ASX 200 tech shares fight back after 10 weeks of decline

The 5 biggest ASX 200 tech stocks are down 20% or more since the tech sector's peak in September.

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Key points

  • ASX 200 tech shares led the market rebound last week with a 5.96% gain, despite a 22.5% decline over the previous 10 weeks, driven by AI bubble concerns and domestic factors such as high valuations and bond sell-offs.
  • Key tech companies like WiseTech Global, Xero, and TechnologyOne saw positive movements, with WiseTech notably rising 11.04%, although their share prices remain significantly lower since the tech sector's mid-September high.
  • Concerns over US tech valuations and a potential AI market bubble have contributed to the sell-off, but local influences have been more impactful, suggesting a potential stabilisation of tech share prices moving forward.

ASX 200 tech shares may have finally found their floor after a dramatic 22.5% tumble for the sector over the past 10 weeks.

Technology led the 11 market sectors last week with a 5.96% gain over the five trading days.

The benchmark S&P/ASX 200 Index (ASX: XJO) was also buoyant, rising 2.35% to close at 8,614.1 points on Friday.

Ten of the 11 market sectors finished the week in the green.

Let's review.

ASX tech shares led the market last week

The S&P/ASX 200 Information Technology Index (ASX: XIJ) went into a downward spiral after reaching a new record on 19 September.

The tech index closed at 2,370 points on Friday, representing a 22.5% fall over 10 weeks.

Concerns over US tech stock valuations and whether artificial intelligence (AI) is creating a market bubble explain only part of the story.

Wilsons Advisory equity strategist Greg Burke says domestic factors are mostly to blame for the sell-off in ASX 200 tech shares.

High valuations and a sell-off in Aussie bonds amid virtually no chance of another interest rate cut this year have also played a role.

Here's how the biggest ASX 200 tech companies performed last week, and how much their share prices have fallen since 19 September.

5 biggest tech stocks down 20% (or more) since September

The WiseTech Global Ltd (ASX: WTC) share price ripped 11.04% higher to close at $73.02 on Friday.

The largest tech company on the market has lost almost a quarter of its market capitalisation since the sector's peak on 19 September.

The Xero Ltd (ASX: XRO) share price lifted to $122.25, up 2.54% last week and down 25% since the tech sector's high.

TechnologyOne Ltd (ASX: TNE) shares rose 1.93% last week to $30.10. That represents a 21.5% fall since 19 September.

Nextdc Ltd (ASX: NXT) shares edged 0.44% higher to $13.57 last week, down 24% since the tech sector's peak.

The Life360 Inc (ASX: 360) share price finished the week at $40.43, up 10.74% for the week and down 22% since 19 September.

The Codan Ltd (ASX: CDA) share price rose to $30.85, up 7.53% last week and up 2.93% since the sector's high.

Megaport Ltd (ASX: MP1) shares soared 12.69% to $14.30 last week. The stock has slipped by less than 5% since the peak.

ASX 200 market sector snapshot

Here's how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sectorChange last week
Information Technology (ASX: XIJ)5.96%
Materials (ASX: XMJ)4.98%
Healthcare (ASX: XHJ)4.3%
Industrials (ASX: XNJ)4.23%
Consumer Discretionary (ASX: XDJ)2.27%
Utilities (ASX: XUJ)1.87%
Consumer Staples (ASX: XSJ)1.81%
A-REIT (ASX: XPJ)1.78%
Communications (ASX: XTJ)1.19%
Financials (ASX: XFJ)0.12%
Energy (ASX: XEJ)(0.1%)

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Megaport, Technology One, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Life360, WiseTech Global, and Xero. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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