The coronavirus pandemic has paved the way for hefty discounts across all S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) shares.
The uncertainty around the duration and economic repercussions of the pandemic will continue to be a near-term risk for all investments. However, here are three phenomenal ASX tech plays that represent strong medium to long term investments.
1. Altium Limited (ASX: ALU)
Altium is a household ASX 200 tech name in the electronics design software space for engineers who design printed circuit boards. The company's share price is some 30% off its all-time highs back in February and has shown early signs of consolidation in the past two weeks, around the $27-$28 mark.
China has been a key driver in Altium's growth story, delivering record revenue growth of 27% in the most recent half and continuing to scale. This could be a headwind for Altium's growth given China's circumstances.
Despite the short-term headwinds for Altium, the company has a suite of high-quality clients in a diverse range of sectors from automotive to life sciences. Altium has also launched its Altium 365 platform, providing users with free and paid collaboration, design-sharing and data management.
2. Data#3 Limited (ASX: DTL)
Data#3 is a leading Australian IT professional services firm helping firms maximise the value of their technology investments. The company delivered a strong 1H20 result with revenues growing 11.6% and net profit after tax soaring 41.5%. This growth in profits is attributed to strong growth in software licensing and public cloud revenues, and a decrease in consulting revenue.
The company has largely been able to operate normally. It announced that as of late March, "over 90% of the Data#3 workforce is operational from home". I believe Data#3 is still poised for growth and has a moderate price-to-earnings ratio of 30.
3. Megaport Ltd (ASX: MP1)
The narrative for data centres, cloud and connectivity services remains as strong as ever despite the pandemic. In fact, this is exactly when their services are needed – to speed up your setup and simplify the process of building and deploying connections to the services your business runs on.
Megaport has an ever-growing global ecosystem of installed 'ports' including North America, Asia Pacific and more recently, a launch in Japan – which had the 5th largest global cloud spend in 2019. Despite the uncertainty, I believe that data centres will continue to experience strong demand.
