US$10 billion was just wiped from the value of Atlassian. How are ASX 200 tech shares responding?

Atlassian got sent to the cleaners last night…

| More on:
Investor looking at falling ASX share price on computer screen

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • ASX tech shares are having a shaky day today
  • Could this be Atlassian's fault?
  • The US tech giant did disappoint investors mightily last night

Atlassian Corp (NASDAQ: TEAM) may be the most famous Australian company that isn't listed in Australia. Sure, the names of its founders and co-CEOs, Mike Cannon-Brookes and Scott Farquhar, may be household names in the ASX investor community at least.

That's been helped in recent times by Cannon-Brookes' ongoing moving and shaking at AGL Energy Limited (ASX: AGL). But Atlassian is, for all intents and purposes, an American company. It's listed solely on the US NASDAQ exchange after all, with no ASX presence.

But even so, Atlassian could be having an outsized impact on ASX tech shares today.

This tech company has just had a shocker over on the US markets. Atlassian shares last closed at US$174.17 each. But that was during normal trading hours. Its after-hours performance was far bleaker. In after-hours trading, Atlassian shares were down a horrible 22.6% to just UD$134.73. That would be a loss of close to US$10 billion in market capitalisation. Ouch.

The catalyst for this precipitous drop appears to be a quarterly earnings update the company put out after the close of last night's US trading session.

Atlassian shares smashed on less-than-rosy outlook

Atlassian reported US$807.4 million in revenues for the three months to 30 September, up 31%. Gross profits also rose from US517.77 million to US$668 million. However, operating income fell from US$165.43 million to US$147.9 million.

But perhaps investors were more spooked about what Atlassian had to say about its outlook:

Last quarter, we shared that we saw a decrease in the rate of free instances converting to paid plans. That trend became more pronounced in Q1. This quarter, we started seeing a slowing in the rate of paid user growth from existing customers.

The above two trends are the result of companies tightening their belts and slowing their pace of hiring. In other words, Atlassian is not immune to broader macro impacts. Our outlook assumes these trends will persist

Whatever the reasons, it is clear that investors were pretty put off by what Atlassian had to say.

So this could be why we are seeing some big gyrations in ASX tech shares today. As an Australian-run US tech company, Atlassian could be described as something of a north star for our own ASX tech shares.

Thus, it's perhaps no surprise that we saw companies like Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) get a pounding this morning. WiseTech was down by 2.2% at one stage, while Xero had lost 1.35%.

Both of these companies have since recovered. But even now, Hub24 Ltd (ASX: HUB) and Pro Medicus Ltd (ASX: PME) are down by 3.8% and 2.9%, respectively.

Perhaps Atlassian is to blame.

Should you invest $1,000 in Hub24 Limited right now?

Before you buy Hub24 Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Hub24 Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

Motley Fool contributor Sebastian Bowen has positions in Atlassian. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Atlassian, Hub24 Ltd, Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Hub24 Ltd, Pro Medicus Ltd., 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.

More on Technology Shares

Kid putting a coin in a piggy bank.
Technology Shares

Why I think this ASX small-cap stock is a bargain at $2.70

This small business has a big future, in my view.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Technology Shares

Broker says this world class ASX 200 tech stock can rise 20%

This tech stock could be heading higher from here according to analysts.

Read more »

Woman and man calculating a dividend yield.
Share Market News

Why did ASX 200 tech shares tank 12% while utilities stocks rose strongly last week?

There was market turbulence in the final week of earnings season.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Earnings Results

Life360 share price jumps 11% on impressive FY24 results

This high-flying tech stock has delivered another strong result today.

Read more »

Scared, wide-eyed man in pink t-shirt with hands covering mouth
Technology Shares

Is it game over for the Brainchip share price?

Will the ASX soon lose its most notorious meme stock? Let's dig deeper into things.

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Technology Shares

3 of the best ASX tech shares to buy in March

Analysts have picked out three stocks with enormous potential to buy.

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

$10,000 invested in this ASX 200 tech stock just 7 weeks ago is already worth $17,040!

The ASX 200 tech stock engineered a huge turnaround in January. Did you buy any shares?

Read more »

A man looking at his laptop and thinking.
Technology Shares

Up 100% from its 12-month low, is there any value left in this ASX technology stock?

An expert thinks this stock's epic run has left its shares looking expensive.

Read more »