Xero share price: This ASX tech giant is surging without jumping on the gen AI bandwagon

Australasian accounting software group Xero delivered an impressive earnings beat thanks to a decidedly old-school tech rule.

, appropriately sees it as a way of balancing growth and earnings, something Xero has struggled with in the past. While the target was presented as an aspiration last year, she surprised investors on Thursday morning by revealing she’d hit it in the year to March 31, thanks to a huge jump in free cash flow.

Xero shares surged more than 9 per cent on Thursday, taking the group’s market value to $20.5 billion, The stock is up 35 per cent in six months.Singh Cassidy says delivering on the rule of 40 target early shows Xero is balancing top and bottom-line growth. But she won’t be a slave to the goal; there will be years or periods where Xero wants to increase investment or go hard at sales growth and may miss that mark.

Xero has used traditional AI for years, Singh Cassidy says, and it drives big efficiency wins for her customers. But she’s resisting the temptation to drop generative AI into every second sentence; while future generations of customers will use generative AI tools, it’s still in the experimental phase for customers and Xero.

Source: News Formal (newsformal.com)

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