AI is a tailwind for beaten down ASX tech share

Roy Van Keulen | Morningstar

WiseTech’s (ASX: WTC) first-half organic EBITDA grew 7%, driven by 7% organic revenue growth and flat margins. When including the acquired e2open, EBITDA rose 32%, driven by 76% revenue growth, offset by lower margins. Shares jumped 11% as WiseTech plans a 2,000 headcount reduction.

Why it matters

The impact of artificial intelligence dominated the discussion, including a planned 2,000 headcount reduction across customer service and product development by fiscal 2027. This is more than 25% of employees of its current 7,000 employees.

• We expect the headcount reduction to primarily reflect prior plans to reduce headcount at e2open. We believe e2open, with its history of struggles and lay-offs, has long lost its best talent and operates with lower talent density than the WiseTech business.
• The deployment of AI agents in its product suite is accelerating. WiseTech expects agents to cut labor costs for clients by 50% in two years. Together with transaction-based pricing since last year, we therefore view AI as a material tailwind, as WiseTech can instantly monetize improvements.

The bottom line

We maintain our fair value estimate for wide-moat WiseTech of $138. Shares sold off by around 60% over the past six months, as markets have become fearful of AI’s impact on software companies. We disagree in this case and believe shares screen as materially undervalued.

• CargoWise is incredibly comprehensive, following decades of development, meaning it seems highly unlikely to us that competitors can build a direct competitor or build a point solution that is financially viable.
• On top, WiseTech is an order of magnitude larger than its nearest competitors and has around 5,000 employees (post headcount reductions) that will also be using AI to copy any competing solutions and features and build new features to extend WiseTech’s lead.

AI agents a material tailwind for WiseTech

WiseTech’s long-term strategy centers on becoming the operating system for global trade and logistics as the industry digitizes.

We expect the logistics industry to digitize rapidly over the next decade. The logistics industry currently operates with a relatively low level of digitization. However, the market for logistics services naturally selects for the lowest-cost providers and we see digitization as a key driver of cost-savings. We therefore see the process of digitization as inevitable, either through companies adopting digitization to remain competitive or through digital leaders taking market share from the digital laggards.

WiseTech provides logistics companies the technology to digitize. WiseTech’s core product suite, CargoWise, provides the best-in-class software solution for international freight-forwarding by air and ocean, and customs and compliance. We see logistics companies that use the CargoWise international freight-forwarding solution significantly outperforming their peers due to the efficiency and productivity improvements the platform provides. We therefore expect this solution to become the industry default, either through increased customer adoption or through WiseTech’s customers taking market share.

We expect WiseTech to leverage its already dominant position in international freight-forwarding to move into downstream adjacencies, which consist of, in order of functional proximity, road and rail and warehousing. Additionally, with the acquisition of e2open, we also expect WiseTech to move into upstream adjacencies, as it starts servicing beneficial cargo owners with their logistics procurement processes.

Bulls say

• CargoWise’s international freight-forwarding solution is best-in-class and we expect this solution to become the industry-default.
• WiseTech is well placed to leverage CargoWise’s market position in international freight-forwarding into adjacent services such as customs and compliance, rail and road, and warehousing.
• The logistics industry currently operates with a relatively low level of digitization, but we see the process of digitization as largely inevitable.

Bears say

• The logistics industry is still in the early stages of digitizing, meaning there is high uncertainty as to how large the market opportunity will be for WiseTech’s current and future products.
• Following the resignation of founder White from the CEO role and his transition to the board as executive chairman, it is unclear whether the company will have the same level of executive leadership.
• WiseTech’s hasn’t yet incorporated all of its acquisitions into the CargoWise product suite, and the return on those investments could be dilutive if they lack strategic attention.

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All prices and analysis at 26 February 2026.  This information has been prepared by Morningstar Australasia Pty Limited (“Morningstar”) ABN: 95 090 665 544 AFSL: 240 892.). The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.