The Xero Limited (ASX: XRO) share price has started the week in the red.
In morning trade, the cloud accounting platform provider's shares are down 3% to $84.06.
Why is the Xero share price falling?
Investors have been selling Xero shares today amid broad weakness in the technology sector following the collapse of Silicon Valley Bank (SVB) on Friday.
This has led to the S&P/ASX All Technology Index falling 2.5% this morning.
As SVB has a strong presence in the sector, investors appear concerned what ramifications this will have on this area of the economy.
Xero's exposure
The good news is that Xero's exposure to the collapse of SVB is minimal.
This morning, the company attempted to ease investor nerves by revealing that "it does not have a material exposure" to the collapsed bank.
It highlights the following:
As at 10 March 2023 Xero's total exposure to SVB was approximately $5m USD, reflecting Xero's local transactional banking relationships with SVB in the US and UK. That amount represents less than 1% of Xero's Cash and Cash equivalents as at September 30 2022.
Is this a buying opportunity?
According to a note out of Morgans on Friday, its analysts are recommending that investors snap up Xero shares.
In response to its cost cutting plans, the broker has retained its add rating with an increased price target of $97.00. Based on the current Xero share price, this implies potential upside of over 15% for investors.
Morgans commented:
The focus has moved to reducing costs and driving disciplined growth. This means XRO now trades closer to a Growth At a Reasonable Price (GARP), where previously it was Growth At Any Price (GAAP). This realignment of investment priorities should open XRO to a much broader range of potential investors.
