Why did ASX tech shares soar 9% this week?
ASX tech shares have certainly come in for an impressive landing on Friday.
The S&P/ASX 200 Information Technology Index (ASX: XIJ) screamed 8.65% higher this week, and this impressive surge was driven by home-grown factors rather than Wall Street.
Indeed, the Nasdaq Composite Index (NASDAQ: .IXIC) has barely moved by comparison. The Nasdaq is down 0.07% after four trading sessions with one more to go on Friday night.
In the meantime, ASX tech shares investors are popping the champagne on Friday after a stellar week.
The S&P/ASX 200 Index (ASX: XJO) rose by 0.76% to finish the week at 8,023.9 points.
Here's why the Aussie tech sector outperformed its international peers this week.
Why did ASX tech shares kick the Nasdaq's butt this week?
It was a case of the major ASX tech companies dragging the index higher this week.
Given their large market capitalisations, it's common to see the big players of a market sector push the index higher when they perform especially well.
Our prime example this week is WiseTech Global Ltd (ASX: WTC) shares, which rose by 29.37% this week.
Yep, in just one week.
Wisetech is the biggest company by value in the ASX tech sector. So, when its market cap increases by almost a third in five days, you can bet that's going to move the entire index.
Wisetech shares skyrocketed after the company delivered a scorching hot full-year FY24 report on Wednesday.
The company revealed a 28% increase in total revenue to $1.04 billion and a 28% lift in earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $496 million.
Its underlying net profit after tax (NPAT) for FY24 was $284 million, up 15% year over year.
Investors went crazy and the Wisetech share price finished the day 18.41% higher on the exuberance. The momentum continued over the next two days and the Wisetech share price closed the week at $120.14.
The No. 2 market cap player among ASX tech shares, Xero Ltd (ASX: XRO) had a decent week with a 1.17% lift in its share price to $143.23 on Friday.
Xero held its annual general meeting on Thursday, where chair David Thodey discussed the $100 billion opportunity available to the company.
The third-largest ASX tech share, Nextdc Ltd (ASX: NXT), also had a solid week with its share price rising 2.49% to close at $17.72 on Friday. There was no news from the company this week.
TechnologyOne Ltd (ASX: TNE) shares rose strongly by 3.47% over the week to $23.28 apiece. This was despite no price-sensitive news this week.
The TechnologyOne share price hit a new all-time record high of $23.32 on Friday.
ASX tech share darling Life360 Inc (ASX: 360) put in another strong showing this week. The Life360 share price rose by 6.26% to finish the week at $19.36. It also cracked a new record high on Thursday at $19.49.
The sixth-biggest ASX tech share also had a hand in pushing the tech index higher this week. The Codan Ltd (ASX: CDA) share price rose by 15.99% to finish at $14.87 on Friday.
Foolish takeaway
So, ASX tech shares experienced a remarkable uplift this week mainly because the sector's No. 1 company gained almost 30% in value in five days.
The sector's next five biggest companies also produced share price gains this week. Collectively, this dragged the information technology index substantially higher.
It's worth mentioning, though, that a number of small-cap ASX tech shares also had a great week.
For example, Appen Ltd (ASX: APX) shares rose by 30.84% to close at $1.40 on Friday. The Appen share price has risen by more than 200% over the past four weeks.
Appen did not release any company news this week. The only price-sensitive announcement was its response to the ASX's query on its rapid price rise last week!
The post Why did ASX tech shares soar 9% this week? appeared first on The Motley Fool Australia.
Motley Fool contributor Bronwyn Allen has positions in Appen. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Appen, Life360, Technology One, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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