Are these the 3 best tech shares on the ASX?

While the Australian share market doesn’t have anywhere near as many tech stars as the United States, Europe, or China, it certainly is no slouch and is home to a number of quality tech companies with global ambitions.

Three of my favourites are listed below. Here’s why I think they could be great buy and hold investments.

Altium Limited (ASX: ALU)

I think that this software-as-a-service company has a very bright future ahead of it thanks to the rapid growth of the internet of things (IOT) market. I expect the growth of the IOT market could accelerate after 5G internet is released and faster speeds encourage internet connectivity for more and more every day devices. As the majority of these devices require printed circuit boards (PCB) inside them, I believe demand for Altium’s award-winning PCB design software will grow strongly.

Appen Ltd (ASX: APX)

Appen is a fast-growing machine learning and artificial intelligence dataset provider with a client list that includes some of the biggest tech giants in the world. Demand for its services has been growing strongly, especially in the social media and search category. This recently led to Appen delivering an impressive 62% year-on-year lift in EBITDA. But this growth isn’t about to stop any time soon, with management recently forecasting an acceleration in earnings growth in FY 2018. Management expects EBITDA to rise to between $50 million and $55 million in the year ahead, representing year-on-year growth of between 77.9% and 96%.

Xero Limited (ASX: XRO)

Whilst this accounting software provider may have a decent share of the Australian, New Zealand, and UK markets, its share of the U.S. market is still only very slender. Although this market is highly competitive and will be no cakewalk, I believe the quality of the product will allow Xero to gradually win a greater and greater share of it. This could provide Xero with the potential to generate above-average growth for some time to come.

Looking for the next Altium or Appen? Then check out these up and coming tech stars.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Cochlear or REA Group.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

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