Dicker Data vs Megaport: Which ASX tech share has more upside?

Dicker Data vs Megaport shares

Many Aussie investors looking to back tech may consider Dicker Data Ltd (ASX: DDR) or Megaport Ltd (ASX: MP1) for the growth and innovation in their portfolios. While both operate in the broader technology sector, Dicker Data focuses on wholesale IT distribution, while Megaport delivers network and cloud connectivity. If you’re weighing up Dicker Data vs Megaport shares, let’s dig into the key differences, strengths, and opportunities that set these two apart.

The case for Dicker Data

Dicker Data is a well-established IT distributor supplying computer hardware, software, cloud, and related technology products to Aussie and Kiwi businesses. Founded back in 1978, Dicker Data has built a robust client base across Australia and New Zealand, with more than 12,500 customers across Australia and in New Zealand, as of its company profile. The company highlights a hands-on approach, keeping its operations mostly in-house for faster and localised service.

Looking at fundamentals, Dicker Data stands out with:

• P/E Ratio of 25.31, suggesting investors expect reasonable future growth but at a more moderate valuation relative to the sector’s high flyers.
• A fully franked dividend yield of 3.05%, backed up by a strong history of regular, fully franked payouts — something many income-focused investors will appreciate.
• A market cap of $2.72 billion, making it a sizable but not top-heavy player in the Aussie tech landscape.

Dicker Data’s ability to blend growth with income, thanks to persistent profitability and payout history, is a key part of its appeal.

The case for Megaport

Megaport is a global network-as-a-service powerhouse connecting customers across a huge network of over 1,200 data centres is more than 30 countries. Its technology gives businesses nearly instant, flexible connections to top cloud platforms such as AWS, Microsoft Azure, and Google Cloud – all without long-term lock-ins. The company made a big move into AI compute infrastructure in late 2025, acquiring Latitude.sh and adding virtual GPU cloud services, which could drive new growth. Megaport now splits operations into three regional networks and its new Compute division.

Megaport’s fundamentals paint a picture of a high-growth tech story:

• Year to date, shares have rallied 57.7%.
• Market cap is $4.49 billion, making it one of the bigger homegrown tech names on the ASX.
• It doesn’t currently pay a dividend, choosing to reinvest for aggressive expansion.

Investors chasing disruption and global growth might be drawn to Megaport’s scale and reach — but it comes with typical ‘new tech’ risks and volatility.

Valuation comparison

Here’s a clear look at the key valuation differences:

One thing stands out immediately: Dicker Data is turning a profit, paying reliable fully franked dividends, and trading at a P/E that’s still high but far below Megaport’s nosebleed 370.00. Megaport’s negative EPS (-0.218) is inconsistent with its extremely high P/E ratio, likely because its P/E is calculated on underlying or forward earnings — so take that number with a big grain of salt. Dicker Data looks much more mature, while Megaport’s market cap and valuation reflect investor optimism about its potential future earnings.

Recent share price performance

Both companies have enjoyed remarkable share price momentum in 2026, but let’s break it down:

• Dicker Data’s price history (24 Aug–21 Sep 2026) shows steady gains, with a couple of sharp daily jumps, notably a 20.66% surge on 28 August. Overall, shares are up 48.5% year to date.
• Megaport’s price history covers the same date range (24 Aug–21 Sep 2026), with a more dramatic 7.6% gain in one session and a few volatile down days, including an -8.3% stumble. But the stock is up an even stronger 57.7% year to date.

Which is the better buy?

If I’m backing raw upside in tech and don’t mind some bumpiness along the way, my pick would be Megaport. The company’s sky-high valuation (P/E of 370.00, and not yet profitable on a reported basis) means shares are priced on hopes for huge future growth — especially after the AI compute expansion. Its recent price run (+57.7% YTD), global reach, and expansionist energy signal a business chasing big opportunities, not dividends.

But if I want something steadier, with real profits and reliable fully franked income, Dicker Data stands tall. A 3%-plus dividend, a history of payout increases, and a market multiple far below Megaport’s make this a strong contender for those prioritising consistency or tax-effective yield.

In short, I reckon Megaport offers greater potential upside, but Dicker Data gives me solid value and income right now. For pure upside — and a whiff of risk — I’d lean towards Megaport. But both look like worthy, albeit very different, ways to ride the Aussie tech wave.

The post Dicker Data vs Megaport: Which ASX tech share has more upside? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 Megaport. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.