Zip Co Ltd (ASX: ZIP) shares have delivered explosive growth over the past six months, but the stock has also been marked by volatility. Over the past 52 weeks, the Australian financial technology company's shares have zig-zagged anywhere between $1.08 and $4.93 a piece, and, with a business model closely tied to high credit risk and volatile consumer spending, unpredictability could well continue in 2026.
I think Xero Ltd (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) are much better tech bets for 2026. Here's why.
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Beaten-down tech shares set to boom
Xero shares are 0.02% higher at the time of writing on Wednesday morning, at $121.46 a piece. Over the past month, the shares are down 18.13% and for the year to date, the stock is 27.51% lower.
Meanwhile, WiseTech shares are 0.65% higher at the time of writing, at $69.90 a piece. Over the past month, the stock has climbed 0.5% but for the year to date, it's 43.58% lower.
Xero investors reacted unfavourably to the company's latest FY26 interim results, announced in early November, selling off the stock. Around the same time, WiseTech investors were spooked by news that the company's Sydney headquarters had been searched by the Australian Federal Police and ASIC. The raid was in relation to alleged insider trading by Richard White and several other staff members.
Meanwhile, the ASX 200 tech sector suffered an overall dramatic sell-off later in the month, particularly of high‑valuation and AI‑linked tech names. The entire tech sector suffered from investor concerns about overheated valuations and an AI bubble. But analysts think tech shares have now been oversold.
The good news is that this overselling has created a fantastic opportunity to buy Xero and WiseTech shares while they are still cheap.
Why Xero and WiseTech shares, rather than Zip?
While Zip shares have suffered multiple ups and downs over the past year, I'm concerned the pattern could continue over the next 12 months. But Xero and WiseTech are tech companies that could offer the opposite: stable recurring revenue, global exposure, profitability, and scalable software platforms that don't rely on consumer spending pressure.
Both companies have previously demonstrated resilience and growth through economic cycles. Both are also well-positioned to benefit from increased interest trends like automation and cloud computing.
What do the experts think?
Analysts are very bullish on these two beaten-down tech stocks. They think the latest price drops present a great buying opportunity for investors.
TradingView data shows that 12 out of 15 analysts have a buy or strong buy rating on Xero shares, and a target price of up to $230.60. That's a potential 89.5% upside over the next 12 months, at the time of writing.
It's a similar story for WiseTech shares, but the growth is expected to be even steeper. Out of 18 analysts, 13 have a buy or strong buy rating, with a maximum target price of $177.57. That implies the shares could storm 151.59% higher!
