Company Interview / Jai's tech stock picks on the ASX and beyond

Key points:

Platform companies with proprietary data and workflow integration, such as WiseTech and Xero, are best placed to benefit from AI Mirchandani views recent tech selloff as creating opportunities for selective investors in Australian tech stocks Transition to transaction-based pricing models and investment in AI are vital indicators of future resilience Zendesk and HubSpot identified as more at risk unless management adapts swiftly

Jai Mirchandani from Elm Responsible Investments highlights a new landscape in the tech sector, emphasising that the impact of artificial intelligence is highly uneven across software companies. Mirchandani points out that while the recent selloff has caused anxiety among investors, there is significant differentiation within the sector. Companies providing just a single utility or edge solution face greater risk of disruption, whereas those with a platform model, proprietary data, and deep integration into customer workflows are better positioned to benefit as AI adoption grows.

According to Mirchandani, names such as WiseTech (ASX:WTC) and Xero (ASX:XRO) stand out domestically for their embedded systems and vast proprietary datasets, echoing the strengths seen globally in firms like Intuit (NASDAQ: INTU) and ServiceNow (NYSE: NOW). Mirchandani singles out WiseTech’s proactive shift to a transaction-based pricing model and substantial AI investment as key indicators of resilience and future upside. In contrast, companies like Zendesk and HubSpot (NYSE: HUBS) may face more significant challenges unless their management teams successfully pivot and invest in AI integration.

Mirchandani sees opportunity in Australian listed tech stocks for selective investors, arguing that the recent market drawdown presents a strong entry point. Companies already investing in AI innovation and capable of monetising new workflows could see substantial gains in the coming years.