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The WiseTech Global Ltd share price just lost 6% as ASX tech shares retreat

Australian technology shares fell across the board today after sharp falls in the mega-cap U.S. tech businesses overnight, with the likes of Netflix, Amazon and Facebook all falling between 2%-7%.

Australian investors have followed their lead by sending shipping logistics software-as-a-service business WiseTech Global Ltd (ASX: WTC) 6% lower, while language translation business Appen Ltd (ASX: APX) is down 6.2% and market darling Afterpay Touch Group Ltd (ASX: APT) is down 5%.

Elsewhere software business Altium Limited (ASX: ALU) lost 6%, with Nextdc Ltd (ASXL NXT) down 4.6% and internet business Trade Me Group Ltd (ASX: TME) giving up 6.6% on no news.

The wild price swings show how sentiment can drive share prices higher or lower over the short term, which can provide a buying opportunity for patient investors. Even over a relatively short period of 6-12 months though revenues and profits will determine the direction of a company’s valuation.

Some of the above mentioned stocks like WiseTech are trading on unprecedented multiples of sales and as such investors should remember returns are always a function of price paid no matter the underlying quality of a business.

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Motley Fool contributor Tom Richardson owns shares of Altium, Amazon and Facebook. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, Appen Ltd, and WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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