2 ASX tech shares rated as buys

Here a couple of highly rated ASX tech shares…

| More on:
rise in asx tech share price represented by digitised rocket shooting out of person's hand

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

If you're looking for long term options, then the tech sector could be a good place for investors to look. This is because the sector is home to a number of companies that have the potential to grow strongly over the next decade.

Two ASX tech shares that are highly rated are named below. Here's why analysts rate them as buys:

Adore Beauty Group Limited (ASX: ABY)

The first ASX tech share to look at is Adore Beauty. Australia's leading online beauty retailer has been growing strongly in recent years thanks to the structural shift online which accelerated during the pandemic. This is expected to underpin a 43% to 47% increase in full year revenue in FY 2021.

The good news is that with online penetration rates for beauty products still much lower than other categories and in comparison to other Western markets, Adore Beauty appears very well-positioned to continue its growth over the next decade. Particularly given its leadership position in the growing market.

UBS is a fan of Adore Beauty. Its analysts currently have a buy rating and $5.60 price target on the company's shares. UBS believes the company will benefit from structural tailwinds in the coming years.

NEXTDC Ltd (ASX: NXT)

Another ASX tech share to look at is NEXTDC. It also appears well-placed for growth over the long term. This is thanks to the cloud computing boom and NEXTDC's position as one of the region's leading data centre-as-a-service providers.

At present, the company has 11 world class centres in key locations across Australia that are experiencing insatiable demand for capacity. In light of this, it has just announced plans to build a fourth centre in Sydney.

Furthermore, it has plans to expand into the Asian market. If NEXTDC can replicate its Australian success internationally, then it could provide it with a very long runway for growth over the 2020s and beyond.

UBS is also positive on NEXTDC. Last week the broker put a buy rating and $15.40 price target on its shares.

Motley Fool contributor James Mickleboro owns NextDC shares. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

group of traders cheering at stock market
Technology Shares

Codan shares near an all time high. Can they go higher?

Is there more room for growth for this ASX 200 company? 

Read more »

Kid putting a coin in a piggy bank.
Technology Shares

Why I think this ASX small-cap stock is a bargain at $4.41

This tech business has a lot going for it.

Read more »

The last piece of the jigsaw being fitted, indicating good news for a share price on merger or acquisition
Mergers & Acquisitions

WiseTech share price storms higher on $3.25b blockbuster acquisition

What is the company spending billions on? Let's find out.

Read more »

A businessman stacks building blocks.
Technology Shares

6% gain! What's up with Block shares today?

Block shares are up more than 34% since 2 May.

Read more »

Happy work colleagues give each other a fist pump.
Technology Shares

Guess which ASX 200 technology stock has outperformed Nvidia over the past 5 years?

This company has been nothing short of impressive.

Read more »

Buy, hold, and sell ratings written on signs on a wooden pole.
Technology Shares

After surging 13% yesterday, are TechnologyOne shares a buy, hold or sell according to Macquarie?

Valuations matter when investing, and Macquarie feels no different.

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Technology Shares

Why Goldman Sachs rates this ASX tech share as a top buy

Let's see why the broker rates this stock highly right now.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Technology Shares

WiseTech shares have surged 34% since April. Is it too late to buy?

Can WiseTech shares keep charging higher? Here’s what this investing expert expects.

Read more »