Nasdaq rebound! Brokers say these ASX 200 tech shares are buys

These could be the tech shares to buy as the sector rebounds.

| More on:
A woman looks internationally at a digital interface of the world.

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

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:

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.

Motley Fool contributor James Mickleboro has positions in Altium and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Altium and Xero. The Motley Fool Australia has positions in and has recommended Xero. 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

Man with rocket wings which have flames coming out of them.
Technology Shares

Guess which ASX All Ords share is rocketing 16% on an asset sale

This share is catching the eye with a very big gain on Friday. But why is it rising?

Read more »

a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the Pilbara Minerals share price continue to fall
Technology Shares

Why are Megaport shares sinking 14% on Friday?

Why are investors hitting the sell button? Let's find out.

Read more »

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Why today is a big day for this ASX 200 AI stock

This company stands to benefit from 'one of the most profound transformations in the history of technology'.

Read more »

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

Why are WiseTech Global shares crashing almost 20% today?

Recent controversy has led to delays to an important launch and hit its revenues.

Read more »

Woman with speaker
Technology Shares

After falling 62%, this leading ASX 200 share could be gearing up for growth!

This industry-leading company looks like a turnaround opportunity to me.

Read more »

A man has computer-generated images rushing through his head indicating an AI (Artificial Intelligence) concept of a communication network.
Technology Shares

ASX investors are obsessed with Nvidia shares! Here's why

The global chipmaker reported a 94% increase in annual revenue in the third quarter.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Technology Shares

Own WiseTech shares? Here's what to watch at Friday's AGM

This could be one of the major events of the year.

Read more »

Woman and man calculating a dividend yield.
Technology Shares

This ASX tech stock is down 93% from its highs. Could Trump tariffs give it a boost?

The ASX tech stock could enjoy tailwinds from Trump’s threatened tariffs.

Read more »