While Australians can't go to the ASX for the world's biggest and best technology stocks such as Netflix or Google, it is still home to a number of young and exciting tech prospects that could generate enormous profits over the coming years.
The problem is, it can be difficult knowing which ones are worth your time and money, and which ones are either lacking promise or have simply become too expensive.
Here are three stocks generating plenty of hype amongst investors.
Martin Aircraft Company Ltd (ASX: MJP) listed on the ASX less than two months ago but has already caught the market's attention. Within its first two weeks as a publicly listed company, the stock surged as much as 687.5% to $3.15, but has since come back down to earth to trade at 87.5 cents.
Martin Aircraft is a New Zealand-based company that is striving to commercialise the Martin Jetpack from 2016 onwards. It expects to sell each unit for around US$200,000 (plus various customisations) with its first model being aimed towards rescue and emergency services.
Given the futuristic nature of Martin Aircraft's business, it's easy to see why the market became so excited over the stock early on. However, the company is not yet profitable (it hasn't even made its first sale yet), while it must also overcome regulatory hurdles to ensure its products have a future. Although the stock has retreated considerably since its all-time high, investors might want to hold off from buying until the company's future prospects become clearer.
Nearmap Ltd (ASX: NEA) is another exciting technology prospect, although unlike Martin Aircraft, it has already proven its worth. Nearmap provides ultra-high resolution photographs of towns and structures, which have proven useful across a multitude of industries.
Take the construction industry as a perfect example. By utilising Nearmap's photographs, builders can show their clients ultra-clear updates on a build on the computer screen, reducing the need for field calls – thus saving both time and resources. The technology is becoming popular in Australia and Nearmap is already well advanced in its expansion into the much larger US market.
While that expansion will no doubt impact earnings growth in the near-term, it could provide enormous upside for investors willing to hold onto the stock for the long term. Shares sell at 56 cents, down from a 52-week high of 83.5 cents.
Finally, although some investors have expressed concerns over the valuation of XERO FPO NZ (ASX: XRO), the accounting software provider still appears to be a solid investment prospect.
Unlike rivals such as MYOB Group Ltd or Reckon Limited (ASX: RKN), the New Zealand-based Xero is yet to make a profit as it pumps more and more cash into its own development. The company focuses solely on cloud-based accounting software and is quickly stealing market share from its more established rivals – particularly in New Zealand and Australia.
With strong growth prospects globally, Xero could still generate significant returns for shareholders from its current price tag of $23.60. That's down from an all-time high of close to $43 in March 2014.
