Zip vs Megaport: Which ASX tech share is the better buy?

Zip vs Megaport Ltd shares: Which should you buy in October?

Are you tossing up between Zip Co Ltd (ASX: ZIP) and Megaport Ltd (ASX: MP1) shares this month? Both have made plenty of headlines, but they’re cut from very different cloths. With one riding the buy-now, pay-later wave, and the other connecting the digital world as a network heavyweight, I’m digging into the numbers and stories behind both to help decide which might be the smarter October buy.

The case for Zip

Zip is a homegrown fintech player best known for providing interest-free buy-now, pay-later (BNPL) services like Zip Pay and Zip Money. From its Aussie origins in 2013, Zip has spread its wings to 12 countries, aiming to shake up the credit card game with digital, flexible payment smarts for both shoppers and merchants. While its ambitions are big, Zip’s focus remains on providing simple alternative finance products at the point of sale.

What stands out from the current figures? First up, Zip’s market cap sits at $2.53 billion. It’s trading on a price-to-earnings (P/E) ratio of 22.30, which suggests the market’s factoring in some earnings growth but not getting carried away like with the more speculative tech darlings. The past year hasn’t been kind, with a hefty year-to-date (YTD) return of -38.6% — that’s a bruising ride for investors. Despite finally posting positive earnings per share (EPS) of $0.091, Zip doesn’t pay a dividend, so no direct income for holders here.

The case for Megaport

Megaport is all about helping businesses connect seamlessly to the global cloud. It operates a network-as-a-service (NaaS) platform, linking more than 1,100 data centres across 31 countries, and plugging customers in with major cloud providers like AWS, Azure, and Google Cloud. Megaport’s rapid, flexible connectivity model lets clients spin up virtual networks on the fly — no long-term contracts needed. Late in 2025, Megaport expanded into AI compute infrastructure with its acquisition of Latitude.sh, adding on-demand GPU cloud services into its growing toolbox. Its business spans the Americas, Asia-Pacific, and EMEA regions, plus an emerging Compute division.

On the numbers, Megaport’s market cap is a much chunkier $4.91 billion. Its P/E ratio is sky-high at 370.00, reflecting its negative EPS of -$0.218 (so the “E” here isn’t positive yet). This suggests the current P/E is calculated on some forecast or underlying basis — which may not line up exactly with the standard historical measure. Worth noting: Megaport’s YTD return is glowing at 75.5%, showing the market’s excitement about its recent momentum and expansion moves. Like Zip, there’s no dividend attached.

Valuation comparison

With both companies firmly in the tech camp but playing very different games, here’s how they stack up on key numbers:

A couple of important notes: Megaport’s P/E ratio is 370.00, but with negative EPS of -0.218. This suggests the P/E is based on a different earnings measure (perhaps forecast or underlying), so the headline figure isn’t quite apples-to-apples with Zip’s standard P/E calculation.

Neither company is paying a dividend, so yields won’t swing your decision.

Recent share price performance

Comparing recent share price activity up to 30 September 2026:

• As of 30 September 2026, Zip closed at $2.03, nudging up just 0.5% for the day.
• Megaport finished at $20.65, rising 0.1% from the previous session.
• Looking at the bigger picture, Zip is down an eye-catching 38.6% year-to-date, while Megaport has surged 75.5% YTD.

So, in terms of share price movement over 2026 so far, Megaport has delivered a major rally, while Zip’s investors have endured a punishing decline.

Which is the better buy?

If I had to pick between the two for October, I’d lean toward Megaport. Megaport has a clear growth runway, building essential infrastructure for cloud and AI adoption worldwide. Yes, its P/E ratio looks steep, especially with reported negative EPS, but its 75.5% YTD share price gain and expansion into AI compute show serious momentum. Zip has finally turned an earnings profit but is still licking its wounds after a harsh share price fall. Neither name pays a dividend, so income isn’t a factor here.

For me, the stronger recent performance, global presence, and future-facing business model tip the scales in Megaport’s favour — even if its valuation looks a touch spicy. If you’re after growth exposure in tech, Megaport would be my pick for October.

The post Zip vs Megaport: Which ASX tech share is the better buy? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Friday
• Bell Potter just put a buy rating on Megaport shares with 33% upside
• Which were the best-performing ASX 200 shares in September?
• How high does Macquarie think Megaport shares will go?

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 Alphabet, Amazon, Megaport, and Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, and Microsoft. 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.