TechnologyOne Ltd (ASX: TNE) and Xero Ltd (ASX: XRO) shares haven't been immune to the selling pressures from the so-called 'SaaSpocalypse'.
That selling commenced in the last few months of 2025 before looking to have petered out in April.
If you're not familiar with the term, it refers to investor concerns that artificial intelligence may have the potential to replace the services that Software as a Service (SaaS) companies like Xero and TechnologyOne provide.
Coupled with other headwinds, like higher interest rates, this has sent most S&P/ASX 200 Index (ASX: XJO) tech stocks sharply lower over the last 12 months.
Indeed, while the ASX 200 has gained 4.4% since this time last year, the S&P/ASX 200 Information Technology Index (ASX: XIJ) has lost 38.2%.
As for the two tech stocks in question, the TechnologyOne share price is down 23.2% in 12 months, while Xero shares have tumbled a painful 58%.
Which brings us back to our headline question.
Image source: Getty Images
Xero shares: Buy, hold, or sell?
MPC Markets' Mark Gardner recently analysed the outlook for both ASX 200 tech companies (courtesy of The Bull).
"Xero is a quality accounting software provider," he said. "The shares have plunged in the past 12 months, partly in response to investor concerns about artificial intelligence replacing some of its services."
While Gardner sounded an optimistic note on the company's rebound potential, he issued a hold recommendation on Xero shares for now.
According to Gardner:
The company has a credible product road map to meet the challenge, such as JAX-powered bank reconciliation and an integration with Microsoft 365 Copilot. The company recently surpassed 5 million subscribers. Investors can hold, but should monitor the news flow.
Should I buy TechnologyOne shares today?
Atop Xero shares, Gardner also dug into TechnologyOne shares.
He noted:
This enterprise resource planning software company posted a positive result in the first half of 2026, generating revenue and net profit growth when compared to the prior corresponding period. It re-affirmed annual recurring revenue growth of between 16% and 18% for the full year.
TechnologyOne released its half-year results on 19 May. The company reported a 17% year-on-year increase in annual recurring revenue (ARR) to $598 million. And on the bottom line, profit after tax of $66.8 million was up 6%.
But with TechnologyOne shares having leapt 57.5% since plumbing a one-year closing low on 13 February, Gardner also issued a hold recommendation on this ASX 200 tech stock.
He concluded:
The business is executing well. Broker targets cluster around $32. We would rather add stock on any pull-backs rather than chase TNE after its recent bounce, so we stay on hold.
