Top 3 High-Risk, High-Reward ASX Stocks to Watch in February 2026

Rowan Ashford

ago 2 hours

For investors seeking higher-risk, high-reward opportunities in the Australian market, February 2026 presents interesting possibilities. The following ASX stocks showcase potential despite their associated risks. Proper diligence is essential before investing.

Top 3 High-Risk, High-Reward ASX Stocks to Watch in February 2026

1. Catapult Sports Ltd (ASX: CAT)

Catapult Sports is a prominent provider of wearable technology and analytics. This company serves elite sports teams worldwide, including Manchester United and the Kansas City Chiefs. Its growth depends on ongoing subscription increase and sensitivity to market valuation.

Current Challenges: The firm must maintain cost efficiency while expanding its user base.
Potential Upside: Increased revenue could lead to significantly improved profit margins.

2. DroneShield Ltd (ASX: DRO)

DroneShield operates in the rapidly growing sector of counter-drone technology. As global security concerns rise, their products are increasingly vital for defense agencies.

Revenue Challenges: The company faces unpredictable revenue streams due to contract timings and government procurement processes.
Market Demand: A persistent increase in the market for unmanned systems suggests significant growth potential if customer orders stabilize.

3. Nanosonics Ltd (ASX: NAN)

Nanosonics is shifting focus towards innovation with its core product, trophon. The recent FDA clearance for trophon3 positions it well for growth in medical device technology.

Innovation Opportunities: The introduction of the trophon2 Plus aims to enhance existing product lines worldwide.
New Markets: The CORIS system’s FDA clearance could lead to significant expansion in flexible endoscope reprocessing.

Investing Insights

These firms, while promising, come with specific risks, including market volatility and execution challenges. For investors with a robust risk appetite and a long-term perspective, integrating Catapult, DroneShield, and Nanosonics into your portfolio could lead to substantial returns. Each company offers a unique path to growth amid uncertainty.

Research thoroughly and ensure these high-risk, high-reward stocks align with your investment goals before committing any capital.