Top 10 tech stocks on the ASX
As financial markets feel the impact of high inflation, we look at some of the most promising tech stocks listed in Australia.
2022 has seen world economies raise interest rates in response to the inflation caused by low rates and stimulus during the Covid-19 pandemic.
Inflation often drives demand for stocks down as interest rates elsewhere become more attractive. This may cause panicked investors to divest from listed technology companies, subsequently causing a drop in many tech stock prices.
For example, US tech giants listed on the NASDAQ 100 Technology Sector Index, such as Apple, Microsoft and Alphabet, experienced a decline in their value in the first three weeks of the year.
A tech stock refers to any company operating in the technology sector – a space encompassing everything from e-commerce, semiconductors, social media and even cloud computing.
Australia’s tech stocks, like its international peers, also experienced a share price tumble that continued into the beginning of 2022, reaching an eight-month-low on 24 January of this year.
However, tech stocks are known to be resilient and are likely to improve their performance when market sentiment improves as investors acclimatise to the higher inflation and increased interest rates.
Some may see the decline in tech stocks as a chance to buy while the share price is low with the hopes that they appreciate with time. Note that past performance does not guarantee future results. So, if you want to buy these shares, it’s wise to do thorough technical and fundamental analysis, and ensure your position aligns to your investment plan.
1. Block: $57.48 billion
Block is a global fintech company that was launched in 2009 by Twitter co-founder and former CEO Jack Dorsey.
The company has several payment brands that target small businesses and consumers, including Square, Cash App and Australian BNPL platform Afterpay. Other key brands include decentralised finance platform TBD, music streamlining service Tidal and web hosting service Weebly.
In January 2022, the company completed its acquisition of Afterpay for $39 billion, giving it access to 3.6 million active customers in the US, 3.1 million in Australia and New Zealand and 600,000 in the UK.
2. WiseTech Global: $18.85 billion
WiseTech Global is a logistics software company whose flagship product, CargoWise One, serves as a platform for the automation and analysis of supply chain operations.
More than 18,000 logistics organisations in 170 countries make use of WiseTech’s software, including 24 of the top 25 global freight providers and 41 of the world’s top 50 third-party logistics providers.
3. Computershare: $14.55 billion
Melbourne-based Computershare is a share registry business that facilitates the transfer of securities ownership. It was founded in 1978 and is one of the longest-running IT companies in Australia.
In addition to share registry services, Computershare helps businesses with employee equity plans, stakeholder communications, fund services and corporate governance.
4. Xero: $12.63 billion
Software developer Xero provides cloud-based accounting tools to small business owners and bookkeepers. A key selling point of Xero’s products is the automation of the many accounting and bookkeeping tasks that small businesses need to perform regularly.
Xero has integrated them with more than 1,000 third-party apps to improve the functionality of its software. The company says its products currently have more than 3 million subscribers in Australia, New Zealand and the United Kingdom.
5. Altium: $4.7 billion
According to Altium, it is currently the world’s leading provider of printed circuit board (PCB) software after 35 years of research and design work.
75% of the company’s revenues are subscription-based, while its earnings come from diverse regional sources, including the Americas (55%), Europe (31%), emerging markets (10%) and Asia (5%).
6. NEXTDC: $4.5 billion
Data centre company NEXTDC bills itself as a customer-centric provider of digital infrastructure. The company has nine data centres across Australia and offers more than 730 clouds, networks and ICT speciality services in collaboration with its partner ecosystem.
NEXTDC says it provides its services to some of the world’s leading cloud platforms. The tech enterprise recently won the 2022 award for Australia Data Center Services Company of the Year from global business consultancy Frost & Sullivan.
7. Technology One: $3.64 billion
Software-as-a-Service (SaaS) platform Technology One focuses on the financial software needs of businesses and government departments. Key customers include regional governments, universities and museums situated throughout Australia and the UK.
The company claims to be one of Australia’s first tech start-ups and released its debut software product FinanceOne, back in 1991. It operates one of the largest software R&D centres in Australia, with a team of more than 400 developers.
8. Link Group: $2.15 billion
Founded in 2005 in New Zealand, Link Group provides record-keeping technology and information solutions to the global financial sector. The company has operations around the globe in countries including Australia, India, South Africa, the UK and Europe.
Link says it’s the largest provider of services in Australia’s superannuation administration industry, which services the fourth largest pool of pension funds in the world. It also provides its services to the corporate market, fund managers and the banking sector.
9. Iress: $2.13 billion
Fintech company Iress produces software for the financial services sector, covering areas including financial advice, trading and market data, investment management and superannuation.
The company has operations in the Asia-Pacific, United Kingdom, Europe, North America and Africa. According to Iress, over 10,000 businesses and more than 500,000 people are users of its software.
10. Dicker Data: $1.8 billion
Established in 1978, Dicker Data bills itself as a long-standing veteran of the Australian information technology sector with over four decades of experience.
The company is a distributor of hardware, software and cloud services and has an exclusive partner base of more than 6,000 resellers. Dicker’s portfolio of products encompasses a wide variety of Tier 1 global brands, including Cisco, Citrix, Dell Technologies, Hewlett and Packard Enterprise, HP, Lenovo and Microsoft.
Here’s how to buy, sell and trade these promising top 10 tech companies listed on the ASX:
How to buy and invest in tech stocks
With us, traders and investors can buy any of the top 10 tech stocks, using our share trading platform by following four steps:
Open a share trading account or log in
Fund your share trading account
Open the platform on the share trading account, go to the 'finder' panel and type in and search for your preferred tech stock
Click on the deal ticket, where the ‘on exchange’ option will appear. ‘On exchange’ means interacting directly with the relevant exchange
How to trade tech stocks with CFDs
For those who would rather use leverage derivatives like CFDs, you can use our market-leading platform to capitalise on the long (‘buy’) and short (‘sell’) price movements.
Trading tech stocks with CFDs with us can be done in these few steps:
Open a CFD trading account or log in
Look for the tech stock you would like to take a short or long position on
Click ‘sell’ or ‘buy’ in the deal ticket
Choose your position size
Confirm the trade
Features of trading tech stocks with CFDs
Leverage: these derivative products enable investors to get exposure to a relatively large position in a particular asset – with a reduced initial capital outlay. Use of leverage however may prove a doubled-edge sword for those not implementing appropriate risk management strategies because while it maximises potential gains reaped by a trade, it can also magnify losses
Flexibility: this differs from buying an asset outright. CFD trading gives you the flexibility to speculate on the rising or falling price movements of an underlying asset. This means when trading you can easily enter short positions if you believe an asset is overpriced and will decline in value
Hedging: a hedge is an investment or trade designed to mitigate your existing exposure to risk. This potentially offsets one or more other positions you currently have open. You can implement hedging strategies when trading with us
While trading CFDs has its advantages, you should also be aware that trading CFDs carries significant risk, as leverage amplifies any profits or losses. You don’t own or have any interest in the underlying asset. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Please consider the margin trading product disclosure statement (PDS), risk disclosure notice and target market determination before entering into any CFD transaction with us.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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