Today, we’ll look at the best ASX tech stocks to buy on the ASX in 2021 that we think are the best Australian tech stocks to invest in.
Some of these ASX technology stocks tend to be in there infancy and there is a lot of upside built into the share price.
Considering that we are now in a low interest rate environment where inflation looks to be a potential issue, investing in high growth tech stocks will help your portfolio keep up with inflation.
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The Best ASX Tech Stocks to Buy in 2021
This is a curated list of what we believe are the 5 best ASX tech stocks to buy in 2021. These companies all have an exciting, scalable product and and great business plan with strong upside potential.
These companies represent the best of what Australian technology stocks can offer.
Freelancer Ltd (ASX:FLN) is an Australia-based online freelance portal with a worldwide reach.
The company, a pioneer of the gig economy has since morphed into the largest freelance portal by the number of users.
The company’s growth plateaued in the years leading up to the pandemic due to stiff competition from rivals such as Toptal, UpWork and Fiverr.
However, the pandemic was a shot in the arm for the company and revitalized its business due to the transition to online and remote work.
The company benefited from a massive rise in demand for popular gigs due to the acceleration of digitisation caused by the pandemic.
Megaport is a cloud service provider across 130 cities and 23 countries and a NaaS (Network-as-a-Service) pioneer.
With the advent of COVID-19, cloud computing is becoming ubiquitous with working from home.
In fact, research and surveys have shown that up to 70% of companies expect between 5 to 20 per cent of their workforce to work from home post-covid.
The NaaS sector alone is forecasted to grow at 35% CAGR in the next 4 years.
With an all-star list of customers and partners such as Adobe, BHP, Tesla and Zoom, Megaport has proven that they have a quality and popular product to go with the strong growth in their revenue.
Bigtincan is a leader and innovator in the Software as a Service (SaaS) provider of sales enablement software with core operations in Sydney and sales headquarters in Boston.
The company’s software organises and delivers automation and productivity tools for employees, in other words, software that provides sales team with resources to close more deals.
This is a service that will have tremendous growth as the workforce shifts towards digital sales coaching, as opposed to physical classrooms, even after the COVID pandemic.
With the advent of working from home and the growth in digital and technology solutions, the shift from classroom to digital sales coaching will continue to grow now and into the future.
Some estimates forecast that up to 55% of sales training will be digital by 2021.
The global SaaS market is estimated to be US$68.2 billion in 2020, with a Compound Annual Growth Rate (CAGR) of 18.2% over the next 7 years.
In addition, Bigtincan has also leveraged its products towards the mobile sector, another industry with strong growth.
Bigtincan shares is well placed to leverage multiple high growth sectors and is a stock that we think has strong potential.
Appen is a global leader in the provision of human-annotated data for training artificial intelligence and machine learning algorithms.
Appen specialises in the Relevance and Speech & Image segments that are mostly used for improving internet search accuracy, virtual assistants, and autopilot, among other scenarios.
Appen is viewed as a workforce management company with high exposure to the technology sector. Appen finds “curated” workers; assigns them with the data processing projects and assures the data quality before sending the processed data to its clients, who are mostly technology leaders like Google, Apple and Microsoft.
Xero offers a cloud-based accounting software platform for small and medium-sized businesses.
Cloud computing is the delivery of on-demand computing services.
This includes servers, storage, databases, networking, software and analytics over the Internet (“the cloud”) to offer innovation, flexibility, and economies of scale.
Cloud computing is the next big thing as it allows mobility, a distinct advantage during the COVID-19 pandemic.
Given the volatility surrounding the coronavirus, the XRO share price along with almost every other stock was sold off during the early phase of COVID-19.
However, it has bounced back and regained nearly all its share price losses since then.
Additionally, Xero shares (ASX:XRO) delivered strong financial results for the FY 2020 financial year.
The company invested heavily in software development, enabling its software business to achieve consistent revenue growth of 30-40%.
How Do We Find ASX Tech Stocks To Buy?
Tech stocks in Australia are generally driven almost entirely by qualitative factors such as first mover advantage, quality and of their software and overall technology.
Quantitative factors such as profit, revenue and so forth generally take a back seat.
Even though it is imperative that their financials are sound, when it comes to tech stocks, we are buying the story and perceived future value.
However, the very nature of valuing companies through qualitative factors means that there is a lot of room for error, opinion and subjectivity.
This means that tech stocks tend to be small to medium cap, high risk and fairly speculative.
The hardest part when it comes to finding ASX tech stocks is the ability to process the information and factors at hand to make a good judgement call.
Our Research team specialises in this and has combed the ASX for some of the best tech stocks on the Australian market.