These ASX 200 tech shares are leading the market today

Why are ASX 200 tech shares on fire this Friday?

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published January 27, 2023 2:18 pm AEDT

It's been a fairly pleasant day of trading for the S&P/ASX 200 Index (ASX: XJO ) so far this Friday. At the time of writing, the ASX 200 has added a decent 0.45%, putting the index at bang on 7,500 points. But ASX 200 tech shares are having an even better day.

Tech shares are on fire this Friday. At present, the S&P/ASX 200 Information Technology Index (ASX: XIJ) is the best-performing sector on the market, up by an impressive 1.47% at present.

Tech shares are amongst the ASX 200's best individual share performers too. Just take the market-leading Megaport Ltd (ASX: MP1) share price right now. It's in the ASX 200's vanguard at present, recording a gain of 5.63% to $7.32 a share:

WiseTech Global Ltd (ASX: WTC) shares are also standout performers. This WAAAX veteran is up a pleasing 4.37% at $58.55 a share right now.

TechnologyOne Ltd (ASX: TNE) shares have gained more than 3.5%, while the share prices of NEXTDC Ltd (ASX: NXT), Xero Limited (ASX: XRO) and Block Inc (ASX: SQ2) are all beating the market, having recorded gains over 1% at present.

So what's going on with ASX 200 tech shares today that has this sector leading the entire market?

Happy man and woman looking at the share price on a tablet. — Image source: Getty Images

Why are ASX tech shares on fire this Friday?

Well, it could be down to a couple of factors.

Firstly, US tech shares had a very impressive session overnight (our time). The tech-heavy NASDAQ 100 Index closed a healthy 2% higher at back over 12,000 points last night.

This was driven by healthy moves like Amazon.com Inc (NASDAQ: AMZN) shares lifting by 2%, Alphabet Inc (NASDAQ: GOOGL) rising 2.42%, and Facebook and Instagram owner Meta Platforms Inc (NASDAQ: META) rocketing by 4.1%.

But Tesla Inc (NASDAQ: TSLA) stole the show, surging by a whopping 10.97% to US$160.27 after reporting some impressive quarterly earnings numbers:

So with all of these US tech shares enjoying such a stellar run last night, ASX tech shares were always going to be primed for a strong showing.

But secondly, some ASX news might be at play here as well. As my Fool colleague James covered this morning, ASX broker Morgans has upgraded its rating on Megaport shares. The broker now rates Megaport as an add, with a 12-month share price target of $9 – still well above the $7.38 it is asking at present.

But not only that, Morgans also stated that it has become increasingly bullish on most quality ASX tech shares:

Valuations for quality tech are now back to 20 year / long run averages (fair value)… Quality tech can grow regardless of weak economic conditions. Profit growth should reignite interest in the tech sector once again and this profit growth should drive share price appreciation.

So it could be a combination of these factors that is lifting ASX 200 tech shares so convincingly this Friday.

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