It is now down 18.59% year to date (YTD) and nearly 30% in the past 12 months. <\/p>\n
Notable ASX technology shares that have been heavily sold off include: <\/p>\n
- \n
- WiseTech Global Ltd<\/strong> (ASX: WTC<\/a>) down almost 26% YTD<\/li>\n
- Life360 Inc<\/strong> (ASX: 360<\/a>) down 37% YTD<\/li>\n
- Megaport Ltd <\/strong>(ASX: MP1<\/a>) down nearly 36% YTD. <\/li>\n<\/ul>\n
\n Image source: Getty Images<\/p>\n<\/figcaption><\/figure>\n
Is the AI replacement fear real?<\/h2>\n
Much of this Australian tech sell-off has been driven by a growing fear<\/a> that companies could have their core services replaced by AI.<\/a> <\/p>\n
Many Software as a Service (SAAS) companies earn a profit through subscriptions, paid services etc. <\/p>\n
Should consumers be able to access similar, or even better services with more efficient AI tools, it would likely impact the earnings of these companies. <\/p>\n
The challenge investors face in the short-term is identifying which companies are realistically going to be impacted, and which are going to adapt. <\/p>\n
An important consideration is that some companies could be set to benefit exponentially from AI integration. <\/p>\n
A new report from Vanguard<\/a> provided an in-depth analysis of how this could play out in the long-term. <\/p>\n
So while some AI technology shares might be seriously challenged, others are at an all-time value due to misplaced fear.<\/p>\n
Aussie tech vs US tech<\/h2>\n
A key distinction that investors need to understand is the difference between ASX technology industry and global tech. <\/p>\n
Largely, the ASX is underweight towards technology shares. <\/p>\n
Instead, it is dominated by traditional sectors such as mining<\/a>, energy<\/a>, and financials<\/a>. Together, these make up the bulk of its market capitalisation. <\/p>\n
Additionally, the tech sector here in Australia is heavily skewed toward software-as-a-service (SaaS) companies. <\/p>\n
Many of these firms are cloud software providers, focusing on recurring subscription-based business models rather than hardware or consumer electronics. <\/p>\n
This contrasts sharply with the tech composition of the S&P 500, which is dominated by large-cap, diversified technology giants such as Apple Inc<\/strong> (NASDAQ: AAPL<\/a>) and Nvidia Corp <\/strong>(NASDAQ: NVDA<\/a>). <\/p>\n
How to target these companies<\/h2>\n
If you are bullish on an Australian tech revival, you can scoop up companies trading at relative lows like WiseTech, Life360 or Megaport. <\/p>\n
Price targets via TradingView indicate these stocks are now oversold. 12 month price targets suggest upsides between 70% and 97%. <\/p>\n
However another option is to invest in an ASX ETF like Betashares S&P ASX Australian Technology ETF<\/strong> (ASX: ATEC<\/a>). <\/p>\n
It provides exposure to just under 50 ASX shares in the sector. <\/p>\n
The fund is down 18% year to date, providing a relative value for those expecting Australian tech stocks to recover. <\/p>\n
Alternatively, if investors are looking to avoid ASX technology stocks, and buy the dip on global tech shares, two funds to consider are: <\/p>\n
- \n
- Global X Morningstar Global Technology ETF<\/strong> (ASX: TECH<\/a>) \u2013 invests in companies positioned to benefit from the increased adoption of technology, including Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), and\/or cloud and edge computing infrastructure and hardware.<\/li>\n
- Global X FANG+ ETF<\/strong> (ASX: FANG<\/a>) \u2013 Includes just 10 companies at the leading edge of next-generation technology targeted for global tech\/growth potential.<\/li>\n<\/ul>\n
<\/a><\/strong> <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"
… ASX technology<\/span> industry and global tech<\/span>.\u00c2\u00a0 Largely, the ASX is underweight towards technology<\/span> shares … Global X Morningstar Global Technology<\/span> ETF (ASX: TECH<\/span>) \u00e2\u0080\u0093 invests in companies positioned … of next-generation technology<\/span> targeted for global tech<\/span>/growth …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-118661","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/118661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/comments?post=118661"}],"version-history":[{"count":0,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/118661\/revisions"}],"wp:attachment":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/media?parent=118661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/categories?post=118661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/tags?post=118661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- Global X FANG+ ETF<\/strong> (ASX: FANG<\/a>) \u2013 Includes just 10 companies at the leading edge of next-generation technology targeted for global tech\/growth potential.<\/li>\n<\/ul>\n
- Life360 Inc<\/strong> (ASX: 360<\/a>) down 37% YTD<\/li>\n