The S&P ASX All-Technology Index (ASX:XTX) extended its slide on Wednesday, 25th May, ending the day down a further 2.36%. The Australian tech sector continues to struggle as part of the global volatility being experienced, and the challenges facing many of the world’s largest tech companies have been well publicised. The Nasdaq 100, the US tech index that includes companies such as Amazon (NASDAQ: AMZN), Alphabet (NASDAQ:GOOGL), and Meta Platforms Inc (NASDAQ:FB) and Apple (NASDAQ: AAPL), is down 28.36% in 2022 as of Wednesday’s close.
With this lead from the US, it’s no surprise that Australian tech companies are also under pressure. The ASX All-Technology Index is having an equally tricky start to the year and is down 33.27% so far in 2022.
Notable Falls in the Australian Tech Sector
It may not boast the global brand names of the US; however, the Australian tech sector has some significant players in the domestic market and several companies achieving success overseas. Many of those companies have seen substantial reductions in their market cap since the beginning of 2022.
Some of the largest businesses in this space include REA Group (ASX:REA), the parent company of Realestate.com.au, which is down 36.49% so far this year, and the accounting software company Xero (ASX:XRO), which has fallen 40.18%, online job board and HR company SEEK (ASX:SEK), which has dropped 28.85%, and Carsales.com.au (ASX:CAR) sliding by 24.98%.
Diamonds in the Rough
There have been some notable exceptions. Share registry company Computershare Limited (ASX:CPU) has seen its share price grow by 11.84% as of market close Wednesday. Many analysts are bullish on the impact that rising interest rates will have on the company’s cash flow due to its significant cash holdings.
Top Australian Brokers
Artificial intelligence and chip manufacturer BrainChip (ASX:BRN) has also performed well this year, closing at $1.05 on Wednesday, a gain of 32.91%. Pushpay (ASX:PPH), which provides a donor management system for charities, has gained 6.80% in 2022.
So, while the Australian tech sector is facing a challenging environment, there are still attractive investments to be found in the space. Over the coming months, it will become more apparent whether some of these shares are oversold or if the valuations seen in 2021 were simply unrealistic.