It has been a brutal year for these two ASX tech stocks who have lost more than half of their market value over the past year.
Two of the ASX's former market darlings — WiseTech Global Ltd (ASX: WTC) and Xero Ltd (ASX: XRO) — have endured savage share price declines.
At the time of writing, WiseTech shares are down 21% over the past month, 53% in 2026, and around 70% over the past year. Xero hasn't fared much better. Its shares have fallen 20% over the past month, 38% year to date, and 61% over the past 12 months.
After such a dramatic sell-off, are brokers starting to see value?
Image source: Getty Images
WiseTech: Governance overshadows a quality business
The problems of this ASX tech stock haven't stemmed from weakening demand. Its CargoWise software remains one of the world's leading logistics platforms, used by freight forwarders, customs brokers, and global supply chain operators.
Instead, the market has become increasingly concerned about governance issues surrounding founder and executive chairman Richard White. The controversy first emerged late last year and has continued to weigh heavily on investor confidence.
Markets dislike uncertainty, particularly when it involves senior leadership. As governance concerns dominated headlines, investors steadily reduced the valuation they were willing to pay, regardless of the company's operational performance.
Yet the underlying business continues to perform well. CargoWise keeps winning customers globally, recurring revenue remains strong, and the company still enjoys high switching costs that create a powerful competitive moat.
Stuart Bromley, investment adviser at Medallion Financial Group, believes those strengths remain intact.
Despite ongoing management and governance scrutiny, WiseTech remains one of Australia's highest quality technology businesses with a dominant position in global logistics software, The company's CargoWise platform continues to gain market share globally. In our view, WTC offers a substantial long-term growth opportunity. While near-term sentiment may remain volatile, we believe the quality of the underlying business warrants a hold rating amid management executing its long-term strategy.
Bell Potter continues to rate the stock as a buy, although it has lowered its 12-month price target from $78.75 to $71.75. Based on the current share price of $32.01, this still implies potential upside of around 124%.
Xero: Higher rates hit valuations
Xero's challenges have been very different. Rather than governance concerns, investors have been worried about rising interest rates and their impact on high-growth software valuations. Higher rates reduce the present value of future earnings, putting pressure on technology companies that trade on premium multiples.
Artificial intelligence has added another layer of uncertainty, with some investors questioning how rapidly AI could reshape accounting software.
However, the business itself continues to impress. In its latest result, Xero delivered strong customer growth, rising recurring revenue, and increasing average revenue per user. The company now serves almost five million subscribers worldwide, while annualised recurring revenue continues to grow at an impressive pace.
That operational momentum has encouraged brokers. Morgans recently reaffirmed its buy recommendation with a price target of $111 per share, suggesting a 57% upside over the next 12 months.
