It's about time you buy this ASX tech share that's beaten down 75% this year: expert

This technology stock has burnt many investors but the tide seems to be turning.

| More on:
a man wearing spectacles has a satisfied look on his face as he appears within a graphic image of graphs, computer code and technology related symbols while he concentrates on a computer screen

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

At a barbecue — or indeed on stock advice websites — investors hear all about the triumphant 10-baggers.

But we all know every portfolio has ASX shares that have broken the hearts of owners. It's just no one talks about them.

It is perfectly understandable to be reluctant to trust a business again after it has burnt you or other investors badly. It's just human nature.

However, investors need to remember that ASX shares have no memory. A stock doesn't care that it was once $10 but now $2. 

The only thing that matters when considering equities to buy is what the future prospect of the business is at that point in time. History means nothing.

So if you take on this rational mindset, there is one technology stock that's been an absolute dog the past couple of years that you may consider buying now:

'We expect the share price to improve'

Appen Ltd (ASX: APX) used to be a darling of growth investors but has caused nothing but grey hairs since the COVID-19 pandemic hit.

The stock has lost an eye-watering 93% of its value since August 2020, and 75% year to date.

"The share price of this artificial intelligence data provider has fallen from $40.08 on August 17, 2020 to trade at $2.65 on November 24, 2022," Red Leaf Securities chief John Athanasiou told The Bull.

Created with Highcharts 11.4.3Appen PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

However, Athanasiou feels like it's time to now forgive Appen for past sins.

"We expect the share price to improve as money flows back to the domestic technology sector," he said.

"The company expects fiscal year 2022 revenue to range between US$375 million and US$395 million."

Discounted for a takeover?

The really exciting prospect for Athanasiou, though, is seeing other listed Australian tech companies like ELMO Software Ltd (ASX: ELO) and Nitro Software Ltd (ASX: NTO) receive tempting takeover bids from private investors.

"There's been corporate activity in the domestic technology sector, as a weaker Australian dollar makes companies more attractive to international private equity firms," he said.

"Appen, at this price, could be a target."

Appen's major clients are big US tech firms and after a torrid year, they themselves could be looking forward to better conditions next year.

And this could also provide a tailwind for Appen, reported The Motley Fool's Bernd Struben last week.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 3 April 2025

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd and Elmo Software. 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 Scott Phillips.

More on Technology Shares

Ecstatic man giving a fist pump in an office hallway.
Technology Shares

Here's how WiseTech is rewarding its shares investors today

WiseTech shares have survived the recent market turmoil well, and today there is more good news.

Read more »

Robot hand and human hand touching the same space on a digital screen, symbolising artificial intelligence.
ETFs

Invest in future technology with these exciting ASX ETFs

These funds could be worth a look if you want exposure to AI, robotics, and electric vehicles.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Technology Shares

Surging earnings and a slumping share price: Should I buy this ASX 200 tech stock today?

With profits and earnings soaring and shares down in 2025, is this ASX 200 tech stock too good to ignore?

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Technology Shares

Guess which ASX tech stock is jumping 10% on strong update

It has been another impressive quarter for this tech star.

Read more »

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

Should I buy the big dip on NextDC shares?

NextDC shares are down 32% in 2025. Should I buy the big dip on the ASX 200 data centre stock?

Read more »

Man ecstatic after reading good news.
Technology Shares

Guess which ASX 200 tech stock Bell Potter just upgraded after the market selloff

The broker has become bullish on this growth stock. But why?

Read more »

A man leans forward over his phone in his hands with a satisfied smirk on his face although he has just learned something pleasing or received some satisfying news.
Technology Shares

A quality ASX 200 stock to buy now amid the Trump tariff turmoil

A leading expert expects the ASX 200 company will deliver strong earnings growth for many years to come.

Read more »

Woman with a scared look has hands on her face.
Technology Shares

Why is this ASX 200 tech stock sinking 14% on Monday?

Let's see why investors are hitting the sell button this morning.

Read more »