TechnologyOne is the lone bright spot in a brutal year for ASX tech
TechnologyOne is the only large cap ASX tech stock to upgrade earnings on the back of AI, and the market is taking notice.
Source: Shutterstock
Mentioned
KEY POINTS
- Most major ASX tech stocks are down 30-40% year-to-date, but TechnologyOne has clawed its way back into positive territory after upgrading FY26 earnings guidance in February
- Macquarie upgraded TNE to Outperform, noting its low AI disruption risk as a deeply embedded vertical platform serving regulated public sector markets
- The market appears to be rewarding companies with concrete, quantifiable AI earnings impact while punishing those still leaning on vague AI buzzwords
Tech stocks appear to have found a fragile floor after tumbling ~50% from September 2025 highs. The S&P/ASX 200 Tech Index has traded broadly sideways over the past two months, though the price action has largely comprised of two-to-three day relief rallies, followed by an offsetting move lower.
The index is in the midst of a two-day winning streak, up 6%, but is still down 4% over the past five sessions as the sector digested bearish threats including Anthropic's latest Cowork update and new Mythos model.
Most household tech names like Wisetech, Life360, Pro Medicus and Xero remain in deep pain, down 30-40% year-to-date. But one name has managed to buck the trend and return to positive territory in recent weeks.
Before we dive in, here's a list of most major tech stocks and their year-to-date performances.
Ticker | Company | Price | YTD % |
|---|---|---|---|
SDR | Siteminder | $3.15 | -48.61% |
WTC | Wisetech Global | $39.70 | -42.04% |
360 | Life360 | $19.02 | -40.98% |
AD8 | Audinate Group | $2.43 | -40.15% |
PME | Pro Medicus | $136.58 | -38.10% |
MP1 | Megaport | $7.54 | -38.10% |
NXL | Nuix | $1.14 | -37.29% |
XRO | Xero | $75.15 | -34.03% |
DGT | Digico Infrastructure REIT | $1.86 | -33.51% |
OCL | Objective Corporation | $11.34 | -31.48% |
CAT | Catapult Sports | $3.12 | -25.00% |
DTL | Data#3 | $6.93 | -22.74% |
BVS | Bravura Solutions | $2.02 | -21.40% |
WBT | Weebit Nano | $4.03 | -19.50% |
IRE | Iress | $6.92 | -17.42% |
DDR | Dicker Data | $8.87 | -13.85% |
HSN | Hansen Technologies | $4.61 | -12.78% |
PPS | Praemium | $0.70 | -12.33% |
MAQ | Macquarie Technology Group | $67.71 | 1.06% |
TNE | Technology One | $29.05 | 5.39% |
NXT | NextDC | $13.35 | 6.21% |
CDA | Codan | $33.79 | 18.90% |
Year-to-date performance of ASX tech stocks, including select small-to-mid cap names, as at Wednesday 15 April | Source: Market Index
Why TechnologyOne has piqued my interest
Four tech stocks have managed to cling onto positive year-to-date returns:
Macquarie Technology and NextDC are both data centre operators. Despite sitting in positive YTD territory, both had weaker returns relative to most tech peers prior to the "SaaS-pocalypse"
Codan manufactures communications, metal detection and mining technology. The company has recorded a long streak of better-than-expected earnings and guidance upgrades. As much as it is a tech company, it is leveraged to several other themes including defence and gold (via its metal detection hardware)
Then there's TechnologyOne. It's the only large cap tech stock on the market to have upgraded its earnings on the back of AI. On 18 February, TNE lifted its FY26 earnings guidance from 13-17% to 18-20% growth year-on-year.
"This increased guidance is not optimism – it is confidence in our customer pipeline in Australia, New Zealand and the UK. Driving this growth is the momentum of SaaS+, the response to Plus and our excitement in new AI products that will shortly be launched," CEO Ed Chung said in a statement.
The chart below shows how TechnologyOne has performed against other major tech names like Life360, Wisetech and Xero. In the early part of the year, TNE moved broadly in line with peers, falling 28% by 13 February, which was slightly better than most peers that were down around 35%.
TechnologyOne shares rallied 8.2% on the day of the announcement (18 February) and another 5.0% the following session. From there, it was a choppy grind higher at a time when most tech peers continued to trend lower. While there has been some stabilisation in recent weeks, most peers are still down 30-40% year-to-date, while TNE clawed its way back into positive territory.
TechnologyOne (black) vs. Car Group (green), Xero (orange), Seek (grey), Pro Medicus (red), Wisetech (blue) and Life360 (purple) | Source: TradingView
Macquarie's takeaways
Following the earnings update, Macquarie upgraded TNE to Outperform and lifted its target price to $29.00 from $28.20. The analysts highlighted several positives, including:
"We think TechnologyOne has limited AI disruption risk as a deeply-embedded vertical software platform, serving highly regulated public sector markets for core operations."
"In just one HR and Payroll AI feature, TechnologyOne is generating $41,000 a year in value by saving 1,350 hours at a wage of $30/hr."
"Although only recently launched, TechnologyOne's AI features are reportedly already delivering quantifiable customer benefits. For instance, the Property and Rating Technical Assessment feature can reduce development approval timelines by an average of 10–21 working days through the automation of development application assessments."
"TechnologyOne has reported strong initial demand for PLUS, its Gen-AI conversational assistant, with more than 22 deals closed since the product was announced in October 2025."
The bottom line
Across the large cap ASX-listed tech universe, TechnologyOne is the only company to have upgraded its earnings outlook with AI as the stated driver, and this is clearly having a material impact on its share price performance relative to peers.
The thing is, TNE isn't even cheap, trading on a one-year forward PE of 57x versus peers like Wisetech (~54x) and Car Group (22x), and it's not as if the FY26 guidance upgrade shot the lights out.
The market seems to be rewarding any concrete evidence that AI is accelerating earnings, while continuing to punish those that can only offer keywords like "AI transformation" and "amplifies productivity."
