Due to recent weakness in the tech sector, a number of quality shares have pulled back materially from their highs. This has potentially created a buying opportunity for investors.
Two such shares are listed below. Here's what you need to know about these buy-rated tech shares:
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Nitro Software Ltd (ASX: NTO)
The first ASX tech share for investors to look at is Nitro Software. It is the document productivity company behind the Nitro Productivity Suite. This suite provides integrated PDF productivity and eSignature tools to businesses great and small globally. This includes over two-thirds of the Fortune 500.
Bell Potter is bullish on Nitro Software. Particularly given the recent acquisition of Connective NV for US$81 million, which the broker described as game-changing.
It commented: "The rationale for the acquisition is it will accelerate and enhance Nitro's eSign, eID (electronic identity), and document workflow capabilities. It will also position Nitro to become the third global player in the enterprise eSign market along with DocuSign and Adobe."
Bell Potter has a buy rating and a $4.50 price target on the company's shares. This suggests the Nitro Software share price could double from the current level of $2.17.
PointsBet Holdings Ltd (ASX: PBH)
Another ASX tech share that is rated highly is PointsBet. It is a growing sports betting operator and iGaming provider that offers innovative sports and racing betting products and services via a scalable cloud-based platform.
PointsBet currently operates in the ANZ and North American markets. The latter is being supported by its deal with US sports broadcaster NBCUniversal. This deal is putting the PointsBet brand in front of millions of sports fans across the United States, which is driving strong customer and revenue growth in the country.
And while its marketing spend has been greater than many were expecting due to fierce competition, Goldman Sachs believes it will bear fruit in the future.
It commented: "Overall we remain positive on PBH, with our thesis underpinned by i) PBH's leverage to the burgeoning US Sports Betting and iGaming market, which we forecast to be a >US$50bn TAM opportunity at maturity, ii) our view that PBH remains well-placed to capitalise given its in-house tech stack, iii) upside risk to long-run sustainable margins in Aus and the US, and iv) scalability benefits ahead from NBCUniversal leads and broader coverage from state rollouts."
Goldman currently has a buy rating and a $12.79 price target on the company's shares. This implies 100% upside from the current PointsBet share price of $6.38.
