Xero Ltd (ASX: XRO) has been one of the ASX's great technology share success stories.
But after years of strong growth, the question is whether the cloud accounting company still has enough runway to be a genuine buy and hold option for the next decade.
I think the answer is yes.
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A platform at the centre of small business
The strength of Xero is that it sits inside one of the most important parts of a small business: its finances.
Accounting software is not something a business owner changes lightly. Once invoices, payroll, payments, reporting, bank feeds, and adviser relationships are connected to a platform, switching becomes disruptive.
That gives Xero a sticky customer base and a strong foundation to build from.
The company is no longer just trying to sell cloud accounting subscriptions. It is building a broader financial operating system for small businesses, bringing together accounting, payroll, payments, insights, and automation.
That is important because the more jobs Xero can solve, the more valuable the platform becomes.
The US opportunity remains important
Xero already has strong positions in Australia, New Zealand, and the UK.
But the United States remains the market that could change the company's long-term profile.
The acquisition of Melio gives Xero a stronger payments capability in the US, which is important because accounting and payments are closely linked for small businesses.
Xero's recent result showed US revenue increased strongly, with the company reporting 240% headline growth and 30% organic growth excluding Melio. Its US customer base also increased to 424,000.
The US will not be easy. It is competitive and will require investment. But if Xero can keep building traction, it gives the company a far larger growth opportunity than its home markets alone.
AI could deepen the moat
Artificial intelligence (AI) is both a risk and an opportunity for software companies.
For Xero, it looks more like an opportunity.
The company already has deep customer data, financial workflows, bank feed connections, tax integrations, payment rails, and trusted adviser relationships. These are not easy for a new AI tool to replicate.
Xero is using AI to automate more of the work small businesses and accountants do every day. Its recent update highlighted more than 40 million transactions reconciled through auto bank reconciliation, with reported accuracy of 97%. It also said more than 500,000 customers had adopted new GenAI features launched in the past 18 months.
Clearly AI is not just a buzzword here. It can help make the product more useful, improve customer efficiency, and potentially support future revenue growth.
Should you buy and hold Xero shares?
I would be comfortable buying and holding Xero shares for 10 years.
The company has a sticky product, a large global market, a growing payments opportunity, and a strong position in small business financial workflows.
There will be risks. But for patient investors, I see Xero as one of the best ASX growth shares to hold for the long term.
