If you're looking to take advantage of the weakness in the tech sector, then check out the two tech shares listed below.
Both of these ASX tech shares have been named as buys and tipped for strong growth in the future. Here's what you need to know:
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NEXTDC Ltd (ASX: NXT)
The first tech share that could be a buy is leading data centre operator, NextDC.
It has been tipped as a buy by analysts at Morgans. This is due to the broker's belief that the company is well-placed for long term growth thanks to its strong market position, the industry's significant barrier to entry, and its expansion opportunities.
Morgans commented:
We retain our Add recommendation and highlight that NXT remains our preferred pick given substantial structural growth, quality management, significant barrier to entry and, in our view, improving competitive advantage with regional/edge sites.
We see a clear pathway for long-term growth, substantially higher EBITDA and material free cash flow, over the medium term.
Morgans has an add rating and $13.01 price target on NEXTDC's shares.
Readytech Holdings Ltd (ASX: RDY)
Another tech share that could be in the buy zone is Readytech. It provides enterprise software to several market verticals including higher education, HR, work pathways, and local government.
Analysts at Goldman Sachs are very positive on the company. This is due to its strong position in areas of the market that are under-served by large enterprise software competitors.
The broker explained:
In our view, RDY will continue to grow mid-teens organically while making accretive acquisitions (such as IT Vision), with profitability underpinned by solid software metrics including low churn at ~3% and high LTV/CAC.
RDY serves defensive end markets (e.g. higher education, local government) and has high recurring revenue (>85%) which should protect the company's earnings profile in an economic downturn.
Goldman has a buy rating and $4.60 price target on Readytech's shares.
