHP)

• Fair Value Estimate: $44 (13% premium at 28 January)

• Rating: ★★

• Moat: None

It is also no surprise BHP lands on the most-traded list for Sharesight users. BHP owns several of the world’s largest mines including Escondida, the largest copper mine and expansive iron ore operations in the Pilbara region of Western Australia. These are the two core revenue drivers for BHP and its share price is tied to the price of these commodities.

Strength in iron ore prices are supporting the share price as they remain, above USD 100 per metric tonne. Copper prices have also remained elevated. These two factors are strong tailwinds for BHP, and explain why BHP’s share price increased by 14% in 2025.

What goes up can come down and the biggest risk to investors is the cyclical nature of commodity prices. This risk is amplified by waning demand from BHP’s largest customer — China.

Looking ahead, the key catalysts for BHP include forecasted increases in iron ore sales volume and commencing production of the Jansen potash project in Canada midway through 2027. The Jansen project makes up around 6% of our Fair Value estimate, with the copper and iron ore operations remaining the largest contributors to the value of BHP.

While BHP is now trading in overvalued territory, we do see value in BHP as a durable dividend option for income investors. BHP’s average dividend yield over the past five years is 6.10%, well above the current ASX200 average of 3.3%. We forecast BHP’s yield to remain over 5% over the next two years at the current share price. When considering 100% franking, the grossed-up yield is closer to 7.5% for FY26 & FY27.

BHP share price performance 2025

Woolworths (ASX: WOW)

• Fair Value Estimate: $30.50 (fairly priced at 28 January)

• Rating: ★★★

• Moat: Wide

Woolworths is Australia’s largest supermarket operator and a staple portfolio holding for many Aussies. Being one of the largest retailing groups, Woolworths benefits from an enormous scale advantage over its peers.

According to our analyst, in FY25 Woolworths’ Australian food sales represented 12% of all retail sales across Australia. The company’s earnings are defensive in nature as most of the revenue is derived from grocery sales. Its highly visible earnings and appropriate historical dividend payout ratio of 75% has made it very appealing for income investors.

WOW share price performance 2025

The company had a challenging 2025 in terms of share price performance, down 3% for the year (flat when accounting for dividend return). The stock bounced back from a steep market reaction in August, following a slump in net profit.

Despite the weaker earnings result, our analyst remains confident Woolworths will catch up to its competitor Coles in sales growth by FY27. This stems from Woolworths’ wide moat, which allows it to reduce prices and lure back shoppers more effectively than competitors.

The wide moat rating is underpinned by cost advantages and a dominant 36% market share in Australia. Woolworths also has been awarded an exemplary capital allocation rating from our analysts, reflecting its strong balance sheet. This capital allocation flows through to shareholders as dividends.

Morningstar forecasts Woolworths’ dividend yield to reach 3.4% in FY26 and 3.9% in FY27, assuming the share price remains stagnant. The grossed-up yield, which includes the benefits of franking, is 4.9% and 5.5% respectively (100% franking applied).

While there are higher dividend yield options on the ASX, investors should focus on yield durability over the long term. Steady earnings growth and high visibility of future cash flows are green flags income investors are hard pressed finding in today’s ASX dividend environment.

Wrap up

The top trades by Sharesight users are diverse across industry, sector, size and geography. The profiles of these companies vary — from Nvidia as a high growth stock with almost negligible dividends, to BHP which is a commodity business with greater fluctuations in its dividends and share price growth. Lastly, Woolworths is a defensive company with a steady dividend yield and highly visible earnings. Their return profiles are stark.

The composition of the Sharesight top trades has changed over the years. The list, which once consisted largely of Australian ‘blue chip’ shares, now reflects the increasing appetite for international and technology exposure from Australian investors.

It should be noted that Morningstar’s Fair Value Estimate and star ratings give investors an indicator of the intrinsic value of a share, and whether it is over or under valued in relation to this value. What these measures do not represent are an investor’s own investment goals and how these companies fit into your portfolio.

Investor goals may range from capital growth, income investing to capital preservation while maintaining purchasing power. Each investment in your portfolio should serve the purpose that your investment strategy is trying to achieve.

Terms used in this article

• Star Rating: Our one- to five-star ratings are guideposts to a broad audience and individuals must consider their own specific investment goals, risk tolerance, and several other factors. A five-star rating means our analysts think the current market price likely represents an excessively pessimistic outlook and that beyond fair risk-adjusted returns are likely over a long timeframe. A one-star rating means our analysts think the market is pricing in an excessively optimistic outlook, limiting upside potential and leaving the investor exposed to capital loss.
• Fair Value: Morningstar’s Fair Value estimate results from a detailed projection of a company’s future cash flows, resulting from our analysts’ independent primary research. Price To Fair Value measures the current market price against estimated Fair Value. If a company’s stock trades at $100 and our analysts believe it is worth $200, the price to fair value ratio would be 0.5. A Price to Fair Value over 1 suggests the share is overvalued.
• Moat Rating: An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. Companies with a narrow moat are those we believe are more likely than not to sustain excess returns for at least a decade. For wide-moat companies, we have high confidence that excess returns will persist for 10 years and are likely to persist at least 20 years. To learn about finding different sources of moat, read this article by Mark LaMonica.

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This article has been prepared by Morningstar Australasia Pty Ltd (AFSL: 240892). The information is general in nature and does not consider the financial situation of any individual. For more information refer to our Financial Services Guide at www.morningstar.com.au/s/fsg.pdf . You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest.  Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser.

Morningstar’s publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782.