Megaport share price soars 10% as ASX tech shares trump on Thursday

We check what's behind the surge in ASX tech shares on the market today.

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Key points

  • The Megaport share price is soaring 10% higher today 
  • Technology shares are following in the footsteps of their US counterparts 
  • The ASX All Technology Index is up almost 2.5% today 

The Megaport Limited (ASX: MP1) share price is soaring today in what's shaping up as a stellar day for ASX technology shares.

Shares in the global software company are currently trading at $8.14 each, a 10% gain. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 1% higher at the time of writing.

Let's take a look at what is likely impacting the Megaport share price.

Technology shares rise

The Megaport share price is rising more than many stocks today, but it is not alone in the tech sector. The Block Inc (ASX: SQ2) share price is up 4.02%, while Brainchip Holdings Ltd (ASX: BRN) is 5.43% ahead and Pivotal Systems Corporation (ASX: PVS) is surging 20.5%. Life360 Inc (ASX: 360) is also jumping 10.84% while Appen Ltd (ASX: APX) is a more modest 1.07% in the green.

The S&P/ASX All Technology Index (ASX: XTX) is 2.42% ahead today, while the S&P/ASX 200 Information Technology Index (ASX: XIJ) is lifting 2.39%.

ASX technology shares, including Megaport, are rising after the technology-heavy NASDAQ lifted higher in the US overnight.

The Nasdaq Composite Index jumped 2.14%. Investors reacted positively to comments from the US Federal Reserve that may provide a clue on the direction of the Fed's monetary tightening plans.

In comments cited by CNBC, US Fed vice chair Lael Brainard warned there could be "risks associated with overtightening". She said:

At some point in the tightening cycle, the risks will become more two-sided.

The rapidity of the tightening cycle and its global nature, as well as the uncertainty around the pace at which the effects of tighter financial conditions are working their way through aggregate demand, create risks associated with overtightening.

Australian technology shares tend to follow in the footsteps of their US counterparts. Also, Megaport has a significant revenue base in the United States. In the company's latest financial results, Megaport said the US "accounted for 51% of group revenues in June 2022".

Megaport share price snapshot

The Megaport share price has fallen 56% in the year to date and 53% in the past year.

However, in the past week, Megaport shares have risen 12%.

Megaport has a market capitalisation of about $1.3 billion based on its current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd, Block, Inc., Life360, Inc., and MEGAPORT FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended MEGAPORT FPO. 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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