ASX tech shares had a rough FY26.

WiseTech Global Ltd (ASX: WTC) was the worst performer in the entire ASX 200 in FY26, dropping 70% in value.

In May, it handed over its status as the ASX’s largest technology company by market capitalisation to Xero Ltd (ASX: XRO). Xero has itself fallen significantly from its all-time high of $196.52.

Both need a turnaround.

But the path back for these ASX tech shares looks very different for each.

WiseTech: The turnaround is a governance story more than a business story

The crucial thing to understand about WiseTech’s collapse is what did not cause it.

The CargoWise platform remains used by 23 of the world’s top 25 global freight forwarders. Switching costs are so high that customer retention has remained strong throughout the governance turmoil.

Importantly, WiseTech has maintained its FY26 guidance, expecting revenue of US$1.39 billion to US$1.44 billion with EBITDA margins of 40% to 41%.

The business has not broken. What has broken is investor trust in the governance around the business. This has been driven by a series of allegations against founder Richard White, including an AFP investigation into alleged trafficking matters.

Since then, a new Chair has been appointed, which is the first concrete governance action since the Richard White allegations escalated.

For a sustained WiseTech turnaround, the market needs three things: resolution of the legal matters, clear separation between founder influence and board independence, and an FY26 full-year result in August that confirms guidance has been met.

Bell Potter carries a buy rating with a $71.75 price target, noting that, depending on the August result, FY27 forecasts could prove conservative.

JP Morgan, however, downgraded WiseTech to hold with a $40 target following the governance concerns. This serves to illustrate how divided the broker community is on the timing of the recovery.

The business case for WiseTech is not in dispute. The governance case is.

Xero: The turnaround is about valuation and execution for this ASX tech share

Xero’s challenge is different.

There are no governance concerns, no AFP investigations, and no allegations against management.

The FY 2026 result delivered 31% revenue growth to $2.75 billion, with the US business surging 240% on the back of the Melio acquisition.

The reason Xero shares have fallen from their peak is almost entirely about valuation.

At its high, Xero traded at well over 100 times earnings, a multiple that assumed many years of rapid, uninterrupted growth.

As interest rates rose and growth investors rotated into value and resources, the multiple compressed dramatically, even as the underlying business kept delivering.

The turnaround for Xero is therefore simpler but not necessarily faster in practice.

It requires the market to reaccept a premium valuation for a high-growth SaaS business, which in turn requires interest rates to fall, earnings growth to accelerate, and the US expansion to keep demonstrating that FY26’s 240% revenue growth was not a one-off.

On the broker level, Goldman Sachs carries a buy rating on Xero with a $205 price target, implying significant upside at current levels.

Perhaps encouragingly, the company has authorised a NZ$550 million buyback for FY27, a direct signal of management’s confidence in the share price at current levels.

The common thread for these ASX tech shares

Despite their different problems, both stocks share one thing: the market has sold them down in a way that disconnects the share price from the operational reality of each business.

Another article on the Motley Fool AU noted recently that

WiseTech is grappling with rebuilding investor confidence after governance-related uncertainty, while Xero is navigating a broader reassessment of software valuations. In both cases, the recent rally may reflect a shift in sentiment rather than a full reversal of trend.

A turnaround for WiseTech requires governance resolution. A turnaround for Xero requires the market to re-price a business that has kept growing, even as the share price has not.

Both are possible in FY27, but neither is guaranteed.

Foolish Takeaway

WiseTech and Xero are two very different ASX tech shares wearing the same label.

WiseTech needs to fix its governance before the share price can sustainably recover, regardless of how good the CargoWise business actually is. Xero needs the macro environment and its own US execution to align before the market will restore the premium valuation the business arguably deserves.

Patient investors in both stocks are betting that FY27 delivers on those conditions.

It is a reasonable bet, but not a certain one.

The post Two ASX tech shares hinge on rebuilding trust and growth. Here’s how they can turn around appeared first on The Motley Fool Australia.

More reading

• 3 ASX 200 shares I’d buy and hold for life
• How low could WiseTech shares go?
• Why the WiseTech share price is sinking 7% today
• 2 ASX shares tipped to grow 50% or more in the next 12 months
• These ASX tech shares crashed hard. Could they double from here?

Motley Fool contributor Mark Verhoeven 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 WiseTech Global and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX blue-chip shares can be among the best investments due to their economic strength and growth prospects. Some fund managers have outlined why a couple of these businesses have such compelling futures.

There are a number of quality businesses on the ASX that have a record of delivering compounding earnings over time, which is a powerful support for sending the share price higher over the coming years.

Experts from Wilson Asset Management (WAM) have explained why they own two stocks in the WAM Leaders Ltd (ASX: WLE) portfolio, which is a listed investment company (LIC) that generally invests in large caps.

Let’s dive into those two ideas.

Aristocrat Leisure Ltd (ASX: ALL)

The first ASX share WAM highlighted is Aristocrat Leisure, a global casino-machine manufacturer.

The fund manager noted that the share price has performed strongly since releasing its FY26 half-year result in May 2026, which highlighted sustained momentum in gaming operations and a sharpened focus on driving operating leverage.

WAM also highlighted that the company recently held an investor day recently, reiterating its longer-term targets and providing a segment-level pathway to US$1 billion in ‘interactive’ revenue by FY29.

The company’s management outlined plans to leverage artificial intelligence (AI) to drive creativity and efficiency in new product launches.

The WAM investment team revealed that this ASX blue-chip share remains a core holding in the investment portfolio and they see “further upside as management executes its strategy”.

Amcor (ASX: AMC)

Amcor, one of the world’s leading packaging companies in both soft and rigid packaging, was the other large business that was highlighted.

WAM noted that Amcor has faced one of its most difficult input cost environments in recent months, following the rise in oil prices driven by the conflict in the Middle East earlier in the year.

Resin, which is a key input derived from oil, has seen prices fall. WAM believes this should provide working capital relief going into the second half of the calendar year.

The investment team also noted that volumes are recovering from ‘trough’ levels and synergies from the Berry Global acquisition continue to build.

WAM expects these initiatives to drive earnings and free cash flow and help reduce leverage on the company’s balance sheet.

Wilson Asset Management thinks there is a “clear path” to valuation upside from the current Amcor share price, with earnings growth underpinned by the synergy program.

The post 2 leading ASX blue-chip shares experts think are buys appeared first on The Motley Fool Australia.

More reading

• How to build $60,000 in annual passive income from ASX dividend shares
• These ASX shares could generate $10,000 per year in passive income
• Three ASX 200 companies Macquarie says are a buy right now
• With dividends surging, are Amcor shares a good passive income buy today?
• These ASX shares could generate $5,000 per year in passive income

Motley Fool contributor Tristan Harrison 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 positions in and has recommended Amcor Plc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When it comes to looking for outsized gains among ASX shares, it pays to ask the experts.

I’ve had a look through the broker notes published this week and selected three companies that they believe could deliver serious share price gains.

Let’s see who they like.

ResMed Inc (ASX: RMD)

Macquarie this week issued a new research note on ResMed after the company told shareholders it was going to sell its MatrixCare business for $490 million, with the funds to be used, in part, for an accelerated buyback program.

The company said the sale fit with its 2030 strategy, “by focusing on high-growth, scalable opportunities in sleep health, breathing health and connected home-based healthcare”.

Chair Mick Farrell said regarding the sale:

Today’s announcement is about our disciplined approach to portfolio management and our commitment to driving long-term growth. By focusing on areas where we see the greatest opportunity for sleep health innovation and impact, we are strengthening our ability to deliver life-changing health technologies, improve patient outcomes, and create value for our stakeholders.

Macquarie said the sale “offloads a structurally challenged business, improving the group’s growth profile”.

The broker has a 12-month price target of $46.60 on ResMed shares, which would represent a 53.7% gain if achieved.

Bhagwan Marine Ltd (ASX: BWN)

This marine services company hosted brokers at an investor day recently, showing them around two of its divisions on the Brisbane River, Bhagwan Marine Services, and Riverside Industrial Sands.

Analysts from Shaw and Partners attended and said the business looks to be in good shape.

They said:

BWN operates Australia’s largest and most diverse marine fleet, employing more than 1,000 personnel nationwide. BWN’s Queensland Marine Solutions business is … strategically located on the Brisbane River and generates revenue from both contract and spot work. Core activity provides a solid EBITDA base, with fleet utilisation currently around 75%. Higher-margin contract work can lift EBITDA margins to approximately 30%. The business is positioned to benefit from demand associated with the Brisbane Olympics, and management has recently secured several new contracts. Longer term, growth is supported by population expansion and Queensland’s substantial infrastructure pipeline.

Shaw and Partners said competition was relatively limited, with only 3 to 4 meaningful participants in the market.

The broker has a price target of 60 cents on Bhagwan shares, which would represent a 90.5% gain if achieved.

Metro Mining Ltd (ASX: MMI)

Shaw and Partners said this bauxite miner remains on track to hit its full-year guidance of 6.6 to 7.1 million tonnes of bauxite for the year.

The analysts said bauxite prices had firmed from lows earlier this year, and the market remained well supported by strong demand growth from China.

They said:

Metro Mining’s Bauxite Hills project is well placed to supply the growing Chinese market due to the proximity to markets. As a low value product, freight costs make up almost half the cost of delivering bauxite to China.

Shaw and Partners has a $3 target price on Metro Mining shares, which would be an 89.8% gain if achieved.

The company also pays a 5.8% dividend yield.

The post 3 ASX shares which could deliver 53% to 90% gains appeared first on The Motley Fool Australia.

More reading

• Why I’d buy and hold ResMed and TechnologyOne shares with $5,000
• Buy, hold, sell: Goodman Group, Endeavour, Resmed shares
• ResMed’s $490m MatrixCare sale: What it means
• Why these ASX shares could rise 20% to 30%
• Why I want to own these ASX shares brokers rate as buys

Motley Fool contributor Cameron England 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 Macquarie Group and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.