Rudi’s View: Tech Is Back (Ahead Of Tax Loss Selling)

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This story features SITEMINDER LIMITED, and other companies.
For more info SHARE ANALYSIS: SDR
The company is included in ASX300, ALL-ORDS and ALL-TECH

Against a darkening mood for the Australian economy and share market, ASX-listed technology stocks are staging a remarkable comeback, having spent most of the past ten months in the Do Not Touch basket

By Rudi Filapek-Vandyck, Editor

At face value, the direct trigger seems to be a revival in SaaS and software companies in the US where fears about AI disruption have been swiftly dismissed by Workday, Snowflake and the like through the release of much better-than-expected quarterly updates.

The iShares Expanded Tech-Software Sector ETF (IGV) is now up 44% since bottoming in early October last year, and up 29% from April 30th. Some 15% of those gains have been booked within the past two weeks.

One can easily tell from share prices in SiteMinder ((SDR)), Catapult Sports ((CAT)), Pro Medicus ((PME)) and Objective Corp ((OCL)), the local sector is again attracting steady inflows.

For once, shareholders are not complaining when the ASX200 is coloured deep red during Tuesday’s trading session.

That, most definitely, has not been the case very often since August last year.

There’s a local context behind the technology comeback too, one that was yet again highlighted on Monday by a not well-received trading update by car dealerships operator Peter Warren Automotive Holdings ((PWR)).

That update revealed operational momentum is running well below market projections, hence why that share price fell by circa -25% on the day.

The message underneath Peter Warren’s disappointment is not dissimilar from market updates and financial result releases after the February results season: it’s tough out there.

If rising costs in the wake of wars in the Middle East don’t hit your bottom line, then maybe an increasingly anxious consumer will.

Also: The Fair Work Commission (FWC) has just raised the minimum wage rate for modern awards by 4.75%, to take effect from 1 July, covering 2.8m workers across the country.

Now the mainstream media are doing their best to convince Australians the value in housing is poised for decline –by how much nobody knows, but there are some dire forecasts out there– while the financial media are en masse cursing Treasurer Chalmer’s plan to tax growth assets more than conservative investments.

The FNArena Corporate Results Monitor is not painting a rosy picture as financial updates that miss the mark continue to outnumber those that surprise to the upside.

Disappointments do not stem from consumer-oriented businesses only. See also Champion Iron ((CIA)), miner of iron ore, Environmental Group ((EGL)), engineering, and Energy One ((EOL)), trading systems for energy traders, recently.

On FNArena’s assessment, the in between season to date has seen more than 40% of all financial updates disappointing with 33.33% beating and almost 26% in line with expectations.

That 40% is on par with prior in-between seasons of late last year and that of twelve months ago. It also marks the highest percentage since 2018, when we first started including these out-of-season reporters.

As markets have become increasingly more volatile over the past two years, a trend that is likely to reshape general perceptions on risk versus reward, those 40% in ‘misses’ generate plenty of bombshells and booby traps.

Monday’s instant punishment for Peter Warren is by far not the largest Wyle E Coyote drop this year. Shares in Healius ((HLS)), for example, have weakened by -50% over the past three months. Losses for Cochlear ((COH)) and IDP Education ((IEL)) are not far behind.

In contrast, companies such as NextDC ((NXT)) and Infratil ((IFT)) continue to close megacap deals to build new data centre capacity, while others, including Dicker Data ((DDR)), TechnologyOne ((TNE)), Goodman Group ((GMG)) and Pro Medicus, may no longer significantly beat consensus forecasts, their financial updates and guidances are nevertheless positive and believable.

In my humble view, it was always but a matter of time before these high quality AI beneficiaries would land back on the local market’s radar. It seems multiple factors have now lined up to make it happen.

Judging from some of the most recent market updates and prognostications from the likes of Morgan Stanley, some views on the outlook for Australia are now genuinely turning dark-grey from bleaky-bleak prior.

Not something shareholders in, say, Goodman Group, TechOne or Pro Medicus need to lose sleep over. Just saying.

Equally important: investors should expect the market’s AI focus to broaden beyond your typical technology and data centres-related beneficiaries.

The upcoming August results season should be the first when companies will be judged on their AI implementation progress. Concrete results and tangible benefits will be rewarded.

The ‘lack of’ might await punishment if too much money needs to be spend upfront. Arguably, that process has already started.

FNArena’s Corporate Results Monitor: https://fnarena.com/index.php/reporting_season/

In anticipation of this broadening in AI assessments, I have now removed the list of AI beneficiaries from my curated lists on the dedicated All-Weathers section. Soon, AI will be everywhere and in everything.

FNArena’s dedicated GenAi section: https://fnarena.com/index.php/tag/gen-ai/

FNArena’s All-Weathers section: https://fnarena.com/index.php/analysis-data/all-weather-stocks/

The EOFY Dilemma

One of the key questions hanging over the revival in technology and growth stocks is whether the annual reflex of tax loss selling throughout June might still put a dent into the revived up-trend?

With shareholders in no less than 44% of ASX200 companies with a market cap above $3bn still sitting on a net-negative outcome since 1 July last year, the incentive to sell in order to minimise one’s tax burden is most certainly there.

According to the team of Quant analysts at Macquarie, tax minimisers tend to sell out of low momentum stocks (those that do not move) as well as your higher-risk, lower quality, smaller cap stocks.

Traditionally, that trend reverses in July, when smaller cap stocks on more attractive valuations (having weakened in June) become the new go-to market segment.

For investors prepared to play the likely trend and reversal over the two months ahead, Macquarie would suggest being ‘long’ (owning) the likes of:

• Telstra ((TLS))
• Chorus ((CNU))
• TPG Telecom ((TPG))
• The Lottery Corp ((TLC))
• Wesfarmers ((WES))
• Coles Group ((COL))
• Ampol ((ALD))
• Woodside Energy ((WDS))
• ANZ Bank ((ANZ))
• Westpac Bank ((WBC))

These stocks are relatively large in size, have positive momentum supporting their share price or are being perceived as lower-risk.

In contrast, Macquarie thinks the following stocks are likely to face net selling pressure over the next four weeks:

• Tuas ((TUA))
• Light & Wonder ((LNW))
• Tabcorp Holdings ((TAH))
• Domino’s Pizza Enterprises ((DMP))
• Guzman y Gomez ((GYG))
• Web Travel Group ((WEB))
• IDP Education ((IEL))
• Temple & Webster ((TPW))
• Deep Yellow ((DYL))
• Magellan Financial Group ((MFG))

Others on Macquarie’s ‘short’ list for June include CSL ((CSL)), Hub24 ((HUB)), Megaport ((MP1)), Pro Medicus, and Xero ((XRO)).

Assuming tax loss selling does feature in the weeks ahead, this by definition creates a fascinating set-up.

Here’s the dillema: with shares in Pro Medicus up some 31% over the past two weeks, does this mean those shares definitely will be sold to secure those gains or will the current up-trend create doubt about potentially missing out on more?

I cannot wager a definitive answer as I won’t be joining the sellers. But I will be paying close attention, including in July.

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(This story was written on Tuesday, 2nd June 2026. It was published on the day in the form of an email to paying subscribers, and again on Wednesday as a story on the website).

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views are mine and not by association FNArena’s see disclaimer on the website.

In addition, since FNArena runs a Model Portfolio based upon my research on All-Weather Performers it is more than likely that stocks mentioned are included in this Model Portfolio. For all questions about this: contact us via the direct messaging system on the website).

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