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Xero Ltd (XRO)

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Question asked 28/03/2026

Xero Ltd (XRO)

Dear James and Team I have been a subscriber for many years and respect your views and strategy on the market This week you topped up on Xero . I agree with you that this is a quality business and on a risk/reward basis could well be higher in 12 months time ( along with many other software companies ) What was your trigger to top up now ? I am not questioning your judgement but just trying to understand your process Was your decision based on a price point , or some other factors For the record I do own Xero and will top up at some stage , but not until I see some evidence of price appreciation above the moving averages I look forward to your comments Many thanks David

Answer

Hi David,

Firstly, many thanks for being a loyal customer, much appreciated by all at MM.

This is a well-timed question and one we debated this week on a couple of levels:

As we discussed in the Macro Monday Report we had been “looking for a low” this week hence the logic to take some profit in Whitehaven Coal (WHC) and increase exposure elsewhere across the MM Active Growth Portfolio.
Technically we have been looking for a new 2026 low by the ASX200 Software Sector which was achieved this week – a tick for the likes of WiseTech (ASX:WTC), Xero (ASX:XRO), Technology One (ASX:TNE) & Co.
However, we have also been looking for the US Software names to make fresh 2026 lows following weakness on Tuesday night, after a new release from Claude revived fears that AI will make some software uses obsolete, this index remained ~6% above its 2026 low.

As Meatloaf sang, “Two out of threes not bad” and we opted to add to our XRO position based on this wider view of the sector. We may get one more US led AI Disruption washout across the ASX names, but we believe the sector “is looking for a low” and will be trading higher come June 30th.

NB Shawn Trading Ideas also bought WiseTech Global (ASX:WTC) when it dipped under $40.

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Xero Ltd (XRO) v ASX200 Software Index

LAST UPDATED 25/03/2026 12:15

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