Those navigating the depths of the investment seas for top ASX shares might be interested in two outperforming names right now.
With ASX tech stocks catching a strong bid after the US election, Xero Ltd (ASX: XRO) and Life360 Inc (ASX: 360) stand out as two names in my mind. They have hard-to-replicate business advantages that differentiate them from the broader tech space.
At the time of writing, Life360 shares are down more than 11% in the past week, while Xero has slipped from last Friday's 52-week high of $172.61.
Both stocks are also capturing broker interest with their fundamentals and economic prospects. Let's take a closer look.
Top ASX shares standout
Xero has been one of the top ASX 200 shares in 2024 based on price returns alone. The stock is up more than 51% this year to date.
The cloud accounting platform also hit an all-time high of $172.94 last week, driven by the combination of earnings growth and a roaring stock market.
Xero's half-year numbers saw investors pile into the stock after it blew it out of the park in operating and net profit growth.
Goldman Sachs highlighted Xero's lower-than-expected operating expenses and strong subscriber growth in key markets like ANZ and the UK as reasons for this.
These factors contributed to a 65% year-on-year rise in payments revenue, something analysts were highly constrictive on.
Consensus eyes 29% earnings growth over the coming two years, according to CommSec. This could see it earn $2.99 per share in FY27, up from $1.21 currently.
Goldman expects "modest margin expansion into FY26" in support of this view. The broker maintains a buy rating on the top ASX share with a $201 price target.
Why Life360 deserves a spot on your radar
Life360 is another ASX tech gem, having nearly doubled in value this year. After nudging all-time highs of $24.19 on November 12, the stock has sold off sharply and is down more than 12% from that mark.
One catalyst for this was CEO Chris Hulls selling a large line of his Life360 stock, equal to about 1.2% of total shares outstanding.
Despite completing further insider share sales earlier this year, Hulls retains a significant stake, reinforcing his confidence in the company's future.
The sales do nothing to impact the fundamental economics of the company either.
Recent partnerships, like those with Uber and Hubble, position Life360 to expand its revenue streams and strengthen its platform strategy in my opinion.
Turning to its most recent numbers, the location technology company reported record growth in Q3 2024, adding 159,000 paying circles—an all-time quarterly high.
Total paying circles now stand at 2.2 million, up 25% year on year, underscored by subscriber additions and the company's international expansion.
Bell Potter recently reiterated its buy rating on Life360 shares, boosting its price target to $26.75 on the top ASX share.
With shares currently at $20.62 apiece, this suggests an upside of nearly 30%. The broker praised Life360's impressive subscriber growth and hefty US$160 million cash balance.
The stock is also rated a buy from consensus, according to CommSec.
Foolish takeout
Xero and Life360 both hold competitive positions in their respective fields, making them potential options for growth-focused investors.
Life360 is up 168% in the past year, whereas Xero has climbed nearly 70%.
