Shares of WiseTech Global Ltd (ASX:WTC) declined 4.6% to A$47.60 on Friday, mirroring a significant downturn across the Australian technology sector. The ASX 200 information technology index dropped 3.3%, reaching its lowest level since 2023 and falling 13% over the past five trading sessions.
AI Enthusiasm Meets Capex Scrutiny
The selloff reflects a shifting investor sentiment toward artificial intelligence. Market participants are increasingly viewing AI not just as a growth catalyst but also as a potential disruptor to certain software and data segments. This reassessment has triggered a broader sector rotation out of technology names.
Analysts point to capital expenditure as a central concern. "Markets have shown little patience for companies announcing bigger spending plans," noted Kyle Rodda, senior market analyst at Capital.com. Investors are critically evaluating whether increased AI-related investments can generate sufficient returns to justify current valuations.
Earnings Season Looms Large
The upcoming earnings season adds another layer of uncertainty. WiseTech is scheduled to release its half-year financial results on February 25. Investors will closely examine the performance of its core CargoWise platform and any commentary on how AI trends are influencing software demand.
While Friday's weakness appeared driven by sector-wide pressures, a sharper global tech slump or a disappointing earnings report from WiseTech could push the stock toward recent lows. Some fund managers, like Atlas Funds Management's Hugh Dive, have identified the stock as a potential rebound candidate, though such plays remain inherently challenging.
