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Should you buy these 3 top tech shares?

Over the last 12 months the S&P/ASX 200 Info Tech (Index: ^AXIJ) (ASX: XIJ) has been an impressive performer and put on a gain of over 24%.

While I think the information technology index has the potential to push higher again this year, will these three tech shares?

Carsales.Com Ltd (ASX: CAR)

The shares of this car listings business were amongst the best performers on the index last year, providing a solid gain of almost 28%. This share price gain has, however, left its shares changing hands at 31x trailing earnings. I think this is quite expensive and that the company could struggle to deliver strong enough earnings growth to justify the premium. I’m not alone in this view, UBS recently downgraded its shares to a sell rating with a $14.00 price target.

Nextdc Ltd (ASX: NXT)

I’m a huge fan of NEXTDC and believe it is one of the best buy and hold investment options on the local share market. While its shares do look expensive compared to the market-average, they do look about fair value when compared to its international peers. Investors appear to be prepared to pay a premium to own data centre operator shares due to the incredible demand that is been experienced. I expect this demand will only heighten in the coming years due to the seismic shift to the cloud.

Technology One Limited (ASX: TNE)

This leading enterprise software company was a bit of a disappointment in FY 2017. The slower than anticipated return to profitability of its consulting business weighed heavily on its performance and led to a full-year profit downgrade. However, management is confident that its cloud business is capable of delivering exceptionally strong growth over the coming years. While I’m not a buyer of its shares at this price, I think it is worth keeping an eye on the performance of its cloud business.

In the meantime, I think these other top tech shares are in the buy zone today.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia has recommended carsales.com Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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