Xero Ltd (ASX: XRO) shares are trading around $80 on Tuesday.
That is a long way from their 52-week high of $196.52.
When a stock falls that far, it is easy to focus on what has gone wrong. I think it is just as important to ask what could go right from here.
So, could buying Xero shares at these levels actually lead to strong long-term returns and make me rich?
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A big gap back to previous highs
One of the simplest ways to think about the opportunity is to look at where the share price has come from.
If Xero were to return to its previous high of $196.52, that would represent a gain of almost 150% from current levels.
That alone is not a reason to buy.
But it does highlight how much expectations have shifted. The market is no longer pricing Xero the way it once did.
The question now is whether the cloud accounting business can grow into something that justifies moving back toward those levels, or even beyond them over time.
The growth engine is still there
Stepping back, the core of the Xero story has not really changed.
It is still a global cloud accounting platform serving small and medium businesses, with millions of subscribers and a growing ecosystem.
Importantly, management continues to highlight a large and expanding total addressable market, supported by both software adoption and new opportunities like payments.
The acquisition of Melio is a good example of that.
By combining accounting with payments, Xero is trying to capture more value from each customer and expand its presence in the US market. That has the potential to drive both revenue growth and stronger unit economics over time.
So this is not a business that has run out of runway. It is still building.
AI looks like an opportunity
Artificial intelligence (AI) is one of the main reasons sentiment has weakened across technology stocks.
For Xero, I think the story is a bit different.
The company is positioning itself as a system of record for small business financial data, with the goal of becoming a system of action and decision-making through AI.
That is important. If Xero sits at the centre of a customer's financial data, it is in a strong position to layer AI tools on top. That can help automate workflows, generate insights, and improve decision-making.
There are already signs this is happening.
More than two million subscribers are using AI features, and the company is continuing to expand these capabilities across its platform.
Rather than disrupting the business, AI could make the platform more valuable.
The path for Xero shares will not be smooth
Even with all of that, I do not think this is a simple story.
The Xero share price decline reflects real uncertainty.
There are questions around competition, the pace of AI change, and how the business executes in key markets like the US. Sentiment toward tech stocks more broadly also plays a role.
This means any recovery is unlikely to happen quickly.
But for long-term investors, that is often where the opportunity sits. The market tends to be more cautious and undervalue shares when uncertainty is high.
Foolish takeaway
Buying Xero shares at $80 does not guarantee anything.
But it does give you exposure to a business that still has a large market, multiple growth drivers, and the potential to expand its role through AI and payments.
If the company continues to execute and sentiment improves over time, I think the current price could look very different in a few years.
