• The ASX tech sector rallied 11.6% in May and is up 16.94% YTD, surpassing the S&P ASX 200
  • Audio Pixels tops May ASX tech winners following AGM comments by CEO and chairman
  • Archer Materials performs strongly in May after key global partnership 

May overview

May was a tough month for global share markets and the ASX, which were impacted by several factors including the latest US debt ceiling crisis.

It took until the end of the month for even signs that there would be a resolution to ensure the world’s largest economy could pay its bills.

The House of Representatives has voted 241-187 and advanced the debt ceiling bill to the Senate with confidence it will pass. There does remain, however,  a handful of hard-line Republicans against the moves to raise the $US31.4 trillion debt ceiling with just days to go until the US is expected to default.

And it seemed the old saying ‘when America sneezes the rest of the world catches a cold’ seemed to ring true as markets were rattled by what would happen if  the US debt ceiling drama was not resolved.

Furthermore, Australia’s headline inflation came in at 6.8% for April, up from 6.3% the month before and above what experts had generally forecast.

The higher than expected inflation has increased speculation the RBA would hike the cash rate further in June after surprisingly raising the cash rate by 25bp to 3.85% in May after an April pause.

The RBA has warned that it could again lift rates in June, depending on the economy and inflation.

 

Tech leads sector winners on back of AI frenzy

While seven of the 11  ASX sectors finished in the red during May, the S&P ASX 200 Information Technology sector shone, taking out the gold medal for best in performance over the month, up an impressive 11.6%.  It has risen 16.94% YTD.

The sector beat the benchmark S&P ASX 200, which fell 2.53% in May and is down 0.73% YTD.

The NASDAQ Composite ended May with a 5.8% increase as investors remained enthusiastic about the emerging field of artificial intelligence (AI) and related companies.

NASDAQ-listed chipmaker Nvidia was the notable stock of the month after seeing a 36% increase in May and briefly reaching a market cap of $1 trillion.

Upon release of its Q1 FY24 results after market close last Wednesday, the Nvidia share price spiked 26% adding about $200bn to its market cap. It’s up 164% YTD.

The much-needed rally for tech stocks comes on the back of a tough couple of years for the sector with inflation and interest rate rises seeing investors shy away from high growth assets.

Global X Australia head of Investment Strategy Blair Hannon told Stockhead that AI is leading the uptick in tech in 2023, particularly among the big names on the NASDAQ.

“The money is flowing to those bigger names like Nvidia, Microsoft which has a stake in Open AI company ChatGPT,” he said.

He said if you consider the FAAMNG index, which includes Facebook parent company Meta, Apple, Amazon, Nvidia and Google parent company Alphabet, it has outperformed the broader NASDAQ by 32% so far in 2023.

“If it wasn’t for this mini AI boom we probably would be seeing more pressure across the tech sector,” he said.

“The performance of the mega caps is outperforming the broader tech index.”

 

Here are the top ASX tech stocks for May 2023

Scroll or swipe to reveal table. Click headings to sort. 

Wordpress Table Plugin

 

Investors hearing Audio Pixels loud and clear

Leading the ASX tech winners list in April was Audio Pixels (ASX:AKP), which is looking to revolutionise the audio speaker market, replacing large cumbersome devices with 1mm-thick panels that look like a tiny micro-SD memory card.

As Stockhead’s Gregor Stronach noted AKP climbed 34% on Tuesday in the immediate aftermath of the company’s AGM notes from the CEO and the chairman hitting the ASX announcements board.

There wasn’t anything in the announcements that – according to the company – amounted to ‘news’ that the market hadn’t already been made aware of, but the instant the CEO and chairman commentary went live, there was a surge before the company was promptly put into a trading halt.

Then AKP announced that a demonstration video of its GEN I chip playing by the chief technology officer, Yuval Cohen, at the AGM had been made available upon shareholders’ request to the company’s website.

 

Quantum computer stock Archer Materials riding tech wave

Semiconductor company Archer Materials (ASX:AXE) also performed strongly in May.  AXE is the only stock on the ASX focused on the emerging field of quantum computing, which is is forecast to bring significant changes to the world.

The Federal Government has released the new National Quantum Strategy to ensure Australia is at the forefront of the quantum computing revolution.

The tech opportunity of quantum computing for Australia is forecast to reach $2.2 billion by 2030 & $6 billion by 2045.

READ: How Australia is at the forefront of multi-billion dollar quantum computing revolution

AXE on May 22 announced it is the first Aussie company to partner with the World Economic Forum’s Centre for the Fourth Industrial Revolution (C4IR).

The company said the partnership recognises AXE’s leadership and innovation in qubit processors for semiconductor devices in quantum computing, and graphene-based biochip devices in medical diagnostics.

AXE yesterday responded to a speeding ticket it was also issued by the ASX, saying it was “not aware of any information concerning it that has not been announced which, if known, may explain the recent trading pattern in the securities”.

Furthermore the company said it is “not aware of any explanation for the recent price increase and increase in volume of its shares traded”.

 

The AKP & AXE share price today:

 

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