3 of the best ASX 200 tech stocks to buy now for 20%+ returns

Big returns could be on offer from these stocks according to analysts. But how big?

| More on:
a group of three cybersecurity experts stand with satisfied looks on their faces with one holding a laptop computer while he group stands in front of a large bank of computers and electronic equipment.

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 tech sector has been booming this year, but that doesn't mean it is too late to invest in this side of the market.

In fact, some big returns could be on offer from the ASX 200 tech stocks listed below according to analysts.

Here's what they are recommending as buys:

Life360 Inc (ASX: 360)

The first ASX 200 tech stock that could be a quality option for investors is Life360. It is the location technology company behind the eponymous Life360 family tracking app, which has over 70 million active users.

Last month, Life360 released its latest quarterly update and revealed that its stunning growth has continued. It reported a 20% increase in revenue to US$84.9 million. This was stronger than expected and led to management upgrading its guidance for the full year.

And with the company recently launching an advertising business to monetise its vast user base, analysts believe Life360's growth can continue for some time to come.

It is for this reason that Bell Potter continues to recommend Life360 to investors. It has a buy rating and $20.50 price target on Life360's shares, which implies potential upside of 22% for investors.

NextDC Ltd (ASX: NXT)

Another ASX 200 tech stock that could be a buy this month is NextDC. It is a technology company enabling business transformation through innovative data centre outsourcing solutions, connectivity services, and infrastructure management software.

Macquarie is very positive on the company's outlook and believes it is well-positioned to benefit from increasing demand for data centre capacity. This is being driven by the shift to the cloud and the artificial intelligence boom, which includes a new breed of hyperscale customers (GPU Cloud and ChatGPT-type providers) entering the market.

The broker currently has an outperform rating and $21.20 price target on NextDC's shares. This suggests that upside of 25% is possible over the next 12 months.

Xero Ltd (ASX: XRO)

A third and final ASX 200 tech stock that could be a great option for a $10,000 investment is Xero. It is a growing cloud accounting platform provider with 4.2 million subscribers across the globe. Xero's software connects small business owners with their numbers, their bank, and advisors at anytime.

Goldman Sachs rates Xero very highly due to the quality of its platform and is huge growth opportunity. It highlights that the company's market opportunity is ">100mn SMBs worldwide representing a >NZ$100bn TAM." This means that it is only scratching at the surface of its global market opportunity right now, which provides it with decades of growth.

The broker currently has a buy rating and $180.00 price target on its shares. This implies potential upside of approximately 22% for investors from current levels.

Motley Fool contributor James Mickleboro has positions in Life360, Nextdc, and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Life360, Macquarie Group, and Xero. The Motley Fool Australia has positions in and has recommended Macquarie Group and 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 holding a calculator with Australian dollar notes, symbolising dividends.
Technology Shares

$10,000 invested in DroneShield shares 5 years ago is now worth…

You might be laughing all the way to the bank if you had done this.

Read more »

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 »