ASX tech shares are on track to be the best-performing market sector of 2024.
The S&P/ASX 200 Information Technology Index (ASX: XIJ) is currently up 57.78% in the year to date. By comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) is up 11.5% (excluding dividends).
ASX tech shares are a long way ahead of other sectors this year. The second-best sector for price growth in 2024 is ASX financial shares, with the S&P/ASX 200 Financials Index (ASX: XFJ) up 33.8%.
So, what's driving ASX tech shares higher in 2024?
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Technology on course to be No. 1 sector of 2024
Of course, a rising Nasdaq Composite Index (NASDAQ: .IXIC) has undoubtedly pulled ASX tech shares higher this year.
Interest rate cuts in the US and Republican Donald Trump's election victory have boosted the NASDAQ this year, and ASX tech shares have followed suit.
US tech stock investors see Trump's policies of lower corporate taxes, import tariffs, and tech sector deregulation as beneficial for their investments.
Interestingly, ASX tech shares are actually outperforming the world's biggest tech index in 2024. The NASDAQ is up 31.4% in the year to date, whereas our growth rate is almost double that.
Here is the year-to-date share price growth of the eight biggest ASX tech shares by market capitalisation:
- WiseTech Global Ltd (ASX: WTC) shares are up 68%
- Xero Ltd (ASX: XRO) shares have lifted 56%
- Nextdc Ltd (ASX: NXT) shares are up 20%
- TechnologyOne Ltd (ASX: TNE) shares are 103% higher
- Life360 Inc (ASX: 360) shares have increased 253%
- Codan Ltd (ASX: CDA) shares are up 90%
- Macquarie Technology Group Ltd (ASX: MAQ) shares have risen 30%
- Nuix Limited (ASX: NXL) shares are up 240%
Which ASX tech shares should you buy for 2025?
Despite significant share price rises in 2024, brokers say some of the top-performing ASX tech stocks of 2024 are still a buy today.
Goldman Sachs is backing cloud accounting software-as-a-service provider Xero for further share price growth in 2025. The broker has a conviction buy rating on Xero with a 12-month price target of $201.
Xero shares are trading at $177.09 on Tuesday, up 1.45%.
Goldman also likes Megaport Ltd (ASX: MP1) shares due to accelerating cloud growth and migration trends. It has a buy rating on the interconnection services provider with a share price target of $10.40.
The Megaport share price is currently $7.71, up 1.18%.
An ASX 300 tech share catching Goldman's eye is Hansen Technologies Limited (ASX: HSN). It has a buy rating on the stock and recently raised its price target to $6.35.
Hansen shares are $5.72 apiece on Tuesday, down 0.17%.
Macquarie has an outperform rating on the biggest ASX tech share, WiseTech, with a 12-month price target of $152.70.
The broker thinks recent share price weakness due to downgraded revenue guidance and the CEO stepping down has created a buying opportunity.
Morgans has an add rating on Wisetech and recently increased its 12-month share price target from $114.20 to $135.30.
The Wisetech share price is $127.75, down 1.38% at the time of writing.
Bell Potter is bullish on Life360 due to its "significant growth potential as it continues to rapidly monetise its customer base". The broker has a buy rating and a $26.75 price target on Life360 shares.
Goldman Sachs also likes this ASX tech share. It has a conviction buy rating and a $25 price target on LIfe360 shares.
The Life360 share price is higher on Tuesday at $26.44, up 3.77%.
