Top Performing ASX Tech Stocks To Consider in Oct 2021
The ASX 200 closed 50.20 points or 0.70% higher at 7,256.70 on Thursday. The rally was triggered as technology stocks rebounded after yesterday’s selloff. This happened while energy and oil stocks remained weak as crude prices eased from 7-year highs. Explore our list of Tech Stocks for your next investment.
Our List of ASX Tech Stocks to Consider in October 2021
Tech stocks are making a comeback. It might be time to consider these three terrific growth stocks:
Afterpay (ASX: APT)
The tech shares scored a turnaround on Thursday after a very difficult past two weeks. Hence, the ASX All Technology Index is up 72 points or 2.43%, bouncing off 2-month lows. This propelled Afterpay share price to $120.63, up 3.12% for the day.
Wall Street paved the way for today’s gains, with all major indices bouncing about a per cent.
The S&P 500 added 45 points, or 1.05% while the Dow was up 312 points, or 0.92%. And perhaps more relevant to the Afterpay share price, the tech-heavy Nasdaq Composite recouped 178 points or 1.25%.
Technology shares shrugged off concerns about rising yields. This even as the US Treasury yields continued to climb. Overnight, the 10-year US Treasury yields hit session highs of 1.54% and are currently fetching 1.55%, the highest since mid-June.
Richly valued technology shares are the most sensitive to higher yields. This affects how investors value the company’s all-important future profits. Nonetheless, bargain hunters were quick to step up in last night’s session, driving broad-based gains across nearly all sectors.
Afterpay’s US-listed rival Affirm Holdings closed 19.95% higher after plunging by almost 8% on Tuesday. While APT’s soon-to-be parent company Square Inc rallied by 1.33% to US$239.12.
Based on Square’s closing price, its takeover exchange ratio of 0.375 shares and current exchange rates, this implies a theoretical value of about $121.52 a share for Afterpay. Since the last twelve-month period, the APT share price has appreciated by a solid 38.6%.
Zip Co. Ltd (ASX: Z1P)
Zip belongs to the hot sector of the moment, Fintech. Despite, the company is evolving in this relatively new industry, it has been around for a while. Hence, Z1P was first listed on the ASX in 2009 and is headquartered in Sydney. Zip has around 10,000 retail partners and 1,2 million customers in Australia.
Today, the Zip share price is up by more than 5% to $6.85. This follows the recent announcement of a major investment. According to the release, Zip has agreed to make a strategic US$50 million investment in India-based “Buy Now Pay Later” operator ZestMoney. The Indian BNPL has 11 million registered users, over 10,000 online merchants on the platform, and a point of presence in over 75,000 physical stores.
It is a considerable expansion opportunity for Zip. Thus, a potential massive earnings growth could be expected in the following years.
Z1P share performance in the past was much likely sideways. However, the recent event has contributed to a 29.5% rally year-to-date.
Xero (ASX: XRO)
Another hot tech stock to consider is Xero. Xero provides a cloud accounting solution for small businesses. The software enables SME owners to run their business efficiently on the go by uploading their banking transactions and invoices. Thus, that is a fantastic solution valued by many clients. On top of that, Xero reconciles the transactions and provides its clients with accounting services for a subscription fee.
The last month was a great month for Xero. The cloud-based firm saw its stock appreciated by almost 10% since early August to $152.98 per share. The outperformance has been driven by a positive reaction to the launch of its app store.
Xero launched its App Store across the ANZ and the UK markets. This is part of the company’s plan to streamline and simplify access to the thousands of apps currently available in its ecosystem. This App Store has a similar model to Apple and Google App store. It charges a 15% fee for app subscriptions purchased through its store.
However, Xero share price slumped along with the broad market correction in September losing all the gains accumulated in August.
Although looking at the long term, we see can only see a positive outcome for Xero. We believe, the recent correction is just a temporary event. Xero remains fundamentally a solid growth stock.
So far, we like the idea of increasing focus on monetising its strong market positions within the ANZ and the UK markets. Accordingly, we think that the incremental revenues will boost Xero to accelerate its ongoing global expansion.