The S&P/ASX 200 Index (ASX: XJO) stayed well in the green for another positive session this Thursday. At the end of the trading day, the ASX 200 barrelled through with a healthy gain of 0.28% under its belt. But the same could not be said of ASX tech shares.
ASX tech shares were by far the worst-performing sector players of the day. At the close of trade, the S&P/ASX 200 Information Technology Index (ASX: XIJ) had lost a horrid 4.8% of its value.
We saw this broad move play out in many individual tech shares as well.
Take Xero Limited (ASX: XRO). It was the worst-performing ASX 200 share on the market today, closing a depressing 13.2% lower at $99.50.
That's as bad as it gets. But we saw some pretty awful moves elsewhere. The Weebit Nano Ltd (ASX: WBT) share price lost 2.27% to close at $4.31 a share. Life360 Inc (ASX: 360) shares were down around 1.8% at the close, while WiseTech Global Ltd (ASX: WTC) lost 2.37%.
So what on earth was going on with the ASX tech space this Thursday?
Why were ASX tech shares punished so severely this Thursday?
Well, it seems most tech shares took their lead from the Xero share price.
Xero's fortunes today were markedly worse than most other tech stocks, as mentioned above. That's because the cloud-based accounting software provider reported its latest earnings covering the half year to 30 September. And investors evidently did not like what they saw.
As we went through earlier, Xero revealed a 21% year-on-year rise in revenues to $800 million, as well as a net profit after tax (NPAT) of $54 million, which was a nice turnaround from the net loss of $16 million over the same period last year.
Subscriber numbers were also up by 13% year-on-year to 3.95 million.
But investors were clearly expecting more. As my Fool colleague Bernd reported:
Expectations were high for the tech stock, following on a year of rocketing share price gains and promises from newly appointed CEO Sukhinder Singh Cassidy to make the company profitable and not pursue growth at any cost.
Tech investors are often a little more jittery than others. So it's not too surprising to see such a savage reaction to a disappointing earnings report from a company that still remains up a whopping 41.1% over 2023 to date (that's even after today's falls).
Perhaps ASX tech stocks will have a better day tomorrow. But we'll have to wait and see what happens.