• ASX tech stocks could offer hidden growth potential
  • It could be a great play for investors looking beyond US tech giants
  • We discuss a few under-the-radar stocks here, and what they do

 

While US mega-tech stocks continue to steal the spotlight, attracting massive investor interest with their dominance in the market, there’s an increasingly compelling case for looking beyond the familiar giants.

The ASX is quietly becoming a hotbed for innovative tech small caps, offering a unique opportunity to tap into the next wave of high-growth companies.

Some of these smaller, more agile players are at the forefront of cutting-edge advancements in fields like artificial intelligence – an area that’s poised for explosive growth.

For investors seeking diversification or looking to uncover the next big breakthrough before it hits the global stage, the ASX’s tech small caps could present an exciting, yet often under-appreciated, alternative.

With that in mind, here are the Top 10 performing small-cap tech stocks on the ASX in 2024 so far.

 

Name Ticker Price YTD % Change Market Cap $
Appen APX $2.68 325% 698.77M
Douugh DOU $0.02 256% 17.31M
Adisyn AI1 $0.06 253% 18.14M
TZ Ltd TZL $0.07 171% 15.49M
Dxn DXN $0.07 130% 15.42M
WRKR WRK $0.06 97% 106.66M
Catapult CAT $2.63 91% 713.85M
Credit Clear CCR $0.33 83% 138.78M
ReadCloud RCL $0.08 74% 11.99M
Adveritas AV1 $0.08 73% 67.10M
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Appen (ASX:APX)

Most of us have probably heard of Appen, a once ASX darling and a global company that helps businesses make their artificial intelligence (AI) smarter and more effective.

Appen does this by providing high-quality data that AI systems need to learn and improve. Think of it like teaching AI by showing it examples – whether it’s language, images, or even sounds.

Appen works with companies in industries like technology, healthcare, and finance. Its list of customers include the who’s who in the tech world, including: Microsoft, Amazon, Google, Facebook, Apple, Uber etc.

In its latest filing for Q3 FY24, Appen reported a 13% drop in total revenue compared to the pcp, mainly due to a decline in revenue from Google. However, when excluding Google, the company’s revenue grew by 35%.

The growth was driven by several successful generative AI projects, particularly in China and with other global customers.

Appen also reported a significant improvement in profitability, with an underlying EBITDA of $1 million, a turnaround from a loss in the previous year.

Cash flow remained healthy, with $30.3 million in cash at the end of September.

 

Adisyn (ASX:AI1)

Adisyn provides a range of products and services for the Australian defence industry supply chain.

The company’s primary focus is on data protection, management and security, especially in sectors where the handling of sensitive information is critical.

As the defence industry grows, especially in the wake of geopolitical shifts and security agreements like the AUKUS pact, Adisyn has positioned itself to meet the increasing demand for cybersecurity and regulatory compliance.

The company also offers SMEs the tools they need to protect their data from evolving cyber threats and ensure their operations meet strict security standards.

Recently, Adisyn provided funding for 2D Generation Ltd to order a highly specialised Atomic Layer Deposition (ALD) machine from Beneq, a leader in the field of ALD equipment.

The ALD machine is used in the semiconductor industry to apply extremely thin layers of material, down to the atomic level, onto chips. This process is crucial for producing more powerful, smaller, and energy-efficient chips.

2DG has been working to develop a patented solution for applying graphene coatings onto semiconductors at temperatures below 300°C – something that hasn’t been achieved before.

This breakthrough could enable the next generation of semiconductors, which are capable of being further miniaturised, consuming less power, generating less heat, and offering greater computational power.

The ALD machine is expected to be installed within five to six months, and 2DG will continue developing its existing equipment in the meantime.

For Adisyn, this investment is an important step in leveraging 2DG’s semiconductor solutions to create opportunities in key markets such as AI, data centres and cybersecurity.

 

DXN (ASX:DXN)

DXN designs, builds and operates modular data centres.

These are prefabricated, portable units that can be quickly assembled and customised for clients needing secure, reliable infrastructure for data storage and processing.

Unlike traditional data centres, which can take months or even years to build, modular data centres are made in a factory and then transported to the site, where they can be set up much faster.

This makes them ideal for businesses that need quick and flexible solutions to manage increasing data demands.

These modular units are being deployed in industries such as telecommunications, mining, government, defence and more.

Since FY21, DXN has successfully delivered over 80 modular data centres globally, with 21 units deployed in FY24 alone. In FY24, the company generated $8.2 million in revenue and achieved $2.4 million EBITDA.

DXN operates both internationally and within Australia, with key facilities in Darwin and Hobart, where it owns and operates data centres on long-term contracts for customers that include telcos, subsea operators and government clients.

DXN’s business is particularly thematic right now for investors, as it aligns closely with some of the biggest trends in technology and infrastructure.

 

Catapult Group (ASX:CAT)

Catapult is a global leader in sports technology, focused on helping teams and athletes perform at their best by providing advanced wearable devices and cutting-edge software.

The company creates smart technology that tracks and measures an athlete’s movements in real-time, providing valuable insights into their physical condition, performance and health.

This data helps coaches and teams make smarter decisions about training, tactics and recovery.

Catapult’s products include GPS tracking systems that measure things like speed, distance and effort, as well as video analysis tools that allow coaches to review key moments in games.

It works with top sports organisations across a wide range of sports, including football, rugby, basketball and tennis.

For example, the company recently partnered with UEFA to deliver live performance insights during Euro 2024 and introduced a sideline video analysis tool for American football.

In its latest filing last Thursday, Catapult reported strong performance in the first half of FY25, with revenue up 19% compared to the pcp.

The company’s Annualised Contract Value (ACV), which measures future revenue, grew by 20%, reaching US$96.8 million. This was driven by strong adoption of its wearable technology and video solutions across different sports including football, soccer and motorsport.

Free cash flow also rose to US$4.8 million.

Catapult said it’s optimistic about the second half of FY25, expecting continued strong growth.

 

ReadCloud (ASX:RCL)

ReadCloud provides digital learning solutions designed to improve the education experience for students and teachers.

The company’s flagship is its eReader platform, which offers access to a vast range of interactive educational content.

This includes over 200,000 digital textbooks from 43 of the world’s leading publishers, along with specialist learning materials for vocational education and training (VET).

The platform allows teachers and students to collaborate by making social annotations, embedding multimedia elements and using a text-to-speech feature available in 120 languages.

Beyond digital textbooks, ReadCloud is also engaged in Vocational Education and Training (VET), particularly for secondary school students across Australia.

The company helps deliver vocational qualifications in areas like early childhood education, hospitality, business and logistics, serving around 14,000 students in over 300 schools.

It also works closely with industries, providing training directly in workplace environments, which strengthens its connection to real-world career paths.

ReadCloud is now debt-free, and the company said it is focusing on expanding internationally, with plans to serve more international schools and deepen its partnerships with industries such as childcare.

 

Weebit Nano (ASX:WBT)

While not one of the top 10 performers this year, Weebit’s share price has still jumped more than 50% in the past six months. 

Weebit is a tech company focused on developing next-generation memory solutions based on its proprietary Resistive RAM (ReRAM) technology. 

ReRAM is a type of non-volatile memory that is seen as a potential alternative to traditional Flash memory and DRAM (Dynamic Random Access Memory). 

The company has made significant strides in advancing this technology, aiming to address the growing demand for faster, more energy-efficient and more durable memory solutions. 

Also read: Weebit Nano’s ReRAM technology primed to shake up booming memory chip market

Weebit’s approach is to leverage ReRAM’s potential to offer lower power consumption, faster read and write speeds and enhanced scalability compared to current memory technologies.

Weebit Nano’s technology is positioned to serve a wide range of applications in industries such as consumer electronics, automotive and industrial automation. 

One of the key selling points of ReRAM is its potential to be integrated into devices with high performance and low energy consumption requirements, such as smartphones, IoT devices and electric vehicles. 

As memory demand grows across these sectors, Weebit Nano is positioning itself in a rapidly expanding market, which, according to the company, could be worth over US$1 trillion.

 

This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decision.

At Stockhead we tell it like it is. While Weebit Nano is a Stockhead advertiser, it did not sponsor this article.

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