Stock Pick

Should you just forget ASX tech stocks after the AI selloff?

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A man with his back to the camera holds his hands to his head as he looks to a jagged red line trending sharply downward.

When ASX tech stocks fall 30%, 40%, or even 50% in a relatively short space of time, it’s natural to question the entire sector. Headlines turn negative, volatility spikes, and suddenly long-term growth stories are treated like broken business models.

I don’t think that’s the right conclusion.

In my view, selloffs often create the best long-term opportunities in quality technology stocks. The key is separating speculative hype from businesses that are still executing and expanding their addressable markets.

Here are three ASX tech stocks I’m not giving up on.

Life360 Inc. (ASX: 360)

Life360 is not just another app. It is building a global safety platform with tens of millions of monthly active users.

The company continues to grow both users and paying circles, and it has been steadily improving revenue and profitability metrics. Importantly, management has guided to continued strong monthly active user (MAU) growth in 2026, which tells me demand for its core product remains intact.

What I like most is the recurring subscription model. As more families join the platform and upgrade to paid tiers, revenue visibility improves. Yes, the share price has been volatile, but the underlying metrics still point in the right direction.

For me, that’s not a reason to walk away. It’s a reason to lean in selectively.

Pro Medicus Ltd (ASX: PME)

Pro Medicus provides imaging software to hospitals and healthcare systems, particularly in North America.

The company has continued to win large, long-duration contracts and expand its total addressable market. It also operates with exceptional margins and remains debt-free, which is rare in high-growth tech.

The recent selloff has been more about valuation compression and AI-related fears than operational deterioration. In my view, Pro Medicus’ cloud-native platform and strong customer relationships give it a durable competitive position.

When a high-quality, globally competitive ASX tech stock gets sold down heavily, I pay close attention.

WiseTech Global Ltd (ASX: WTC)

WiseTech has faced a perfect storm over the past year, including slower growth in parts of its core business, board and management upheaval, and broader tech weakness.

But the core product, CargoWise, remains deeply embedded in global logistics networks. Replacing it is not simple or cheap. That stickiness is a competitive advantage.

The ASX tech stock is also rolling out new products, refining its commercial model, and integrating acquisitions. If execution improves and growth re-accelerates, sentiment can shift quickly.

To me, this looks like a business navigating a difficult period, not one that has lost its moat.

Prefer diversification? Consider the ATEC ETF

I completely understand that picking individual ASX tech stocks during a volatile period is not for everyone.

That’s where the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) can make sense. It provides exposure to a basket of leading Australian technology names, including WiseTech, Pro Medicus, and Life360.

Instead of trying to time one specific stock, you gain diversified exposure to the broader sector. If you believe Australian tech can recover and grow over the long term but want to manage single-stock risk, this is a reasonable alternative in my opinion.

Foolish takeaway

Tech selloffs can feel uncomfortable. But in my experience, writing off an entire sector after a downturn is rarely the best strategy.

I’m not walking away from ASX tech stocks. I’m focusing on businesses with real products, recurring revenue, and large global opportunities. Whether through individual names like Life360, Pro Medicus, and WiseTech, or via a diversified option like the ATEC ETF, I still see long-term potential in the sector.

The post Should you just forget ASX tech stocks after the AI selloff? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Life360 and WiseTech Global. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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