A select handful of tech stocks appear to have bathed in a strong updraft courtesy of a bounce on the Nasdaq, up 546.95 points, or 5.3% which rallied on revelations that Netflix had added more than twice as many new subscribers as expected in the last quarter.
While the ASX 200 information technology index (INDEXASX: XIJ) closed 4.19% higher yesterday, the past 12 months have not been kind to the index, down -37.25%.
On a year-to-date (YTD) basis, the benchmark index has dropped -33.32%.
Investors should note that high-growth stocks in the tech sector, especially those with negative earnings (aka long duration stocks), have been key casualties of higher interest rates.
Despite the sector at large trading relatively flat, some microstocks within the tech sector captured the market’s imagination today with double-digit share price growth at noon.
ASX-listed microcaps tech stocks up over 10% today included:
Software technology company Bill Identity (ASX: BID), up 15%
Software as a Service ('SaaS') Simble Solutions (ASX: SIS), up 22%
Drone-based data service and technology company Delta Drone (ASX: DLT), up 15%
Software and mobile app development company Douugh Ltd (ASX: DOU), up 10%
Engineering design and development services company Hyrdix Ltd (ASX: HYD), up 10%
Tech stocks at the larger end of the sector also benefitted from the Nasdaq-inspired uptick today:
Audinate (ASX: AD8), up 5%
Technology One (ASX: TNE), up 1.2%
Altium (ASX: ALU), up 1.78%
Computershare (ASX: CPU), up 0.34%
After jumping 19% on Tuesday, seemingly on radio silence, battery technology and materials company and S&P/ASX300 stock Novonix (ASX: NVX) entered a trading halt today ahead of news of a "material funding arrangement".
Revelations of a pending capital raising follow a red flag being raised by auditors over "material uncertainty" of the company's ability to finance its ongoing growth.
The tech company’s share price is down -64% over 12 months after posting a -$71m loss and -$40m of cash outflows for FY22.
News from Novonix has been minimal since US-based diversified energy manufacturing and logistics company, Phillips 66 (NYSE: PSX) became a major investor in the company in September of 2021, when it acquired a 16% stake in the business.
Early September, Morgans retained a Hold rating on Novonix (target price $2.11) after concluding the company lacked stock-specific catalysts.
Large increases in operating costs resulted in the company posting a significantly higher FY22 net loss.
At the full year FY22 return on equity (ROE) and return on capital employed (ROCE) were both north of -20%.
Free cash flow (ex-dividends) was -$155.8m.
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