Why I think Xero and WiseTech shares are strong buys

These companies are already big, and I think they can get much bigger.

Xero Ltd (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) are already major technology businesses.

What keeps me interested in them is how much opportunity could still lie ahead.

For investors prepared to look several years into the future, I think both are strong buys.

Happy businessman fist pumping while looking at a tablet.

Image source: Getty Images

Xero shares

Xero is already deeply established in Australia, so it can sometimes feel like the company has travelled further than it actually has.

It finished FY26 with 4.92 million customers globally. Yet Xero has previously estimated its total addressable market at around 100 million small and medium-sized businesses.

The US illustrates the opportunity particularly well. Xero had around 424,000 US customers at the end of FY26. Its investor day material estimated there were more than 35 million small and medium-sized businesses in the country.

For me, that gap is far more exciting than simply talking about adding another few hundred thousand subscribers.

The business also has more to sell as it expands. Its acquisition of Melio has strengthened payments, while payroll and artificial intelligence are becoming more important parts of the platform.

I think Xero can gradually become the place where a small business handles much more of its financial life.

If the company can make meaningful progress in the US while continuing to grow elsewhere, today's customer base could eventually look surprisingly small.

WiseTech shares

WiseTech requires a little more patience from me right now.

The company has been through leadership and governance changes, while the e2open acquisition adds considerable integration work. Its new CargoWise Value Packs commercial model is also still relatively new.

Those factors create uncertainty around how smoothly the next few years unfold.

But WiseTech's position in global logistics software remains difficult for me to overlook.

Its technology is used by more than 20,000 logistics companies across 193 countries, including 47 of the world's top 50 third-party logistics providers and 24 of the 25 largest global freight forwarders.

I think those relationships say a lot about the strength of CargoWise.

Global logistics is incredibly complex. Freight forwarders need to manage customs, warehousing, transport, compliance, payments, and shipments moving across numerous countries and systems.

WiseTech has spent decades building software around those problems.

The e2open acquisition extends the company further across supply chains, while artificial intelligence could automate more work inside CargoWise and make the platform increasingly valuable to customers.

I am willing to accept some uncertainty while WiseTech works through these changes because its starting position remains so strong.

Foolish takeaway

Xero already serves millions of businesses but has barely scratched some of its largest potential markets, while WiseTech already sits at the heart of many major logistics companies while continuing to expand what its technology can handle.

I think both businesses still have plenty of room to surprise investors over the next decade.

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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