The S&P/ASX 200 Information Technology Index (ASX: XIJ) has had a rough run over the past year, down 27%. Higher interest rates, valuation pullbacks, and softer sentiment towards growth stocks have punished even the ASX's highest-quality businesses.
That sell-off has created opportunities for patient investors willing to look past short-term volatility. Several ASX blue chips now stand out after being heavily sold down, despite continuing to dominate their respective niches.
Across the sector, share prices have retraced to multi-year lows. Momentum indicators point to selling pressure becoming stretched, a setup often seen as conditions begin to stabilise.
Here are 2 ASX blue-chip shares that I am watching closely today.
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WiseTech Global Ltd (ASX: WTC)
WiseTech shares have fallen sharply over the past year, dragging the stock back to levels last seen since October 2023. The sell-off has been driven by a mix of valuation concerns, slower global trade growth, and broader weakness across the tech sector.
From a technical perspective, the sell-off looks overdone. WiseTech has been trading near the lower end of its long-term Bollinger Bands, while momentum indicators have slipped into oversold territory.
Importantly, the underlying business remains strong. WiseTech's CargoWise platform is deeply embedded across global freight forwarding and logistics networks. Switching costs are high, customer retention is strong, and the company continues to expand functionality through targeted acquisitions.
While earnings growth has moderated from its peak, WiseTech still benefits from long-term structural tailwinds tied to global trade digitisation. At current prices, investors are paying far less for that growth potential than they were just 18 months ago.
Xero Ltd (ASX: XRO)
Once a market darling, Xero shares have been dragged lower as investors rotated away from high-multiple software names. The result is a share price sitting near multi-year lows, despite the business continuing to grow revenue and users.
Technically, Xero looks stretched on the downside. The relative strength index (RSI) has dipped into deeply oversold levels, and the share price has spent extended periods hugging the lower Bollinger Band. Historically, these setups mark an attractive entry point for long-term investors.
Fundamentally, Xero's competitive position remains very strong. The company dominates cloud accounting for small businesses in Australia and New Zealand and continues to make progress internationally. Subscription revenue is recurring, margins are improving, and cash generation is strengthening.
While near-term sentiment remains cautious, Xero still has significant scope to grow internationally.
Foolish takeaway
WiseTech and Xero are high-quality blue-chip businesses that have been sold down aggressively, pushing valuations and technical indicators to pessimistic extremes.
For investors with a long-term mindset, these periods of fear can offer compelling opportunities to buy top-tier stocks.
