Company Interview / James's "undervalued" stock picks

Key points:

Rapid shift in local interest rate expectations affecting tech, property, and discretionary stocks WiseTech Global (ASX:WTC) viewed as a long-term growth opportunity despite recent setbacks Xero (ASX:XRO), Life360 (ASX:360), and GQG Partners (ASX:GQG) seen as undervalued following recent declines Alibaba (NYSE: BABA) highlighted for international growth potential amid improved business diversification

James Gerrish from Market Matters notes a mixed start to the local market, with shifts in sentiment driven by improved performance on Wall Street and renewed interest in crypto. Gerrish highlights the impact of rapidly changing interest rate expectations, where markets now price a 70% probability of a rate hike in 2026 compared to earlier expectations of cuts. This dramatic swing has impacted rate-sensitive sectors like technology, property, and consumer discretionary. Gerrish suggests opportunities may now exist in these areas, which have underperformed in 2025 and face the potential for stronger performance in 2026.

Addressing technology stocks, Gerrish focuses on WiseTech Global (ASX:WTC), which is hosting a pivotal strategy day following a tough year marked by acquisitions, regulatory investigations, and negative headlines. Despite these challenges, Gerrish contends WiseTech’s business model remains robust, especially after integrating major acquisitions such as the Ito Open deal. He asserts the company’s comprehensive freight forwarding platform and sticky customer base will support long-term growth, viewing the current valuation as attractive. Gerrish also sees potential in Xero (ASX:XRO) and Life360 (ASX:360), noting recent share price weakness but highlighting ongoing growth and favourable risk-reward profiles.

Looking beyond tech, Gerrish mentions recent buying in GQG Partners (ASX:GQG), viewing its defensive tilt and attractive yield as compelling given recent underperformance. Internationally, he points to Alibaba (NYSE: BABA) as a valuable opportunity, noting its evolving business mix and long-term upside as cloud and AI initiatives take hold.