10 Best ASX Tech Stocks to Watch 2024
As technology continues to advance and innovate, tech stocks have become a focal point for investors. The Australian Securities Exchange (ASX), as an important financial hub in the Asia-Pacific region, has homed numerous tech companies for Aussies to choose from. In 2024, the Australian tech stock market is expected to remain vibrant, offering investors a wealth of opportunities.
This article will delve into an overview of Australia's technology sector and provide 10 ASX tech stocks to watch, concluding with some investment considerations to assist investors in making informed decisions.
Overview of Australian tech sector
In recent years, the technology industry has become one of Australia's largest sectors, playing a significant role in export services and possessing tremendous growth potential. According to research by Accenture and the Australian Technology Council, in the last fiscal year, the technology industry generated an economic benefit of up to 167 billion Australian dollars, ranking as the third-largest economic contributor, following the mining and financial industries.
Diversified high-tech industries: Australia's technology sector spans across a broad range of industries, from information technology to biotechnology, mineral resource development to environmental protection, plus sustainable technologies. By 2020, the industry's total output value had swelled to $70 billion. Companies that hold patent technologies and possess innovative intellectual property rights play a leading role in this field. Australian tech giants such as Atlassian, Lendlease, Jetstar Airways, and Canva stand out in the international market with their innovative strength and global perspective.
Digital technology clusters: The development of Australia's digital industry shows a clear trend of geographical concentration, forming several key digital technology industry clusters. These clusters include Sydney's Arc area, Melbourne's Diamond area, Brisbane's Corridor area, and Canberra's Triangle area. Each cluster is the core of technological innovation and business activity, playing a key role in driving the country's economic growth and enhancing productivity. The Sydney Arc cluster is particularly prominent, gathering the Australian branches of international giants like Google and Microsoft, while the Melbourne Diamond cluster boasts 62 local listed companies, highlighting the density of business activity and economic strength.
Artificial intelligence ecosystem: Australia's innovative capabilities in the AI field are widely recognised, especially in livestock production, medical laboratory technology, horticulture, vision testing, and dermatology. There are currently 544 active artificial intelligence companies in the country, with nearly 396 established in the past decade and almost 204 emerging in the last five years, showing an average annual growth rate of 7.7%. These companies are mainly committed to the research and development, sales, and related services of artificial intelligence technology, particularly providing data analysis and management, consulting, and skills training services.
Top 10 ASX tech stocks to watch
Among the technology stocks listed on the Australian Securities Exchange (ASX), companies such as Block Inc. and WiseTech Global have become the focus of investor attention due to their outstanding market performance and innovative capabilities. These companies cover a range of fields including payment technology, data centre operations, and financial services. They not only hold a leading position in the domestic market but also demonstrate strong competitiveness and growth potential on a global scale. Below is a list of some of the top tech stocks ASX, ranked by market value at the time:
1. Block Inc (SQ2.AU)
Block Inc. focuses on providing innovative payment solutions and services for businesses. The company's Cash App is a widely popular peer-to-peer payment network application that supports a variety of financial services, including transfers, spending, and investing. With its cutting-edge technology and user-friendly design, Block Inc. has driven innovation in the financial technology sector. In 2023, it processed payments exceeding 200 million US dollars, demonstrating its strong capabilities and market influence in the field of tech payment services. Block Inc. reported a robust performance in its first quarter financial report of 2024. The company's Bitcoin strategy may appear promising to some investors, which may contribute to a potential positive outlook for the future.
2. WiseTech Global Ltd (WTC.AU)
WiseTech Global Ltd is renowned for its flagship product suite, CargoWise. This software offers advanced solutions for international freight forwarders, enabling the automation and optimization of logistics operations. With its innovative technology, WiseTech Global supports its customers in managing complex supply chain tasks while maintaining an industry-leading customer retention rate of over 99%. For the first half of the fiscal year 2024, Wisetech has reported a 32% surge in revenue, amounting to AU$500 million, with an underlying earnings per share of AU$0.388.
3. Xero Ltd (XRO.AU)
Xero Ltd primarily offers revolutionary online accounting and business solutions for small and medium-sized enterprises. With its cloud computing platform, known for intuitive design, robust functionality, and an exceptional user experience, Xero has fundamentally transformed traditional accounting practices. Xero's financial report for the 2024 fiscal year demonstrates continued strong performance in markets with higher cloud penetration, with revenue consistently achieving double-digit growth, increasing by 22% to $NZ969.9 million. The Average Revenue Per User (ARPU) grew by 11% to $NZ37.97, and the total number of subscribers increased to 2.4 million.
4. Computershare Ltd (CPU.AU)
Computershare Ltd is a global leader in financial services and technology, specialising in equity plan management, corporate registration services, shareholder meetings, and employee equity plans. The company uses advanced technology platforms to provide customers with efficient and secure service experiences. Computershare's innovative technology not only optimises shareholder and employee engagement but also enhances the efficiency and transparency of corporate issuance services through automation and digital solutions.
5. CAR Group Ltd (CAR.AU)
CAR Group Ltd is a leading automotive technology company in Australia, operating the country's largest online automotive retail platform. The company provides comprehensive automotive sales, marketing, and data services through advanced digital technology, committed to enhancing the efficiency and user experience of automotive transactions. Its technological innovation occupies a significant position in the industry, driving the digital transformation of the automotive retail sector.
6. Nextdc Ltd(NXT.AU)
NextDC Ltd is a leading data centre service provider in Australia, focusing on delivering secure and reliable hosting and interconnection services for enterprises, cloud service providers, and ICT and telecommunications network operators. The company operates a network of data centres across major cities in Australia, supporting clients' digital transformation and business growth through advanced technology and facilities.
7. Altium Ltd (ALU.AU)
Altium Ltd focuses on providing advanced design tools and solutions for electronic engineers to support the entire product development process, from concept to manufacturing. Altium's software platform integrates key functions such as schematic design, PCB layout, signal integrity analysis, and 3D modeling, assisting engineers in achieving innovation and improving design efficiency.
8. Seek Ltd (SEK.AU)
Seek Ltd is Australia's largest online recruitment company, offering a diverse range of services including career services and educational courses. Its platform spans Australia, New Zealand, and over 20 countries globally. The company continuously enhances its competitiveness in online education and recruitment services through technological innovation and strategic acquisitions, such as stakes in FutureLearn and Coursera, committed to optimising user service experience.
9. Technology One Ltd (TNE.AU)
Technology One Ltd offers comprehensive enterprise software solutions, including ERP, finance, human resources, and customer relationship management services. With its innovative SaaS (Software as a Service) model, the company provides customised and integrated cloud solutions for businesses of all sizes, dedicated to driving operational efficiency and digital transformation through advanced information technology.
10. HUB24 Ltd (HUB.AU)
HUB24 Ltd is an Australian financial technology company that provides a comprehensive platform for wealth management and investment solutions. The company's technology-driven approach focuses on delivering efficient and secure services to financial advisers, brokers, and institutions, supporting their clients in achieving financial goals through innovative investment strategies and digital tools.
Final thoughts on the top ASX tech stocks
Upon an in-depth analysis of ASX tech stocks, we can see the thriving landscape of Australia's technology sector and the immense potential it holds for investors. Investing in tech stocks, while fraught with risks, also presents the possibility of substantial returns. When making investment decisions, it is crucial to consider a company's growth potential, financial health, market position, and technological development trends. At the same time, building a diversified investment portfolio, such as AI ETFs, can effectively reduce risk and enhance the stability of overall investments.
