The strong run of the Altium Limited (ASX: ALU) share price continued on Tuesday with a 2% move higher to an all-time high of $14.92.
This means that the printed circuit board (PCB) design software provider’s shares have rocketed an impressive 86% higher since this time last year.
Why are its shares at a record high?
Investors have been fighting to get hold of Altium’s shares due to the strong growth being experienced in the PCB design industry.
It isn’t just Altium benefiting from this either, the shares of US-rival Cadence Design Systems are also up by a similar margin over the last 12 months.
Demand is growing strongly thanks almost entirely to the Internet of Things boom. As nearly all connected devices have a PCB inside them, PCB design software is increasing in demand greatly.
This is expected to remain the case for some time to come as well.
According to research firm Gartner, it estimates that 8.4 billion connected devices were in use worldwide in 2017, up 31 percent on 2016.
Furthermore, its analysts have predicted that this will grow to reach 20.4 billion by 2020, adding a lot of credibility to Altium’s forecast.
For some time now management has confidently forecast that it is capable of almost doubling FY 2017’s revenue to hit US$200 million by FY 2020.
So with potential future growth of that nature, it isn’t hard to understand why investor sentiment is so positive right now.
Should you invest?
I would rate Altium as a strong buy even if its shares are at a record-high and believe it is a great option for investors willing to make a buy and hold investment.
Overall, I think it could be one of the best tech shares on the market alongside Appen Ltd (ASX: APX), which also reached a record high during trade on Tuesday.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium and Appen Ltd. 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.