Australia does not have the big-name technology giants — think Facebook, Apple, Amazon, Netflix and Google — that have driven the United States stock market to record highs over the last two years.

Key points: ASX200 tech stocks +20pc this year while Wall Street's Nasdaq is up 9pc

ASX200 tech stocks +20pc this year while Wall Street's Nasdaq is up 9pc Aerial imagery business Nearmap has led the way, tripling in value despite not yet being profitable

Aerial imagery business Nearmap has led the way, tripling in value despite not yet being profitable Some price valuations being driven by fund managers having to buy relatively illiquid stock

But, if you had bet on Australia's biggest publicly listed technology companies in that same period, most likely, you would have done very nicely.

The ASX200 information technology sector has risen by about 20 per cent since the start of the year — together the 11 companies that make up the sector have accrued $10 billion in value for their shareholders.

That is more than double the growth the vastly bigger, tech-centric Nasdaq index has put on in the US this year.

Even more impressively, this comes after it rose by about 25 per cent last year.

The averages are attractive returns, but some individual stock performances have been stellar.

Wisetech is up 54 per cent, Appen 72 per cent, Atlassian (which is listed on the NASDAQ in the US) has more than doubled, Afterpay Touch is up 179 per cent while aerial imagery company Nearmap has tripled in value.

Nearmap flying high

Nearmap's business model is using specially designed cameras in light aircraft to map the ground. The images are much higher quality than what can be achieved via satellite and allows larger areas to be mapped than those created using current drone technology.

Its customer base is diverse; from construction companies keeping an eye on projects to insurance companies who want to assess damage following disasters and governments making planning decisions.

Nearmap's CEO Dr Rob Newman said investors were increasingly confident that Australian technology companies could compete with the world.

"The difference is we are starting to build global companies, so rather than being an Australian company selling to Australians we're now Australian companies that can sell globally," Dr Newman told The Business.

Morgan's equity analyst Andrew Tang said with sub-par growth in other sectors of the share market, investors had turned to technology.

"I think it's pushed investors into looking at other parts of the market for that extra level of growth and you're looking at some of these tech names and they're trading at very high PE's [price-to-earnings ratios] but at the same time, very good levels of growth," Mr Tang said.

Sorry, this video has expired What's driving the boom in Australian technology companies ( Carrington Clarke )

The dotcom boom and bust

In the late 1990s, investors ploughed their money into technology companies and fuelled the American dotcom boom.

"I went through the first dotcom boom, and back then everything with just a hint of internet would see its share price explode," Marc Kennis managing director at Pitt Street Research, told The Business.

That tech boom famously ended in misery for many, after the speculative bubble burst once investors realised many of the companies would never actually make money.

Around $5 trillion worth of investors' money was lost once the final cost was tallied.

But despite many Australian technology companies now on very high multiples, Mr Tang argued it did not appear to be a bubble.

"I do think compared to the dotcom period where there was a lot more froth and where investors were ignoring fundamentals, I think we are at a different stage now where investors are focusing on the fundamentals; the return on equity the quality of the earnings coming through," he said.

However, he warned that some prices looked stretched.

"I think we might see a bit of a pullback given that valuations are a little bit stretched compared to other parts of the market."

Failures

There have been some high-profile Australian technology failures this year.

ASX listed online video producer Big Un went from being the top performing stock on the stock market in 2017 to being placed into administration in 2018 after an investigation by Fairfax.

Software market darling Get Swift has seen its shares fall by over 80 per cent since the start of the year after it was revealed that it had lost materially important contracts.

Pitt Street Research's Marc Kennis said he thinks the biggest risks in the technology sector are in the bigger companies.

"The technology market structure in the ASX, you have very few large cap technology stocks that all of the fund managers have to invest in because of their mandates if they're only investing in Australia and that drives up values."

Dr Rob Newman acknowledged the scarcity of Australian technology companies might be driving up share prices here as investors piled in, but said investments in his company were not speculative.

"We're not valuing the company based on a service that we don't yet supply. We've got real customers, we've got real customers in the US, we've got real customers in New Zealand and we've got real customers in Australia."

Mr Tang said that if people wanted to put their money into Australian technology, they should do their research.

"I think investors are gradually waking up to the fact that you just can't just simply buy these companies based on the belief that contracts are being won, I think investors are wising up to the fact that they need to do a little more homework."