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Why I would buy and hold these top tech shares

The Australian tech sector may not be the biggest in the world, but it certainly isn’t short on quality.

Within the sector I think there are a good number of shares which could be very rewarding buy and hold investments.

Two of my favourites are listed below. Here’s why I like them:

Altium Limited (ASX: ALU)

In the first-half of FY 2018 this software-as-a-service company delivered a 30% increase in revenue to US$63.3 million and an impressive 50.8% lift in net profit after tax to US$14.9 million. This puts Altium on course to achieve its target of hitting annual revenue of US$200 million by FY 2020. To achieve this the company is focused on gaining market leadership in the rapidly growing printed circuit board (PCB) market through the roll out of new products, strategic partnerships, and the execution of an M&A strategy to increase its market reach. I remain confident that the quality of its product and the growth of the Internet of Things market will allow Altium to outperform its targets.

Appen Ltd (ASX: APX)

Another tech company that delivered an impressive result this year is Appen. The developer of high-quality, human annotated datasets for machine learning and artificial intelligence markets reported revenue growth of 50% to $166.6 million and underlying net profit after tax growth of 86% to $19.7 million in FY 2017. The star of the show for the company was its Content Relevance segment which saw revenue rise 69% to $120.2 million. This was driven by a growing use of machine learning in search and social media. The good news is that management expects acquisitions and the strong demand it is experiencing to lead to an acceleration in profit growth in FY 2018. It recently advised that full-year EBITDA is trending towards the upper end of its $50 million to $55 million guidance range. Hitting the top end will mean EBITDA growth of 95% year-on-year.

In addition to Altium and Appen, I think investors ought to consider taking a look at fellow tech shares NEXTDC Ltd (ASX: NXT) and Xero Limited (ASX: XRO).

And then finally, these four shares could be fantastic buy and hold investment options as well.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of Altium, Appen Ltd, and Xero. 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 Scott Phillips.

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