Tech's back! Fund names 2 ASX shares to ride the resurgence

Technology stocks have gone gangbusters this year. Here's a pair of ways to ride the resurgence.

| More on:
A geeky-looking young man with glasses bites down onto a computer keyboard in frustration or despair.

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

The S&P/ASX All Technology Index (ASX: XTX) has incredibly rocketed 14.8% upwards in less than five weeks this year.

But if you're looking to ride this wave, you still need to be selective about which ASX technology shares to buy.

With much economic gloom and more interest rate rises to come, investors still need to back businesses that have solid long-term prospects, rather than speculative cash burners.

With this in mind, the team at Elvest this week mentioned two tech shares in a memo to clients that are going places and are likely to reward investors for years to come:

'Materially benefit Aussie Broadband's margins'

The Aussie Broadband Ltd (ASX: ABB) share price has gained 15% so far this year, which the Elvest analysts attributed to NBN Co's newly proposed wholesale pricing plans.

"Under the proposal, subject to ACCC approval, NBN Co will reduce wholesale prices for ultra-high speed tiers, where Aussie Broadband specialises."

The Victorian company has risen to take an almost 7% share of the NBN market, admirably playing against far bigger telcos with much deeper pockets.

Created with Highcharts 11.4.3Aussie Broadband PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Aussie Broadband markets itself as a premium provider, admitting it's not the cheapest but boasting of an all-Australian call centre and superior broadband speeds.

NBN Co's new pricing scheme will be a huge boost to the business and its investors once it passes all the bureaucratic steps.

"The changes will materially benefit Aussie Broadband's margins, assuming rational industry pricing thereafter."

The Aussie Broadband share price has halved since April last year.

ASX company 'demonstrably adding value'

Digital lotteries retailer and software maker Jumbo Interactive Ltd (ASX: JIN) has also enjoyed a happy new year.

The stock price has risen 6% since the champagne popped on new year's day.

According to the Elvest team, the company signed a big client contract during January.

"Jumbo Interactive announced a six-year extension of its software licence agreement with leading charity operator Mater during the month," read the memo.

"This continues a highly successful partnership between the two groups, with Jumbo Interactive demonstrably adding value for one of Australia's most prominent healthcare focused charities."

Created with Highcharts 11.4.3Jumbo Interactive PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Despite its software operations, Jumbo's involvement in the lotteries sector seems to have kept it somewhat shielded from the broader tech sell-off.

The stock has lost just 16.7% over the past 12 months.

Lotteries are seen to be a defensive business that provides reasonably consistent earnings through different parts of the economic cycle.

With Australia and the world expected to suffer from an economic slowdown, this defensive quality could once again come into play.

Motley Fool contributor Tony Yoo has positions in Aussie Broadband. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband and Jumbo Interactive. The Motley Fool Australia has recommended Aussie Broadband and Jumbo Interactive. 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

Happy woman working on a laptop.
Technology Shares

Up 60% since April, why this $40 billion ASX 200 tech stock remains a 'compelling buy' today

A leading expert believes this $40 billion ASX 200 tech stock has a lengthy growth runway ahead of it yet.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

DroneShield shares sink 7% despite big news

Let's see what's going on with this market darling on Thursday.

Read more »

A man activates an arrow shooting up into a cloud sign on his iPad.
Technology Shares

Up 25% since April, is it too late to buy Xero shares today?

A leading expert gives his verdict on the growth outlook for Xero shares.

Read more »

Man looking at digital holograms of graphs, charts, and data.
Technology Shares

2 amazing ASX tech shares I wish I'd bought last year

These tech companies are among the world’s best companies.

Read more »

A man in a business suit and tie places three wooden blocks with the numbers 1, 2, and 3 on them on top of each other.
Broker Notes

3 reasons to buy this booming ASX All Ords tech stock today

A leading broker forecasts more gains to come from this surging ASX All Ords tech stock.

Read more »

Man ponders a receipt as he looks at his laptop.
Technology Shares

Brokers rerate 3 leading ASX 200 tech stocks

Experts reveal their ratings on the ASX 200 tech sector's three biggest companies.

Read more »

Hologram of a man next to a human robot, symbolising artificial intelligence.
AI Stocks

Why Macquarie forecasts a big rebound for these 2 quality ASX All Ords tech stocks

Macquarie expects a big rebound is coming for these AI linked, ASX All Ords tech stocks.

Read more »

A young man goes over his finances and investment portfolio at home.
Technology Shares

Is it too late to buy DroneShield shares?

This high-flying stock is up 90% since this time last month. Where next? Let's find out.

Read more »