The Australian share market enjoyed a strong day of returns this Tuesday. The All Ordinaries (ASX: XAO) Index has closed up a healthy 0.34% to 8,285.1 points.
But this rising tide did not lift all boats today. So let's talk about three ASX tech stocks that just hit new multi-year lows.
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3 ASX tech stocks that just hit new multi-year lows
First up, we have tech stock Data#3 Ltd (ASX: DTL). Data#3 shares have had a horror year, down more than 25% over the past 12 months. Today has been no different, with this company dropping another 0.32% today to finish at $6.29 a share. That's after Data #3 hit a new 52-week low of $6.24 during intra-day trading.
This is not only a new 52-week low but also the lowest point this company has traded at since late 2022.
Next up, we have DUG Technology Ltd (ASX: DUG). This ASX tech stock and data analysis services company has also had a rough time today, sliding 0.77% lower to $1.29 by market close. That's after Dug stock hit a new 52-week low of $1.25 earlier in the day.
Again, it's been a while since Dug has been at these levels, with the last time we saw this pricing being mid-2023.
Finally, let's talk about ASX tech stock and semiconductor company 4DS Memory Ltd (ASX: 4DS). 4DS Memory had an even more calamitous 2024, with the company now down 45% over the past 12 months. Today alone, this ASX tech stock retreated by a chunky 6.25% to a 52-week low of 4.3 cents before closing at 4.4 cents apiece.
Again, we'd have to travel back to mid-2023 to see the last time 4DS was at the 4-cent levels we are currently seeing.
Time to buy?
Sometimes, bargains are easy to spot on the ASX. Buying quality businesses that have minimal risk of bankruptcy during a stock market crash is a good example. But sometimes, companies fall in value for a good reason. All three of the above ASX tech stocks arguably fall into the latter camp.
Let's start with 4DS. This company cratered more than 25% last month when it abandoned a capital raising program and revealed an expensive partnership with Infineon Technologies. Investors clearly noted the lack of market interest in 4DS' growth plans.
Similarly, it seems Dug Technologies has also lost the faith of some investors over its own capital raising. Dug announced a major capital raising back in October to raise between $30 and $35 million – a substantial amount relative to the company's current market capitalisation of roughly $170 million.
Investors don't usually like stock dilutions on this scale, which seems to be the case here.
Data#3's case is an interesting one. This company has a history of being a volatile investment. But the announcement from major partner Microsoft in December sparked a rush for the exits.
Last month, Microsoft revealed some changes to its partner incentive program (of which Data #3 is part) that will reduce the incentives earned by the company on its Microsoft Enterprise agreements from 1 January 2025.
Data# 3 did reveal that it has implemented various initiatives to mitigate the effects of this, but many investors were still evidently spooked.
Foolish takeaway
In order to view any of these ASX tech stocks as a bargain buy today, you need to have absolute confidence that the market is dead wrong about its assumptions. For example, you would need to come up with a thesis that Dug's capital raisings will lead to turbocharged growth for the company or that Data#3's earnings can survive and thrive under Microsoft's changes.
Knowing when the market is overreacting or merely responding in a rational manner to changing facts on the ground is an essential part of value investing. Tread carefully.
