Xero Limited shares are trading higher today and are currently 2% higher at $100.96 per share.
As being seen as higher risk investments combined with the greater uncertainty in the overall market, ASX tech shares have experienced a strong downtrend during the year but have recently experienced a comeback due to various macroeconomic trends.
The S&P/ASX All Technology Index (XTX) rose 2% on the day and has returned over 9% this week as investors rotate back into high-beta tech shares.
The US Federal Reserve provided clearer expectations on interest rates, and the Chinese government promised stronger stability in their equity markets, which provides a bullish trend for higher risk tech stocks.
Ben Clark Portfolio Manager at TMS Capital, Xero is one to look for once the market begins to trudge back north and the economy begins to settle. He stated: “The market will come back,” he told Livewire. “When growth starts to run, the businesses that reported really strongly in February, and it was just completely ignored, will be the first businesses to roar back.”
JP Morgan also agrees, taking into account Xero as a market leader in cloud accounting to be a key driver for growth into the future. They stated: “XRO has proven its credentials in the ANZ market and is now looking to replicate its model in its international markets,”
Over the past week Xero Ltd shares have risen over 8% in the green.