Why ASX tech shares still deserve a place in your portfolio in 2026

I think it is fair to say that ASX tech shares have had a rough ride lately.

Concerns about artificial intelligence (AI) disruption, stretched valuations, and shifting competitive dynamics have led to sharp selloffs across the sector. Some investors are wondering whether the golden era of tech investing is over.

I would argue the opposite. The easy gains may be gone. But the long-term opportunity is far from finished.

Tech is infrastructure now

Technology is no longer a niche sector. It is the backbone of modern business.

Companies rely on cloud software, data analytics, cybersecurity, and automation to operate efficiently. Governments depend on digital systems. Consumers live increasingly online.

Take WiseTech Global Ltd (ASX: WTC). Its CargoWise platform underpins global logistics operations. Switching costs are high, integration is complex, and customers depend on it to manage trade flows. That kind of embedded software is not easily replaced.

Or look at TechnologyOne Ltd (ASX: TNE). It provides mission-critical software to governments and universities. These are long-term contracts with high retention rates, not speculative consumer apps.

These businesses are not optional add-ons. They are operational foundations.

AI disruption cuts both ways

There is no denying that artificial intelligence is changing the landscape.

Some fear it could lower barriers to entry and compress margins. But AI can also strengthen leading platforms, improve productivity, and create entirely new revenue streams.

Companies with scale, data, and established customer bases are often better positioned to harness AI than smaller competitors.

When releasing its half-year results this week, WiseTech CEO, Zubin Appoo, said:

We continue on our deliberate AI transformation journey. AI is strengthening our advantage, enabling significantly more automation and value for our customers, embedding our products more deeply into their daily operations, and unlocking levels of efficiency gains across WiseTech that were previously out of reach.

The winners are likely to be those that integrate AI into existing ecosystems rather than those starting from scratch.

Volatility creates opportunity

ASX tech shares tend to trade on long-term growth expectations. When sentiment shifts, valuations can fall quickly.

For patient investors, that can create entry points.

Consider Xero Ltd (ASX: XRO). While its share price has been volatile, the business continues to expand internationally and deepen its product suite. If subscriber growth and monetisation remain strong, earnings power over the next decade could look very different from today.

Foolish takeaway

Digital transformation is not complete. Nor are automation and cloud adoption.

Technology will likely play an even larger role in the global economy in five to ten years than it does today.

As a result, I think there’s still a strong case for holding ASX tech shares in a portfolio right now.

The post Why ASX tech shares still deserve a place in your portfolio in 2026 appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Are WiseTech shares a buy, hold or sell after announcing 2,000 job cuts?
• The easiest way to get rich and retire a millionaire with ASX shares
• Here are the top 10 ASX 200 shares today
• 3 beaten-down ASX 200 stocks tipped to rocket over 100% higher 

Motley Fool contributor James Mickleboro has positions in Technology One, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.