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It seems that Australia’s tech stocks are the new cool kids on the investing block.
The so-called WAAAX stocks might be less renowned than the US FAANG (Facebook, Apple, Amazon, Netflix and Google) equivalent, but they’ve been stealing the show on the ASX of late.
Aussie tech companies WiseTech, Altium, Appen, Afterpay and Xero (WAAAX) have more than doubled their share prices in the last two years to beat many analyst’s expectations.
WiseTech, Altium and Xero have jumped around 300 per cent, 400 per cent and 280 per cent respectively during that time, while buy-now-pay-later company AfterPay rose almost 700 per cent.
It’s a trend that Alex Douglas, managing director at forex trader Monex Securities, thinks will continue into the future.
In fact, in an analysis of both the leading US and Australian tech stocks, he said Australia was the standout performer.
“When I was looking to see which ones had the most consistent gains over the last couple of months… It was three of the Australian stocks that kept coming out on top – Appen, Afterpay and Altium,” he told Business Breakfast.
Moving forward, he said the upward momentum of global technology stocks out of Asia and the US should also have a positive effect on the local tech sector.
“Although the Australian ones are having a good run now, the American ones, the FAANGs, are certainly bouncing back quite strongly.”
The FAANG stocks make up some of the biggest technology companies in the world and are listed on the tech-heavy US Nasdaq index, which ended 2018 on a disappointing note.
However, many analysts are expecting a solid comeback in the year ahead. In January alone, the Nasdaq jumped almost 10 per cent, its best month since October 2011.
And despite ongoing fears about the US-China trade war and China’s slowing economy, Douglas says Chinese tech stocks, called the BAT stocks – Baidu, Alibaba and Tencent – are also having a good run.
“In fact, the Chinese market was one of the strongest markets at the start of the year. So, there’s still a lot of interest in that sector as well.”
For more on the WAAAX stocks, watch the video above.