Introduction : Tech Stocks ASX
The IT industry caters to a myriad of services used by organizations to create, manage, and deliver information, and it also accounts for services that are essential in various other business functions. The preliminary objective of IT services is to ensure that information technology infrastructure, applications, and systems are effectively implemented, operated, and optimized to support an organization’s business objectives and requirements.
Technologies play a pivotal role in the information technology industry in Australia. So far, priority is given to the combination of transferable digital knowledge and creative, problem-solving, and communication skills.
As per the Bureau of Statistics on Technology and Innovation, during 2021–22, business expenditure on research and development was $20,642 million, up 14% from 2019–20. Business human resources devoted to research and development totaled 91,414 person years of effort. The professional, scientific, and technical services industry recorded the largest increase in research and development expenditure, up $871 million, or 14%. 38% of total business research and development expenditure was in the field of information and computing sciences.
The Best Tech Stocks on the ASX
The role play of the technology sector on the Australian Securities Exchange is becoming crucial and has grown substantial. Technology is the key for many industries. As a result, numerous ASX-listed tech stocks offer promising opportunities for investors.
Here are some of the best ASX tech stocks to look at, as follows:
Computershare Limited (ASX: CPU) has a market cap of $15.79 billion and a current market price of $26.15 as of September 22. The company is engaged in the operation of investor services, plan services, communication services, business services, stakeholder relationship management services, and technology services. Its segments are Asia; Australia and New Zealand; Canada; Continental Europe; the United Kingdom, Channel Islands, Ireland, and Africa; the United States of America; and Technology and Other. The investor services operations include the provision of registry maintenance and related services. The plan for service operations includes the provision of administration and related services. The communication services operations include scanning and electronic delivery. The business services operations include the provision of bankruptcy and mortgage servicing activities.
Aristocrat Leisure Ltd. (ASX: ALL) has a market cap of $26.39 billion and a current market price of $40.69 as of September 22, 2023. The company is a diversified natural resource company. The company operates through three segments: Illinois Basin, Appalachia, and Minerals. The Illinois Basin segment includes its operating mining complexes. The Appalachia segment includes its operating mining complexes. The Minerals segment includes the company’s oil and gas mineral interests. The company is a producer and marketer of coal, primarily to United States utilities and industrial users. The company owns both mineral and royalty interests in approximately 1.5 million gross acres in oil and gas-producing regions in the United States, primarily the Permian, Anadarko, and Williston Basins. It also develops and markets industrial and mining technology products and services.
Carsales.com Ltd. (ASX: CAR) has a market value of $10.78 billion and a current market price of $25.59 as of September 22, 2023. The company is an Australia-based online automotive, motorcycle, and marine classifieds company. The company provides a marketplace to buy and sell cars, motorcycles, trucks, caravans, and boats. The company operates through four segments: Australia-Online Advertising Services, Australia-Data, Research and Services, Latin America, and Asia. The Online Advertising Services segment provides online automotive classifieds and display advertising services. The Australia-Data segment provides automotive data services, including software, analysis, and research and reporting, valuation services, website development, and hosting and photography services. This segment also includes display and consumer advertising related to these divisions.
Wisetech Global Ltd. (ASX: WTC) has a market cap of $22.25 billion and a current market price of $66.85 as of September 22, 2023. The company provides software solutions to the logistics industry in the Asia Pacific, the Americas, Europe, the Middle East, and Africa. The company develops, sells, and implements software solutions that enable logistics service providers to facilitate the movement and storage of goods and information. It offers CargoWise, which is a software platform for logistics a service provider that enables the execution of complex logistics transactions and the management of operations. In addition, the company provides tariff management software, terminal management logistics solutions, customs, bonded warehouse, and trade compliance solutions; freight forwarding solutions; intermodal trucking, less than truckload, and parcel shipping transportation management solutions; container optimization solutions to the shipping and landside logistics communities; and messaging integration solutions.
Xero Limited (ASX: XRO) has a market cap of $17.37 billion and a current market price of $114.70 as of September 22, 2023. The company offers cloud-based accounting software. Its segments include Australia and New Zealand (ANZ) and international. The features and tools of its software platform include accept payments, asset management, advisor tools, bank connections, bank reconciliation, business performance dashboard, contacts and smartlists, dashboard, data capture, expenses, files, GST returns, inventory, invoicing, multi-currency accounting, pay bills, payroll, project management, purchase orders, projects, quotes, reporting, and search. It also offers its Xero mobile application. The features of its mobile application include managing invoices, bank reconciliation, managing contracts, monitoring spending, and reporting on the go.
Investing in Tech Stocks
Technology has been considered one of ASX's most heavily weighted sectors and contributes substantial revenue to the Australian economy. Technology stocks have performed well in the past and have demonstrated strong performance, capturing the attention of investors seeking growth opportunities and long-term capital appreciation. The technological advancements changed the global markets, the massive transition in industry through the digital transformation of various industries, Consequently, demand has gradually skyrocketed, and momentum is expected to intensify further for innovative solutions and services provided by tech companies, which in turn has propelled the sector's growth.
Investors have taken advantage of the notable returns that have been generated on their investments, which further develops sector optimism for tech stocks on the ASX. This positive performance in the past decade has not only created a positive outlook on the potential of the technology sector but has also boosted the role of technology in business.
Post-2022, the tech sector experienced a correction in the wake of inflationary measures taken through a rising interest rate. The long-term performance of technology stocks on the Australian Securities Exchange demonstrates their adaptability, innovation, and ability to seize new opportunities.
Frequently Asked Questions F.A.Q
What is the FAANG equivalent in Australia?
The WAAAX stocks are the equivalent version of FAANG in Australia. Such stocks are: Wisetech Global Ltd (ASX: WTC), Appen Ltd (ASX: APX), Altium Ltd (ASX: ALU), and Xero Ltd (ASX: XRO)
Why invest in tech stocks?
The global markets are getting well equipped with technological integration, gradually increasing the massive transition in industry through the digital transformation of several industries. As a result, demand has been on the rise, and momentum is expected to continue going further for innovative solutions and services provided by tech product and service companies.
What are the best ASX tech stocks?
Here are the best ASX tech stocks to look at:
• Computershare Limited (ASX: CPU)
• Xero Limited (ASX: XRO)
• Wisetech Global Ltd. (ASX: WTC)
• Aristocrat Leisure Ltd. (ASX: ALL)
What is the ASX 200 information technology sector?
The S&P/ASX 200 information technology (XIJ) consists of 14 companies in the S&P/ASX200 that are categorized as members of the GICS information technology sector.
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