Why Australian tech stocks are gaining ground

While finance and resource companies traditionally dominate the ASX, tech stocks increasingly stand out and expand their global reach.

S&P/ASX200 Rallies

Australia’s leading share market index, the S&P/ASX200, has hit fresh highs over the past year.

This follows strong performances from major constituents, such as the Commonwealth Bank of Australia and Wesfarmers.

The index demonstrates how Australia's largest companies have remained resilient with a historical average annual return of 3.98% (excluding dividends).

As data from TradingView indicates, more Australian investors are shifting focus from mining and currency plays to software and cloud-driven firms poised for a bullish run.

The S&P/ASX 200 has continued to push higher throughout the year, driven by a surge in capital inflows and a resilient mining sector.

Another factor behind the S&P/ASX 200's rise is the Reserve Bank of Australia’s (RBA) decision to hold rates steady, which has lowered bond yields.

The result is an increase in attention towards high-multiple stocks with global-scale appeal.

At the current trading value of 9030.0 points, the S&P/ASX200 is up 14.01% in the last 6 months, 10.67% year-to-date (YTD), and 46.26% in the previous 5 years.

The 52-week trading range is 7,200.0 - 9,100.0 points, indicating strong growth this year (S&P/ASX200 Chart on TradingView).

Why Confidence is Rising Again

Risk appetite for tech names has clearly returned to the Australian stock market. This is not isolated, but the result of several factors, including:

● Monetary Policy

The RBA has cut interest rates three times in 2025, with the last cut in July being a 25-basis-point reduction to 3.60%. Since then, Australia’s apex bank has kept rates steady. This has lowered borrowing costs and bond yields, and improved the return outlook for growth stocks.

● China’s Economic Performance

Australia’s tech sector indirectly benefits from China’s economic performance, and that’s another reason why the ASX grew stronger in October.

China reported better-than-expected GDP growth of 4.8% in the third quarter compared to the same period a year earlier. This boosts Australian commodity prices and the overall ASX< making the local market buoyant.

When that happens, investors with enhanced risk appetites increase their flows toward high-growth tech companies, especially those in logistics, supply chain software, and enterprise services serving the Asian market.

● Hedging and Diversification

Australian investors have moved from heavy exposure to forex speculation and mining stocks toward tech stocks.

This is mainly due to the potential for longer-term compounding growth.

Modern companies rely on cloud technology, digital payment systems, and enterprise software, creating a new generation of assets that command the same loyalty as miners and commodities did in local markets.

Investors also turn to tech stocks to diversify and hedge against global volatility. Aussie tech stocks offer exposure to global digital trends and a degree of insulation thanks to local governance.

It is more efficient for many younger investors to balance their portfolios with tech stocks than with high-risk exposure in the forex market.

● Increased Younger Investors’ Participation

One of the top trends shaping Australia’s investment markets in 2025 is the growing presence of younger investors. Many millennials and Gen Zs are exploring self-directed investing, primarily through exchange-traded funds (ETFs). They are mostly attracted to tech and ESG-driven (Environmental, Social, and Governance) enterprises.

The Top ASX Tech Stocks in 2025

The S&P/ASX200 tracks the shares of Australia’s top 200 companies. These stocks offer exposure to high volatility and rapid growth. The top five performing ASX tech stocks in 2025 are:

● WiseTech Global (ASX:WTC): Sitting atop the ASX tech sector, WTC is up 5.46% in the past 6 months. CargoWise, its flagship product, dominates global logistics and benefits from the supply chain recovery. WiseTech reported a 17% increase in full-year revenue, reaching AUD 980 million. The operating profit is forecast to grow between 44% to 53%.

● Technology One (ASX:TNE): As of H2 2025, TNE has increased by 36.60% over the past six months, with a market capitalisation of AUD 12.92 billion. With its consistent double-digit earnings growth, TNE maintains its status as a mid-cap Software-as-a-Service (SaaS) favourite. The company also has a dependable recurring revenue model, which has led to its latest earnings achieving a 13% growth in after-tax profit.

● Pro Medicus (ASX:PME): Pro Medicus is a standout healthcare technology company with a global presence that offers radiology imaging software solutions. With a market capitalisation of AUD 30.10 billion, PME has increased by 36.07% in the last six months. In October 2025, PME demonstrated strong investor sentiment, as its share price increased by approximately 20% over the preceding 12 months, outperforming most healthcare tech stocks.

● Xero Limited (ASX:XRO): After two volatile years of restructuring, Xero is remerging as a growth leader, especially in the United Kingdom and North American markets. With a market capitalisation of AUD 25.57 billion, XRO has decreased by 7.04% YTD and 2.58% in the last 6 months. XRO has an annual revenue of AUD 1.86 billion, marking a 15% year-on-year (YoY) increase.

● Life360 (ASX:360): 360 has become one of the highest-momentum tech stocks in Q4 2025. 360’s family-safety app posted a 44% YoY quarterly revenue growth, primarily driven by increased subscriptions in the United States. With a market capitalisation of AUD 10.71 billion, 360 is up 128% in the last 6 months and 106.87%.

Tech Sector Gains Investor Confidence

The shift in the Australian tech sector in 2025 reflects investors’ confidence in the economy. Despite slow periods this year, the tech market has reached new highs, driving the ASX to new records. Although several global factors, like the US tariffs and new trade deals, continue to influence the market, investors are finding safer alternatives in the tech sector.