Xero (XRO) has charged out of the blocks this morning, trading above $81 for the first time since mid-March. Theres no specific company news but US software stocks are staging a resurgence with global rival Intuit (QuickBooks) leading the line gaining more than 6% overnight, taking its recovery this week to almost 15%.
After plunging ~65% over the last 9-months there’s plenty of room for XRO to bounce although it will need to demonstrate that AI is more of a benefit than a disruption before it’s likely to scale the dizzy heights and valuations of 2025.
- We are initially targeting the $90 area for XRO, another ~10% higher.
Other major software stocks are following suit this morning with WiseTech (WTC) also strong this morning in a soft market. We believe the software stocks will continue to outperform at least over the coming weeks/months.
MM is long and bullish towards Xero Ltd (XRO) ~$80
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