Megaport Ltd (ASX: MP1) shares are once again testing investor conviction.
The ASX tech stock has been one of the market's biggest de-ratings in 2026, with Thursday's sell-off dragging the shares back to levels last seen in January 2025.
In afternoon trade, the Megaport share price is down 7.40% to $6.88 after touching a fresh 52-week low of $6.80 earlier in the session.
That leaves the stock down around 43% year to date, despite the company continuing to deliver double-digit revenue growth and improving EBITDA margins.
The disconnect shows investors are paying more attention to valuation and earnings momentum than revenue growth alone.
With the previous $7 support level now giving way, the chart is starting to reflect a broader reset in how investors are pricing tech businesses.
The key question now is whether the sell-off is nearing exhaustion or if weak momentum still has further to run.
Image source: Getty Images
Momentum remains negative
From a technical view, the chart still points to ongoing selling pressure.
Megaport shares have been making a clear pattern of lower highs and lower lows since peaking above $17 late last year. The latest move to $6.80 only reinforces that downtrend.
The relative strength index (RSI) has slipped to around 38. While that is not yet deeply oversold, it still suggests buying interest remains weak.
The MACD also remains negative, with the shorter-term trend line continuing to sit below the longer-term signal line.
A decisive break below the $6.80 low could leave the next support near the psychological $6 level. On any rebound, the stock may first face resistance in the prior breakdown zone between $7.50 and $8.
Strong growth, but the market wants more
The weakness in the stock stands out because Megaport's recent half-year numbers still showed solid operating momentum.
Revenue rose 26% to $134.9 million in the first half of FY26, while EBITDA increased 28% to a record $35.3 million.
Network annual recurring revenue rose 16%, while net revenue retention came in at 111%, highlighting continued expansion across its customer base.
Even so, the market reaction since its February update suggests investors are still focused on valuation and margin progression. The other key issue is whether the company can maintain this pace through the second half.
Megaport's updated FY26 guidance points to revenue of $302 million to $317 million and EBITDA margins of 21% to 24%. Keep in mind, this still implies healthy momentum but may not yet be enough to improve sentiment.
Foolish Takeaway
Megaport is still delivering solid growth, but the share price is clearly being driven by weak momentum.
A 43% fall this year, fresh 52-week lows, and soft technical indicators suggest the market still needs to see more before sentiment improves.
At this point in time, the chart signal is still the clearest guide, and it continues to point lower.
