SYDNEY, Feb 15, 2026, 17:49 AEDT — Market closed.
Xero Ltd slipped 4.45% to A$73.49 by Friday’s close, capping off a tough day for Australia’s software stocks. Trading volume came in around 1.45 million shares, according to ASX figures. 1
This decline stands out: sellers have moved quickly across premium-priced names. The S&P/ASX 200 wrapped up Friday down 1.39%. Information technology stocks were hit harder—off around 5%, MarketIndex data shows. 2
There’s mounting anxiety worldwide over how AI might disrupt subscription software models, and questions are swirling over which companies could feel the pinch first. “With fear driving market sentiment, investors remain in ‘sell first think later’ mode,” Barclays equity strategist Emmanuel Cau told Reuters on Friday. 3
AI investment jitters flowing out of Wall Street played into Friday’s drop, slicing 4.5% off Xero and weighing on other tech stocks, according to a news.com.au piece. Still, Morningstar’s Lochlan Halloway said in his weekly note that Xero and WiseTech have features that might “shield” them from AI negativity. Zerocap’s Emir Ibrahim called out a “broad de-risking move” heading into the weekend. 4
This wasn’t just about Xero. On Friday, WiseTech Global tumbled 10.4% to A$42.62, while TechnologyOne slid 7.1% to A$20.17. According to a TradingView wrap, the words on everyone’s lips: “AI” and “margins.” 5
Jefferies analysts Roger Samuel and Lucy Krimmer labeled the recent slump in Australian software shares as an “indiscriminate” selloff, according to a Feb. 13 note cited by Investing.com. They maintained a “hold” rating on Xero, pointing to elevated AI risk for the company, which they say faces stiffer competition from heavyweight U.S. players like Intuit. On top of that, the analysts warned Xero’s earnings growth might take a near-term hit because of dilution from its acquisition of payments firm Melio. The payments division isn’t expected to hit breakeven before the close of fiscal 2028, they added. 6
In investor lingo, “horizontal” software refers to products that cut across multiple industries instead of drilling into a single vertical. The upside? A wider addressable market. But there’s a catch: you’re more exposed whenever a new tool shows up and claims it can automate core functions.
Xero’s core pitch is cloud accounting for small businesses, and lately it’s been ramping up efforts stateside. The Melio tie-up brings new payments capability into the mix, though for now, short-term figures remain unchanged — and investors aren’t in a forgiving mood when it comes to execution risk at this stage.
But there’s another angle here. Should worries over AI dissipate, software names might rebound sharply; Friday’s slump could just end up as noise. The trouble comes if those fears stick around—and if AI starts driving down prices or eroding customer bases quicker than optimists are betting on.
Traders eyeing the ASX ahead of Monday’s open have their sights set on key macro triggers that could shake up rates—and with them, growth-stock valuations. According to an AMP note cited by ABC, the week’s calendar features the U.S. Federal Reserve’s minutes, Australian wage figures, and a Reserve Bank of New Zealand rate verdict, all landing Wednesday. 7
Xero’s next notable milestone isn’t right around the corner. Investors will have to wait for the FY26 results, set for release May 14, when the company plans to share more detail on Melio and its U.S. numbers. 8
