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2 excellent ASX tech shares with strong growth potential

These tech shares are highly rated for a reason…
The post 2 excellent ASX tech shares with strong growth potential appeared first on The Motley Fool Australia. –

If you’re interested in adding a tech share or two to your portfolio, then you may want to look at the two listed below.

These two ASX tech shares have been rated as buys and tipped to grow strongly over the long term. Here’s why they could be excellent options:

Appen Ltd (ASX: APX)

The first ASX tech share to look at is this artificial intelligence (AI) data services company.

Its shares have come under significant pressure over the last 12 months due to concerns over the softening of demand for its services during the pandemic from some of its biggest customers.

Positively, management appears to believe this weakness is only temporary and the issues it is facing aren’t structural. It is expecting demand to rebound strongly once trading conditions return to normal.

In addition to this, management has announced plans to evolve into a provider of a broad range of AI data annotation products and solutions. It believes this will unlock growth in new markets.

Citi remains positive on Appen. Earlier this month it retained its buy rating and $18.80 price target on the company’s shares. Citi notes that some of its biggest customers have reported an acceleration in ad revenue growth. It feels this could be a positive for Appen.

Nitro Software Ltd (ASX: NTO)

Another ASX tech share to look at is Nitro Software. It is a software company that is aiming to drive digital transformation in organisations around the world via its Nitro Productivity Suite. This product provides integrated PDF productivity and electronic signature tools to customers.

Demand for its offering continues to grow thanks to its quality and a number of positive industry tailwinds. This includes the global shift to remote and digital work. It has also just made a key acquisition that expands its total addressable market and an agreement with Salesforce that could boost sales.

Nitro recently released its second quarter update and revealed a 56% increase in its annualised recurring revenue (ARR) to US$33.8 million. This puts it on track to achieve its FY 2021 guidance for ARR of between US$39 million and US$42 million.

Wilsons is very positive on the company. It recently retained its overweight rating and lifted its price target to $4.22.

The post 2 excellent ASX tech shares with strong growth potential appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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