The S&P/ASX 200 Information Technology sector rose ~8% in August, despite a volatile month for global markets
Global X said the Nasdaq had mixed performance driven by a combination of positive and negative factors
Wisetech Global rose 27% after it outperformed expectations and reported EBITDA guidance ~4% above consensus
The S&P/ASX 200 Information Technology sector rose ~8% in August in what was a volatile month for global markets and is up more then 38% YTD to remain the top-performing sector of 2024.
The US Nasdaq Composite index – the bellwether for the global tech sector – was also up in August, but trailed the S&P 500.
Global X investment strategist Billy Leung told Stockhead there was a mixed performance among US tech stocks with a combination of positive and negative factors that largely offset each other including among the so-called Magnificent 7 of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
He said Meta introduced new AI-driven ad tools and generative AI features aimed at enhancing user engagement across its platforms.
“These initiatives show promise for future growth, though rising development costs impacted investor enthusiasm.
“Tesla outlined its long-term vision, including next-gen vehicle platforms and energy solutions at its investors day.”
He added that while the market had mixed reactions to the announcements, they provided a positive outlook for Tesla’s strategic direction.
“Cisco’s Q4 results exceeded expectations, with $13.6bn in revenue and $0.87 in EPS, driven by strong demand in data centres and the successful integration of Splunk.
“This outcome was a positive signal for the tech sector, particularly in networking and cybersecurity.”
Chip maker Nvidia was a key focal point in August, with rumours of delays in its next-generation GPU architecture, Blackwell, which Leung noted could be postponed from H2 2024 to as late as Q2 2025.
“These concerns, coupled with a setup where Nvidia’s share price had already run up 15% in the two weeks prior to earnings, created high expectations,” he said.
Leung said although Nvidia reported strong July quarter results with US$30bn in revenue (5% above estimates) and solid guidance, the lack of clarification on the Blackwell delay and some margin pressure led to a ~7% drop in the stock post-results.
“This added significant pressure on the semiconductor sector, further weighing on the broader tech market.”
The Global X strategist also highlighted that Warren Buffett-owned Berkshire Hathaway’s disclosure of selling 55.8% of its Apple holdings (505 million shares) put pressure on Apple’s stock in August and negatively impacted market sentiment, especially among retail investors.
“For August 2024, the ASX tech sector was indeed strong with several key players contributing.”
The top ASX tech winners in August 2024
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Leung said the standout and the primary driver of the sector’s gains in August was large cap WiseTech Global (ASX:WTC), which rose 27% after it outperformed expectations and reported FY25 EBITDA guidance that was ~4% above consensus.
“This was largely due to better-than-expected operational efficiencies and a favourable product mix, particularly within its CargoWise platform,” he said.
“Additionally, WiseTech provided a strong revenue outlook, on the back of continued global demand for its logistics software solutions.
“Management highlighted the momentum expected to carry into FY26, driven by strategic investments in technology and further market expansion.”
Provider of tech solutions to overcome challenges associated with remote video & data streaming, Harvest Technology Group (ASX:HTG) rose 44% in August.
Technology One (ASX:TNE) rose 17% in August and Leung noted it had “impressive results, which was driven by the signing of new government contracts and increasing adoption of its SaaS ERP solution”.
Defence manufacturing company HighCom (ASX:HCL) was also in the tech winners circle in August and rose 58% after a series of positive announcements including new multi-million dollar contracts to supply ballistic products to military customers.
HCL also provided FY24 guidance and a company update in August, including that revenue had come in at the lower end ($46m) of the estimate given to the market in May.
The company said that a delay in finalising a recent contract has pushed that revenue out to FY25, and that it had seen an improvement in cash holdings from $1.6m to $6.2m.
The top ASX tech losers in August 2024
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