{"id":91784,"date":"2026-02-17T05:31:33","date_gmt":"2026-02-17T08:31:33","guid":{"rendered":"https:\/\/tech.einnews.com\/article\/892999173"},"modified":"2026-02-17T05:31:33","modified_gmt":"2026-02-17T08:31:33","slug":"why-are-asx-200-tech-shares-down-43-in-six-months","status":"publish","type":"post","link":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/2026\/02\/17\/why-are-asx-200-tech-shares-down-43-in-six-months\/","title":{"rendered":"Why are ASX 200 tech shares down 43% in six months?"},"content":{"rendered":"
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ASX 200 tech shares<\/a> are trailing the market on Tuesday, down 0.72% while the S&P\/ASX 200 Index <\/strong>(ASX: XJO) is up 0.3%. <\/p>\n

We’re in the midst of a significant tech sector downturn. <\/p>\n

The S&P\/ASX 200 Information Technology Index<\/strong> (ASX: XIJ) is down 43% over the past six months.<\/p>\n

US tech stocks are still travelling well; however, some big players have seen dramatic share price falls in the new year.<\/p>\n

The NASDAQ-100 Index<\/strong> (NASDAQ: NDX) is up 4% over the past six months, but down 2% in the year to date (YTD).<\/p>\n

Let’s dig deeper. <\/p>\n

What’s driving ASX 200 tech shares down? <\/h2>\n

The chief concern among tech investors worldwide centres around how the artificial intelligence (AI)<\/a> revolution will play out. <\/p>\n

Firstly, there’s concern about US tech stock valuations after strong earnings growth pushed them higher in 2025.<\/p>\n

Luke Yeaman, Chief Economist at Commonwealth Bank of Australia, said<\/a>: <\/p>\n

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2025 marked the transition from AI expectation to AI impact, helping the global economy shrug off the tariff hit. <\/p>\n<\/blockquote>\n

But have investors put too much money into US tech stocks and created a bubble that is yet to burst?<\/p>\n

The Mag Seven stocks all gained value in 2025<\/a>, but all of them have fallen in the new year to date (YTD). <\/p>\n

The worst performers are Microsoft Corp<\/strong> (NASDAQ: MSFT<\/a>), down 17%, and Amazon.com Inc <\/strong>(NASDAQ: AMZN<\/a>), down 14%.<\/p>\n

Global X Fang+ ETF <\/strong>(ASX: FANG<\/a>), which incorporates the Mag 7 plus three others, paints the group picture for us: it’s down 16% YTD.<\/p>\n

Yeaman says: <\/p>\n

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Fears of an “AI bubble” are not irrational \u2014 equity valuations are stretched, market concentration is historically high, and expectations for monetisation are demanding. <\/p>\n

However, today’s AI-leaders are highly profitable, debt-light and have clear monetisation pathways, unlike their dot-com equivalents. <\/p>\n

We expect gains to continue, punctuated by periodic technical corrections to valuations, rather than a major ‘bust’ or GFC style crisis.<\/p>\n<\/blockquote>\n

Capex gone crazy?<\/h2>\n

Investors are also concerned about whether massive investment in AI will actually lead to stronger shareholder returns. <\/p>\n

Analysis by CBA<\/a> shows US ‘hyperscalers’ will spend more than US$500 billion per year from this year on AI infrastructure and chips.<\/p>\n

In its Global Market Outlook for 2026, State Street Investment says<\/a>:<\/p>\n

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\u2026 the US remains the epicenter of the AI trade with Magnificent 7 share price gains fueled by AI spending expectations.<\/p>\n

Capital spending by this cohort is expected to grow to about $520 billion in 2026, or over 30% year-on-year.<\/p>\n<\/blockquote>\n

SaaS on the way out? <\/h2>\n

The third concern plaguing ASX 200 tech shares is whether AI will replace, or degrade the value, of software-as-a-service companies. <\/p>\n

If agentic AI and generative tools, like Anthropic’s Claude and OpenAI’s Codex, can custom-write software, why would companies buy proprietary SaaS products? <\/p>\n

Portfolio manager Ron Shamgar from Australian fund manager, Tamim, explains it:<\/p>\n

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The core fear: AI agents could replace human workflows, eroding seat-based\/per-user pricing models that underpin SaaS giants. <\/p>\n

One AI agent might handle tasks previously requiring multiple licensed users, enabling in-house builds or cheaper alternatives. <\/p>\n<\/blockquote>\n

The big SaaS companies listed in the US include Salesforce<\/strong>, Adobe<\/strong>, Intuit<\/strong>, and ServiceNow<\/strong>.<\/p>\n

Check out what’s happened to their share prices over the past six months. <\/p>\n

Locally, the biggest ASX 200 tech share in the SaaS space is logistics management platform provider, WiseTech Global Ltd<\/strong> (ASX: WTC<\/a>).<\/p>\n

There’s also accounting services provider Xero Ltd <\/strong>(ASX: XRO<\/a>) and enterprise resource planning provider TechnologyOne Ltd <\/strong>(ASX: TNE<\/a>).<\/p>\n

We also have family location app provider Life360 Inc <\/strong>(ASX: 360<\/a>) and hotel bookings management platform, Siteminder Ltd <\/strong>(ASX: SDR<\/a>). <\/p>\n

Look what has happened to these ASX 200 tech shares over the past six months. <\/p>\n

In a recent article,<\/a> Shamgar calls the market’s fear over SaaS models the ‘Ozempic moment for Saas’.<\/p>\n

He’s referring to the valuation plummet for sleep apnea device maker Resmed CDI<\/strong> (ASX: RMD<\/a>) in 2023.<\/p>\n

The Resmed share price crumbled because investors feared the impact of GLP-1 medicines for obesity, like Ozempic and Mounjaro. <\/p>\n

\n

The market reaction was brutal. <\/p>\n

ResMed’s shares plunged roughly 30-40% in the second half of 2023 (from highs around $33-34 AUD to lows near $21), with some periods seeing over 25% drops tied directly to GLP-1 headlines.<\/p>\n<\/blockquote>\n

As it turns out, investors overreacted. <\/p>\n

\n

The initial panic proved exaggerated; the disruption was real but incremental and slower than feared, with adaptation (e.g., hybrid treatments) preserving demand.<\/p>\n<\/blockquote>\n

Other factors contributing to rotation out of tech <\/h2>\n

Other factors impacting ASX 200 tech shares include the interest rate<\/a> hike in Australia this month and expectations of another to come. <\/p>\n

There’s also been US President Donald Trump’s surprising choice for the next Fed Chair, Kevin Warsh.<\/p>\n

The market considered Warsh the more hawkish choice, in contrast with Trump’s preference for lower rates. <\/p>\n

Higher interest rates tend to weigh on tech shares because they reduce the present value of future earnings. <\/p>\n

They also increase borrowing costs, making growth and expansion more expensive for tech companies to fund.<\/p>\n

On top of that, we have a global debasement trade underway. <\/p>\n

Investors have become much more interested in hard assets, like metals<\/a>, as the US dollar has weakened.<\/p>\n

This has created boom conditions for mining shares and commodities, distracting attention away from tech companies. <\/p>\n

ASX 200 mining stocks returned a staggering 36%<\/a> last year, with most of that accumulating in the second half. <\/p>\n

<\/a><\/strong> <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

… tech<\/span> sector downturn. The\u00c2\u00a0S&P/ASX 200 Information Technology<\/span> … The chief concern among tech<\/span> investors worldwide centres around how … to rotation out of tech<\/span> Other factors impacting ASX … , distracting attention away from tech<\/span> companies. ASX 200 mining …<\/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-91784","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\/91784","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=91784"}],"version-history":[{"count":0,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/91784\/revisions"}],"wp:attachment":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/media?parent=91784"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/categories?post=91784"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/tags?post=91784"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}