The tech sector has been hit very hard this month following a profit-taking selloff on Wall Street's Nasdaq index.
While this is disappointing, it has pulled down a number of high quality ASX tech shares to attractive levels.
Two ASX tech shares that I would buy are listed below. Here's why I think investors should snap them up when the dust settles:
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Appen Ltd (ASX: APX)
The Appen share price is down 26% from its 52-week high. I believe this is a buying opportunity for long-term focused investors. Appen is the leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). This essentially means that when businesses are developing AI models, they come to Appen to have its million-strong crowd-sourced team of experts prepare the data to go inside it. This is a vital part of the process, as without quality training data, a model will never reach its potential.
The good news for Appen is that demand for AI services is expected to grow strongly over the next decade as businesses and governments invest heavily in the space. I believe this bodes well for Appen and expect it to underpin strong earnings growth over the next decade. In light of this, I think now would be an opportune time to invest.
ELMO Software Ltd (ASX: ELO)
The ELMO Software share price is down a whopping 35% from its 52-week high. I think this has brought the shares of the cloud-based human resources and payroll software company to an attractive level. Especially given its strong long term growth potential and its positive performance during the pandemic. ELMO was a strong performer in FY 2020 and grew its annualised recurring revenue (ARR) by 19.7% to $55.1 million. Management expects similarly strong organic ARR growth in FY 2021 and looks likely to bolster this with acquisitions.
Looking further ahead, the company estimates that the ANZ market is currently worth $2.4 billion per year and the UK market is worth $6.8 billion. This gives ELMO and its quality software platform a long runway for growth over the next decade.
