With the tech sector booming again following some strong results on Wall Street's Nasdaq index, now could be a good time to return to this side of the market if you haven't done so already.
But which ASX 200 tech shares could be buys? Listed below are two that have been tipped as buys by brokers recently. Here's why they could be top options for tech investors:
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Altium Limited (ASX: ALU)
The first ASX 200 tech share to consider buying is Altium. It is a multinational software company that focuses on electronics design systems for 3D printed circuit board (PCB) design and embedded system development.
Thanks to its leadership position in the industry and favourable tailwinds such as the Internet of Things and artificial intelligence, management is aiming to grow its revenue to US$500 million. This will be more than double Altium's FY 2022 revenue of US$220.8 million.
In addition, the company is targeting margin improvements as its scales, which bodes well for its profit growth over the coming years.
Morgan Stanley is a fan of Altium. It currently has an overweight rating and $43.50 price target on its shares.
Xero Limited (ASX: XRO)
Another ASX 200 tech share that has been named as a buy is Xero. This New Zealand based cloud accounting platform provider has over 3 million subscribers globally, which is underpinning huge revenues.
However, it is still only a small slice of its total market opportunity. For example, Goldman Sachs highlights that Xero has a "compelling global growth story" thanks to it total addressable market (TAM) of ~45 million+ subscribers.
In addition, Goldman notes that Xero recently announced a major cost reduction program which it believes will support very strong earnings growth in the coming years. It also points out that since March it has "seen Xero's Linkedin workforce decrease by c.14% to 5.1k." This appears to demonstrate that its program is coming along very nicely.
All in all, the broker is so bullish on Xero that it has it on its coveted conviction list with a buy rating and $126.00 price target.
