3 ASX tech shares that could take off in FY21

Many ASX tech shares have seen their share prices spike during COVID-19 – but here are three I think can continue to soar in FY21.

| More on:
man jumping from 2020 cliff to 2021 cliff representing asx outlook 2021

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX tech shares have proved to be among the most resilient stocks to own throughout the COVID-19 global pandemic. There has of course been the much publicised surge in the Afterpay Ltd (ASX: APT) share price, buoyed by the consumer trend towards online shopping during the relentless boredom of lockdowns. But data warehouse operator NextDC Ltd (ASX: NXT) has also seen a strong uptick in demand as more corporate clients transitioned to remote working arrangements. And it was only a couple of weeks ago that the share price of accounting software developer Xero Limited (ASX: XRO) breached the $100 mark for the first time in its history.

That's not to say the outlook is entirely rosy. Extended lockdowns in Victoria, the announcement of a national recession, and continuing geopolitical tensions in our region are not great for business. But if this pandemic has taught us anything, it's that our reliance on technology is – if anything – exacerbated by a crisis.

Additionally, the pandemic has changed how many of us work, in ways that are potentially long lasting – and possibly even permanent. It means that many ASX tech shares that support remote, agile and adaptive working arrangements have seen big upticks in demand.

So, with that in mind, here are three under-the-radar innovative companies that could grow into tomorrow's major ASX tech shares.

3 ASX tech shares poised for growth

Whispir Ltd (ASX: WSP)

Whispir develops integrated, cloud-based communications software for corporate clients. It allows users to manage, coordinate and automate internal and external communications, and provides templates clients can use for marketing and publicity campaigns. Its centralised platform means that companies can oversee workflows, increase efficiencies, and more actively measure results.

Whispir's FY20 results beat its own prospectus forecast, despite the headwinds generated by COVID-19. Annualised recurring revenues (ARR) jumped 34% year on year to $42.2 million, driven by higher than anticipated net new customer numbers. This ASX tech share also ended the year with a net cash balance of $15.2 million.

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan develops software to help streamline and automate sales and marketing functions for its business clients. The company's platform provides a centralised, integrated software solution that is designed to support businesses throughout their entire sales and marketing lifecycle, from onboarding and training new staff, to engaging new customers and providing accurate reporting.

Its FY20 results were also strong, with ARR up 53% to $35.8 million. It delivered at the top end of guidance, and also made a number of strategic acquisitions during the year. Bigtincan expects another solid year of growth in FY21, forecasting ARR growth in the range of 37% and 48% to between $49 million and $53 million.

Megaport Ltd (ASX: MP1)

Megaport is another innovative tech share helping businesses adapt to new COVID-19 remote working arrangements. It offers customisable, 'on demand' network services to corporate clients, giving companies the flexibility to manage their bandwidth usage. For example, businesses can scale up their bandwidth when transferring large amounts of data for major projects, and then reduce consumption during off-peak times. This allows businesses to be more efficient with their data usage and cut their overall costs.

FY20 was a bumper year for this ASX tech share. Revenues increased by 66% year on year to $58 million, customer numbers were up by 24% to 1,842, and the company ended the year with a $166.9 million cash position thanks to two successful capital raisings. And with international expansions continuing across Asia Pacific, Europe and North America, Megaport could be one of the top growth companies to watch over the next few years.

Rhys Brock owns shares of AFTERPAY T FPO, BIGTINCAN FPO, MEGAPORT FPO, Whispir Ltd and NextDC Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO, MEGAPORT FPO, and Whispir Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended BIGTINCAN FPO, MEGAPORT FPO, and Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Technology Shares

Here are 2 exciting ASX shares rated as buys

These shares are highly rated by brokers. Let's find out why.

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
Technology Shares

Is this the decade of the data centre? One ASX 200 stock that could benefit

Let's see why one leading broker thinks this stock could be destined for big things.

Read more »

A human-like robot checks out market performance on a laptop, indicating the rise of AI shares.
Technology Shares

3 top performing ASX AI shares for your watchlist

Have you positioned your portfolio to capitalise on the next tech revolution?

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
AI Stocks

3 reasons to buy NextDC shares today

A leading expert forecasts more growth to come for NextDC's rebounding shares.

Read more »

A share market analyst looks at his computer screen in front of him showing ASX share price movements
Technology Shares

Why this $3.9 billion acquisition makes Xero shares a buy today

A leading expert forecasts that Xero’s $3.9 billion investment is about to pay off.

Read more »

Three young people in business attire sit around a desk and discuss.
Small Cap Shares

Tiny tech: 3 ASX small-cap shares with new ratings

Toby Grimm of Baker Young and Peter Day of Sequoia Wealth Management share their new ratings.

Read more »

Smiling young parents with their daughter dream of success.
Technology Shares

Could Life360 shares rise to $37.50?

Bell Potter has given its verdict on this tech stock.

Read more »

Man smiling at a laptop because of a rising share price.
Technology Shares

Investors should put these 2 top ASX tech shares on the watchlist

Looking for growth? These two stocks are delivering.

Read more »