Top 10 tech stocks to watch on the ASX

About Australian tech stocks

While the Australian equities market is known for being dominated by finance and resource stocks, it's also host to some outstanding tech companies that are global leaders when it comes to breakthrough innovations.

Australia is an advanced economy that is home to some of the world's most highly-ranked tertiary institutions and research groups. This deep pool of knowledge and expertise has enabled Australia to nurture leading tech companies that punch well above their weight in global terms.

In addition to the country's outstanding tertiary education system, Australia's tech sector also benefits from the country's excellent legal and financial systems that help to create certainty and trust for investors, as well as its status as an English-speaking country that is highly open to the best talent from around the globe.

Like other markets around the world, Australian equities have recently come under pressure due to rampant post-Covid inflation, alongside hawkish monetary policy intended to curb breakneck price gains.

Relief could soon be on the way however, following signs that Australian inflation is finally under control and that the RBA could commence cuts to interest rates by as early as the second half of 2024

A change in monetary policy settings could potentially bode well for Australian tech equities, with certain companies potentially reaping greater benefits from far-reaching changes to society and the economy in the wake of the Covid era.

Top 10 ASX-listed tech stocks to watch

Here is a list of 10 of the most promising ASX-listed tech stocks for investors to watch as of March 2024

1. Block (ASX: SQ2)
2. Megaport (ASX: MP1)
3. Novonix (ASX: NVX)
4. Xero (ASX: XRO)
5. Altium (ASX: ALU)
6. Hansen Technologies (ASX: HSN)
7. Emyria (ASX: EMD)
8. Brainchip (ASX: BRN)
9. PlaySide Studios (ASX: PLY)
10. Universal Biosensors (ASX: UBI)

Block (ASX: SQ2)

Block Inc (AU) is a global fintech company that was launched in 2009 by Twitter co-founder and former CEO Jack Dorsey.

The company has several payment brands that target small businesses and consumers, including Square, Cash App and Australian BNPL platform Afterpay. Other key brands include decentralised finance platform TBD, music streamlining service Tidal and web hosting service Weebly.

In January 2022, the company completed its acquisition of Afterpay for $39 billion, giving it access to 3.6 million active customers in the US, 3.1 million in Australia and New Zealand and 600,000 in the UK.

Block's share price has gyrated considerably since the start of 2024, but is currently up 2.34% year-to-date. The company could achieve greater success in future on the back of its bitcoin-related ambitions.

Megaport (ASX: MP1)

Megaport Limited is a 'network-as-a-service' company that provides cloud connectivity services, enabling customers to connect their IT infrastructure to leading cloud providers, networks, and managed service providers through a single, secure, and scalable platform.

The company has over 120 unique data centre operators and more than 365 services, providing connectivity services to over 2,700 customers.

Megaport recently upgraded its earnings guidance for FY24 from $51M - $57m to $56 - $58M, reflecting an increase of 177% to 187% compared to FY23 normalised EBITDA of $20.2 million.

Novonix (ASX: NVX)

NVX-AU specialises in the development of testing equipment for lithium-ion batteries – one of the key components in electric vehicles which are set to rapidly increase in popularity on the back of mounting climate change concerns.

NVX has its origins as a research lab at Dalhouse University run by Dr. Jeff Dahn – a leading pioneering in lithium-ion battery technology. The company could benefit from rapid growth in the adoption of electric vehicles globally.

Xero (ASX: XRO)

Software developer Xero Ltd provides cloud-based accounting tools to small business owners and bookkeepers. A key selling point of Xero's products is the automation of the many accounting and bookkeeping tasks that small businesses need to perform regularly.

Xero has integrated them with more than 1,000 third-party apps to improve the functionality of its software. The company says its products currently have more than 3 million subscribers in Australia, New Zealand and the United Kingdom.

A note from Macquarie released at the start of May indicates that its analysts have maintained their outperform rating for Xero, with an improved price target of $154.60. Goldman Sachs has also maintained its convictino buy rating for Xero, with an improved price target of $156.00.

Altium (ASX: ALU)

According to Altium Ltd, it is currently the world's leading provider of printed circuit board (PCB) software after 35 years of research and design work.

75% of the company's revenues are subscription-based, while its earnings come from diverse regional sources, including the Americas (55%), Europe (31%), emerging markets (10%) and Asia (5%).

The company's share price surged in February following its acceptance of a takeover offer from Tokyo-based Tenesas Electronics, and is currently up over 42% year-to-date.

Hansen Technologies (ASX: HSN)

Hansen Technologies Ltd specialises in the development of software solutions that cater to the needs of the utilities, energy and communications sectors.

It specialises in software for energy and communications service providers, enabling them to bring new products and services to market faster and ensuring their smooth delivery.

The company has more than 600 clients in the energy and communications sectors spread across more than 80 countries, with key customers including Telstra, Vodafone and Energy Australia.

Emyria (ASX: EMD)

Health tech company Emerald Clinics Limited specialises in data-driven drug development to address underserved areas of medical treatment. Its current projects include the use of cannabidiol drugs to treat mental health issues, the use of MDMA for the treatment of post-traumatic stress disorder, and treatments for CBD/THC irritable bowel syndrome.

Emyria's share price surged 19% in January, after it obtained "Authorised Prescriber" status for its unnamed distinguished psychiatry specialist to prescribe MDMA for the treatment of PTSD.

PlaySide Studios (ASX: PLY)

PlaySide Studios Limited is Australia's largest publicly traded gaming company, with a portfolio of 52 titles covering mobile devices, PCs, virtual reality and augmented reality.

In addition to games based on its own original intellectual property, PLY has entered partnerships with some of the world's largest and most renowned entertainment companies, including Disney, Warner Bros and Nickelodeon.

Iress (ASX: IRE)

Fintech company Iress Ltd produces software for the financial services sector, covering areas including financial advice, trading and market data, investment management and superannuation.

The company has operations in the Asia-Pacific, United Kingdom, Europe, North America and Africa. According to Iress, over 10,000 businesses and more than 500,000 people are users of its software.

The company's share price rose significantly in November last year after Iress unveiled a strategic adjustment to help it overcome losses from earlier in 2023.

Universal Biosensors (ASX: UBI)

Universal Biosensors Inc engages in the development, production and commercialisation of diagnostic testing for use in both institutional and household settings. These products cover monitoring of blood glucose levels, blood clot tests, immunological tests and molecular diagnostics.

The company says that its biosensor technology platform has provided over 10 billion diagnostic tests to patients globally, generating sales worth billions of dollars.

Key partners include Mayo Clinic Biopharma Diagnostics, with whom UBI entered a three-year master collaborative agreement in November.

Here’s how to buy, sell and trade these promising top 10 tech companies listed on the ASX:

How to invest in or trade in ASX tech stocks with us

With us, traders and investors can buy any of the top 10 tech stocks, using our share trading platform by following four steps:

1. Open a share trading account or log in

2. Fund your share trading account

3. Open the platform on the share trading account, go to the 'finder' panel and type in and search for your preferred tech stock

4. Click on the deal ticket, where the ‘on exchange’ option will appear. ‘On exchange’ means interacting directly with the relevant exchange

How to trade tech stocks with CFDs

For those who would rather use leverage derivatives like CFDs, you can use our market-leading platform to capitalise on the long (‘buy’) and short (‘sell’) price movements.

Trading tech stocks with CFDs with us can be done in these few steps:

1. Open a CFD trading account or log in

2. Look for the tech stock you would like to take a short or long position on

3. Click ‘sell’ or ‘buy’ in the deal ticket

4. Choose your position size

5. Confirm the trade

Features of trading tech stocks with CFDs

• Leverage: these derivative products enable investors to get exposure to a relatively large position in a particular asset – with a reduced initial capital outlay. Use of leverage however may prove a doubled-edge sword for those not implementing appropriate risk management strategies because while it maximises potential gains reaped by a trade, it can also magnify losses

• Flexibility: this differs from buying an asset outright. CFD trading gives you the flexibility to speculate on the rising or falling price movements of an underlying asset. This means when trading you can easily enter short positions if you believe an asset is overpriced and will decline in value

• Hedging: a hedge is an investment or trade designed to mitigate your existing exposure to risk. This potentially offsets one or more other positions you currently have open. You can implement hedging strategies when trading with us

While trading CFDs has its advantages, you should also be aware that trading CFDs carries significant risk, as leverage amplifies any profits or losses. You don’t own or have any interest in the underlying asset. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Please consider the margin trading product disclosure statement (PDS), risk disclosure notice and target market determination before entering into any CFD transaction with us.