The ASX tech sector is still relatively small compared to the much larger US market, which is home to tech giants such as Google and Facebook. However, there is a fast-growing base of high-quality companies now listed on the ASX.
Here are 2 of my top ASX tech share picks right now.
Audinate Group Ltd (ASX: AD8)
Audinate's audio networking solutions are used in the production of a range of professional audio equipment, including microphones, speakers, amplifiers and mixers, via the company's core technology Dante.
These networking solutions improve audio quality by converting audio signals into digital data which can then be more easily distributed via computer networks using ethernet or fibre optic cables. This also reduces the need for extra cabling and installation.
Audinate generates revenue from sales to original equipment manufacturers as well as from royalties and software licensing fees. It has seen strong revenue and profit growth over the past few years.
The company's Dante solution currently dominates the audio networking solutions market, creating a very powerful competitive moat to combat growing competition.
In a recent update, the company revealed that it remains relatively well-positioned to navigate through current economic headwinds with $30.9 million cash on hand and a strong balance sheet. It was also able to deliver solid revenue growth in the March quarter.
While there could be a drop in revenues in the short term due to reduced demand from core markets such as live concerts, theatre, and sports, the long-term outlook for Audinate remains very solid in my view.
With only a small proportion of the audio networking market currently using digital solutions, Audinate appears to have huge growth potential over the next 5 to 10 years.
WiseTech Global Ltd (ASX: WTC)
Early on in the coronavirus crisis, WiseTech's supply chains related to the Chinese market were significantly impacted. This resulted in a major sell-off of shares, with the WiseTech share price falling more than 60% from mid-February to mid-March. However, with many of China's factories reopening, business for the leading global logistics solutions provider in these markets is now picking up.
On another positive note, WiseTech recently provided a market update which noted that for the 3 months to March 2020, its business operations traded in line with its expected FY20 guidance range. This was due to continued growth in revenue and cash generations, which significantly offset the anticipated reductions from coronavirus restrictions.
The company continues to expect earnings growth of between 5% and 22% for FY2020, although this range had been downgraded back in February. The company also noted that it believes it won't need to raise additional capital or debt.
The road ahead over the next few months for WiseTech may be rocky due to the restrictions of some global supply chains. However, I believe that its long-term outlook for growth remains strong, and the recent market sell-off presents a good buying opportunity.
