Droneshield vs Xero shares: Which tech stock could deliver better growth for 30-somethings?

It’s never been more exciting — or more challenging — to weigh up two standout tech names on the ASX. On one hand, we have Droneshield Ltd (ASX: DRO), a smaller but headline-grabbing defence-tech player. On the other is Xero Ltd (ASX: XRO), the established favourite in cloud-based accounting software. For 30-year-old investors eager to back the next wave of tech-driven growth, choosing between these two can feel like picking your favourite child! I’ll break down how their businesses, financials, valuations, and share price momentum stack up to help you decide which, if any, deserves a place in your growth portfolio.

The case for Droneshield

Droneshield operates at the cutting edge of counter-drone technology. Its AI-powered hardware and software aim to protect people and critical sites from malicious drone use — think government buildings, airports, and military bases. The company sells products like DroneGun and DroneSentry to customers in Australia, the US, and the UK. According to its most recent public description, Droneshield’s solutions are used by government, military, airports, prisons, and major venues.

Looking at fundamentals, a few things stand out:

• Droneshield’s current market cap sits at $1.42 billion, putting it at the smaller end of the tech sector, especially compared to major SaaS peers like Xero.
• The P/E ratio clocks in at a whopping 433.75 — but with negative earnings per share (-$0.033), I’ll flag right up front that this P/E seems to be based on an adjusted or forward metric, as it’s mathematically inconsistent with the negative EPS.
• No dividends are being paid, with a Dividend Yield of 0%. That fits its profile as an early-stage, growth-hungry tech company.

For risk-tolerant investors hoping to back a fast-moving, innovative niche (especially one with plenty of defence sector tailwinds), Droneshield could tick the right boxes. However, its high valuation metrics reflect both its future promise and the market’s hefty expectations.

The case for Xero

Founded in New Zealand, Xero has become a powerhouse in online accounting software, focusing on small to medium businesses globally. It earns revenue through recurring monthly subscriptions and is widely recognised for its user-friendly, cloud-first approach. Xero’s leadership in cloud accounting means it enjoys sticky, high-margin revenue and an established brand.

Drilling into the numbers:

• Xero boasts a much larger market cap at $10.16 billion, reflecting its status as a dominant player in the SaaS landscape.
• Its P/E ratio is 49.87. Like Droneshield, though, the EPS figure is negative (-$0.158), again highlighting some inconsistency between reported earnings and the valuation calculation — the P/E is almost certainly using an adjusted or forward measure.
• Xero doesn’t pay a dividend (Dividend Yield: 0.00%). Its growth strategy leans into reinvestment rather than payouts.

For investors seeking exposure to a global SaaS business with proven growth and a track record of disrupting traditional accounting, Xero remains a leading candidate.

Valuation comparison

Both tech stocks demand steep prices for their growth ambitions — but there’s still daylight between them when you look closer.

Metric	Droneshield	Xero
Market Cap	$1.42 billion	$10.16 billion
P/E Ratio	433.75*	49.87*
Dividend Yield	0.00%	0.00%
Earnings per share (EPS)	-0.033	-0.158
Year to Date Return	-50.3%	-47.6%

*Note: Both companies’ reported P/E ratios may be based on different earnings measures (e.g. underlying or forward earnings) than the negative EPS figures shown, which is why they may appear inconsistent.

Neither stock currently pays a dividend. Both trade at extremely high earnings multiples, although given their negative EPS, it’s worth noting that these are ‘growth story’ valuations rather than stand-alone profitability.

Recent share price momentum

Let’s look at short-term price action up to 13 October 2026:

• As of 13 Oct 2026, Droneshield closed at $1.53. Its year-to-date return is a harsh -50.3%.
• Xero, on the same date, last traded at $59.71 (most recent prior day). Its year-to-date return stands at -47.6%.
• Both have suffered steep falls in 2026, each losing close to half their value in the year to date.
• Neither company is showing positive short-term momentum — recent trading has been volatile and predominantly negative.

Which is the better buy?

For a 30-year-old ASX investor chasing growth, picking between Droneshield and Xero right now is tough — both have huge addressable markets, disruptive tech, and (frankly) battered share prices after a tough 2026.

If I absolutely had to choose for a multi-year growth seat, my pick would be Xero. Here’s why: Xero enjoys an entrenched global customer base and a proven SaaS model, while Droneshield, though exciting and operating in a hot defence-tech space, is much smaller and still unprofitable. Both share prices have been under the pump lately, but Xero’s scale and recurring revenue stream, plus its industry leadership in cloud accounting, give me greater confidence it can weather volatile periods and recapture long-term growth. Droneshield could certainly deliver massive returns if everything goes right — but for someone in their thirties looking to back growth with a bit less risk, I’d lean toward the blue-chip disruptor over the small-cap spec play.

The post Droneshield vs Xero: Which ASX tech stock is the better buy for a young growth investor? 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 DroneShield and Xero. The Motley Fool Australia has positions in and has recommended Xero. 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.

The DigiCo Infrastructure REIT (ASX: DGT) share price is in focus after the company secured a 15-year, 71MW contract at its SYD1 data centre and reaffirmed its FY27 EBITDA guidance.

What did DigiCo Infrastructure REIT report?

• 15-year contract for 71MW at SYD1 signed with a global technology firm backed by investment grade credit
• SYD1 now 100% contracted across 88MW of total capacity
• Weighted average lease expiry extended to over 10 years; annual rent escalations average 3%
• Design & Construct contract finalised for SYD1 52MW expansion, fully funded with no new equity needed
• FY27 underlying EBITDA guidance reaffirmed at $120–125 million

What else do investors need to know?

The recently inked SYD1 contract includes reallocating 20MW of previously leased capacity to the new customer. The remaining 17MW of SYD1’s capacity is leased to co-location customers, with renewal rental growth averaging around 8% since DigiCo’s IPO.

DigiCo has locked in a fixed-price design and construction deal for the ongoing expansion at SYD1, which remains on track and fully funded through existing liquidity and asset sale proceeds. The first 10MW of this expanded capacity is expected to be operational and generating income in late Q4 FY27, with the balance delivered in FY28.

What did DigiCo Infrastructure REIT management say?

Simon Mitchell, Co-Head and Chief Financial Officer of DGT, said:

Execution of the 71MW contract at SYD1 is a key milestone for DGT, taking the site to 100% contracted across 88MW of total capacity. The 15-year agreement with a global technology firm provides long-term earnings visibility, supported by investment grade credit backing. It validates the quality of our infrastructure and strengthens the quality of cashflows from our portfolio. When we acquired SYD1, our business plan was to fully lease and develop the site to 88MW over five years, and we now expect to reach that milestone well ahead of our original plan.

What’s next for DigiCo Infrastructure REIT?

DigiCo says its strategy is to steadily grow contracted capacity through the delivery of the SYD1 and ADL1 expansions. Together, these projects are expected to underpin DigiCo’s pathway to around $250 million in annual Australian Platform Stabilised EBITDA once fully operational.

Management reaffirmed FY27 EBITDA guidance, noting the expansion is fully funded and on schedule, with staged delivery designed to meet customer requirements. No new equity capital is required for current growth plans.

DigiCo Infrastructure REIT share price snapshot

Over the past 12 months, DigiCo Infrastructure shares have declined 32%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 3% over the same period.

View Original Announcement

The post DigiCo Infrastructure REIT locks in major SYD1 contract and reaffirms guidance 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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 summary of the company announcement. 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.

DroneShield Ltd (ASX: DRO) shares have fallen further into the red on Thursday.

In Thursday morning trade, the shares hit a 52-week low of $1.42, down 4%. At the time of writing, the shares are trading at $1.44, down 3.37%.

The counter-drone operator’s shares have now crashed by 57% so far in 2026. They’re also down a huge 72% compared to this time last year.

Just a year ago, DroneShield shares were riding a wave of booming investor interest. But in late 2025 and into early 2026, they turned a corner and have been mostly tumbling ever since.

What happened to DroneShield shares?

DroneShield shares started the year strong amid a surge in conflict in the Middle East. During this time, governments around the world hiked their defence budgets.

But investors soon started to shy away from the technology stock following concerns that its growth prospects are out of kilter with its share price growth.

The share sell-off accelerated in May when DroneShield announced that it is being investigated by the Australian Securities and Investments Commission (ASIC).

ASIC’s investigation is ongoing and relates to market announcements and share trading in November 2025.

Sentiment slumped even further when the company posted a disappointing first-half FY26 result in August.

DroneShield posted a 74% increase in revenue for the six months ending 30th of June, and a 229% increase in recurring revenue. 

But the company also reported a statutory net loss after tax of $32.2 million, compared with a $2.1 million profit a year earlier. 

Meanwhile, underlying EBITDA also came in at a $12.4 million loss, compared with an $8 million profit posted in the first half of FY25.

DroneShield’s revenue came in line with guidance expectations. But recurring revenue was a miss, at $11.5 million versus guidance of $14.2 million for the six-month period. And investors weren’t impressed.

The share price was further depressed by news of DroneShield’s newly appointed chief financial officer, Rebecca Lowde, and new non-executive director, Lynne Saint. It’s not uncommon for investors to sell up on leadership changes because it implies potential for new uncertainties.

Even news last month that DroneShield’s revenue is on track with FY26 guidance wasn’t enough to reignite investor confidence.

What should I do with my shares now? Sell up, or wait and hold?

It looks like the experts are divided. TradingView data shows that, of four analysts, two have a strong buy rating, one has a hold rating, and one has a strong sell rating. 

The average $2.01 target price implies a potential 40% upside over the next 12 months, at the time of writing. And some are even more optimistic that the shares have the potential to climb another 81% to $2.60 a piece.

And my view?

The ASIC investigation is concerning, and I think the share price did run too far earlier this year. But DroneShield is still continuing to generate new contracts, and a new leadership change might be exactly what the business needs to move into the next stage of growth.

I’d wait and hold for now.

The post Down another 4% to a 52-week low. What should I do with my DroneShield shares now? appeared first on The Motley Fool Australia.

More reading

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• Could the DroneShield share price reach $2 in 2027?
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Motley Fool contributor Samantha Menzies 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 DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.