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Why I’d invest $1,000 in this ASX tech share today

ASX tech shares have not all enjoyed the same fortune in 2020. While the S&P/ASX 200 Index (ASX: XJO) has slumped 16.62% this year, investors have struggled to value many of our largest listed technology companies.

We’ve seen the Afterpay Ltd (ASX: APT) share price rocket from a 52-week low of $8.01 per share to a new 52-week high of $43.68 in the space of a couple of months. I think a 445% share price increase in such a short space of time means the ship may have sailed on Afterpay for now.

However, if you’re looking for ASX tech shares that are good value today, check out one of my top picks below.

Why this ASX tech share is in the buy zone

Let’s ignore the big winners in 2020 like Afterpay and NextDC Ltd (ASX: NXT) for just a moment. While their recent gains are good news for shareholders, the rest of us may be experiencing a bit of FOMO!

That’s why I’m focusing on what could be ‘the next Afterpay’. Sitting at the top of my list is one of my favourite ASX tech shares, Xero Limited (ASX: XRO).

Xero shares haven’t crashed lower in 2020 and are actually outperforming the ASX 200 by quite a margin. Whilst the Xero share price has only edged 0.20% higher this year, it has been far less volatile than many of its ASX 200 cohorts. 

It’s true that the ASX tech share is already highly valued. However, I don’t think this means it can’t continue to grow well into the future. Xero is still continuing to sign large clients and I can see demand for its services increasing in the current climate. Businesses need to carefully manage their obligations under government stimulus programs like JobKeeper and Xero’s platform is perfect for just that.

Foolish takeaway

Xero shares have been holding their value in 2020. That’s a real plus for investors given it is a highly valued growth share. Despite the fact some believe it is currently overvalued, I like Xero’s prospects this year and think we could see a solid earnings result in August 2020. Therefore, I still like this share for adding some growth potential to a diversified portfolio.

If you’re after another top ASX growth prospect in 2020, check out this all-in buy alert today!

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Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.