In December, the S&P ASX 200 Info Tech [XIJ] index saw an increase of approximately 8.60%, and throughout the year 2023, it experienced a significant rise of nearly 31%. This was higher than the benchmark ASX 200 [XJO], which had a December growth of over 7% and an overall annual growth of 12%.
ASX tech sector outperforms benchmark by 31%
In 2023, the US NASDAQ index, which is considered a leading indicator for the worldwide technology industry, has experienced a substantial rise of over 44%. Additionally, it saw an increase of approximately 6% in December.
The impressive and unwavering power of the Magnificent Seven – Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla – contributed greatly to the increase in profits.
The introduction of ChatGPT in November 2022 created a surge of enthusiasm for artificial intelligence, which in turn boosted the performance of tech stocks in 2023. This resulted in positive growth for various tech companies, such as those specializing in semiconductors and cloud computing.
Analysts predict that the hype around artificial intelligence will continue in 2024. Additionally, there is hope that central banks are approaching the conclusion of their period of increasing interest rates and might even begin reducing them due to declining inflation. This is expected to further increase interest in growth stocks.
During a press conference in December, Jerome Powell, the chair of the US Federal Reserve, acknowledges that the central bank is aware of the potential risks to the economy if interest rates remain elevated for an extended period.
He informed journalists that they were conscious of the danger of remaining in a situation for too long.
“We are aware of the potential danger and we are dedicated to ensuring that we do not repeat that error.”
Here are the top ASX Tech Winners for December 2023
Link Administration Holdings (ASX:LNK) is a publicly listed company on the Australian Securities Exchange.The troubled superannuation fund and share registry administrator experienced a significant increase in value in December after accepting a takeover offer from Japan’s Mitsubishi UFJ Financial Group (MUFG), which values the company at $1.2 billion.
After reaching an agreement to pay Link shareholders, Japan’s biggest financial conglomerate implemented a scheme of arrangement, offering them a 32.9% premium on the company’s latest closing stock price of $1.70 as of December 15th.
Previously known as Jaxsta, the biggest specialized collection of authorized music credits in the world. Vinyl Group (ASX:VNL) announced in December it had signed a deal worth over $10 millionto purchase The Brag Media, renowned publisher of the well-known Rolling Stone title in Australia and New Zealand.
The deal is being funded by WiseTech Global (ASX:WTC) Richard White, the founder, CEO, and avid musician.
Following his status as a significant shareholder of VNL in June, White has introduced an additional $11 million of financial support through a placement and debt agreement.
Also worth a mention, DroneShield (ASX:DRO)After sharing several positive updates for investors, the company witnessed a significant increase in its stock value. Notably, the company’s cash receipts amounted to approximately $68.8 million by December 5, 2023, exhibiting a substantial 440% growth compared to the previous year.
At the beginning of the month, the company emphasized that it would dedicate December to addressing $10 million worth of a previously agreed upon $34 million backlog. Additionally, the company expresses enthusiasm towards its products and services, as they anticipate a potential revenue pipeline exceeding $400 million due to increasing demand.
The main reason for this is the increasing demand from customers for more advanced drone solutions. The company claims that their newest version of the DroneSentry-C2 product, called “Tactical,” will fulfill these needs.
According to the DRO, DroneSentry-C2 enables field-based operators to effectively monitor and control various portable, moving, and stationary systems within their designated region.
Also Read: Australia’s climate tech ambitions: Can it host COP31 and lead the world?
ASX Tech Losers for December 2023
Software player XPON Technologies (ASX:XPN) In December, it was declared that the UK-based Application Modernisation (AppMod) business of the company had been successfully sold off.Peppermint Innovation, listed on the Australian Securities Exchange (ASX:PIL), .
XPN says the divestment is expected to The company will be able to save approximately $1.3 million per year and can now concentrate on its main Martech business and assess other beneficial opportunities.
Identitii (ASX:ID8) The agreement with HSBC Australia to create and manage a specialized regulatory reporting system has been announced to come to an end on December 31, 2023, and will not be extended.
ID8 has confirmed that they will no longer be using the customized version of the Identitii platform made specifically for HSBC Australia. Additionally, in December, the company announced that it was selling 48% of its Payble shares to OIF Ventures for $1 million. This move is aimed at extending the company’s financial resources until FY25.
According to the company, Payble will be worth $10.5 million after the deal, and ID8 will continue to own a 10% stake.
