The ASX growth share space has been hammered over the past few months, particularly names that have a significant technology element to their business. I decided to take advantage of the cheap prices I was seeing.
AI may well be a problem for a few different business models. But, the effect may take a lot longer to play out, impacts may not be as widespread, and incumbent businesses may be able to utilise AI to their advantage.
Following significant sell-offs of a number of businesses that I'm bullish about, I decided to put $4,000 into the following two names. I'm just as optimistic about their long-term prospects as I was a year ago.
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Siteminder Ltd (ASX: SDR)
This software business provides software for many thousands of hotels around the world, generating tens of billions of dollars of reservations. Siteminder (and Little Hotelier) helps hotels operate more efficiently and generate more revenue.
Siteminder has a goal to increase its organic annual recurring revenue (ARR) by 30% per year in the medium-term. It has introduced a number of additional, profit-boosting modules for hotels which add a lot more data and analysis for clients, even offering tools to allow automatic room price changes throughout the year, depending on the level of demand.
Due to the software nature and operating leverage of its offering, I'm expecting long-term profit margin growth as long as cost growth is contained and its market share continues rising.
When I invested, the ASX growth share was down approximately 50% from 29 October 2025, which I think represents a huge decline for a business growing so quickly.
With profitability and cash flow increasing over time, I think the business has great tailwinds at increasing its underlying value, even if it trades on a lower price/earnings (P/E) ratio (or price to revenue ratio) than it used to. I think it could deliver strong returns over the next three or four years.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is another tech-related business that has been sold off heavily in recent months. It had dropped around 40% since 26 November 2026, making it look a lot cheaper.
Its FY26 half-year result didn't impress the market, despite 20% revenue growth to $376 million. FY26 second half trading to 9 February 2026 showed revenue growth of 20%. Home improvement revenue rose 47% to $30 million, which I think bodes well for future growth in this segment.
I think homewares, furniture and home improvement revenue could all benefit from growing online shopping adoption by Australian (and New Zealand) consumers.
The ASX growth share's total addressable market (TAM) is large, which gives the business a big target to aim at and a significant growth runway. I like how much it's investing in growth activities, customer value and technology. While that may hamper profitability in the short-term, I think it's the better choice for the long-term for its success.
Operating leverage could lead to the business significantly increasing its profit margins in the future, particularly if it can capture a useful market share in New Zealand, where it has just started selling items.
In five years, I think its market share and profit margins could be considerably larger.
