It's been a painful year for investors in leading ASX tech stocks WiseTech Global Ltd (ASX: WTC) and Xero Ltd (ASX: XRO).
Both ASX tech stocks have fallen around 50% over the past 12 months and are down well over 30% so far in 2026. That's a sharp contrast to the broader market, with the S&P/ASX 200 Index (ASX: XJO) down just 3% year to date.
Despite the heavy sell-off, broker sentiment remains strikingly bullish. In fact, many analysts see upside of 90% or more for the two ASX tech stocks.
So, are these beaten-down tech leaders on the verge of staging a massive comeback?
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WiseTech Global: Global scale, but execution concerns
WiseTech Global has built a dominant position in logistics software through its CargoWise platform, which is used by many of the world's largest freight forwarders.
The company's strength lies in its global reach, high-margin recurring revenue, and mission-critical software. Once embedded, its platform is difficult for customers to replace, creating strong pricing power and long-term growth potential.
Recent earnings have continued to show solid revenue growth, supported by customer wins and product expansion. Management has also maintained a positive outlook, with expectations of continued growth as global trade digitisation accelerates.
However, the ASX tech stock hasn't been immune to pressure. Concerns around valuation, growth sustainability, and execution have weighed on sentiment. Any slowdown in customer growth or margin expansion could see further volatility.
Even so, analysts remain highly optimistic. WiseTech has an average price target of $84.93, implying upside of around 99% from current levels. That suggests the market may be underestimating the long-term growth potential of the $14 billion ASX tech stock.
Xero: Profitable growth back in focus
Xero, a leader in cloud accounting software for small and medium businesses, has also seen its share price halve over the past year.
The company's core strength is its sticky subscription model, with millions of subscribers globally and strong retention rates. As more businesses shift to cloud-based accounting, Xero remains well placed to capture long-term growth.
In its latest results, Xero reported solid subscriber growth and improving profitability, reflecting a stronger focus on cost discipline. The company has also guided for continued margin expansion, signalling a shift towards more sustainable earnings growth.
That said, risks remain. The ASX tech stock is exposed to economic conditions, particularly the health of small businesses. Slower customer growth or increased competition could impact its trajectory.
Nevertheless, broker confidence remains high. Xero carries an average price target of $150.99, pointing to potential upside of around 95%.
Foolish Takeaway
WiseTech and Xero have both been hit hard, but their underlying businesses remain strong.
With high-quality software platforms, recurring revenue models, and large global markets, both companies still have significant long-term growth potential. The key question is whether they can deliver on expectations and rebuild investor confidence.
If they do, the current share price weakness could mark the setup for a powerful rebound — and potentially the kind of comeback long-term investors look for.
