The ASX tech sector is tiny when compared to the much larger United States market, which is home to tech giants such as Google and Amazon. However, there is a fast-growing base of high-quality technology companies now listed on the ASX.
Here we look at two such ASX tech shares that are on my buy list right now for long-term growth: Afterpay Ltd (ASX: APT) and Audinate Group Ltd (ASX: AD8).
The Afterpay share price has seen extraordinary gains in recent months, increasing from $8.90 in late March to currently trade at $75.05. That's a massive gain of 743%.
This strong growth was partly driven by a series of positive market updates, one of which was in late May. In this update, Afterpay revealed it had reached the 5 million customer milestone in the massive US market.
The buy now, pay later (BNPL) provider did see its share price hit hard in the early phase of the coronavirus pandemic. Back on 19 February, the Afterpay share price was trading at $40.50 before sinking to $8.90 in March. However, Afterpay's current share price is now up by over 85% from its February high.
Whether the strong share price growth that Afterpay has experienced recently will continue over the following months is uncertain. However, I am growing increasingly confident about the company's long-term growth prospects. Afterpay appears to have cemented its position as one of the market leaders in the BNPL market, as this market continues to grow in popularity worldwide.
Audinate is an ASX tech share that doesn't have as high a market profile as Afterpay. But it has been quietly and successfully establishing its market presence over the past few years. Audinate utilises its audio networking solutions in the production of a range of professional audio equipment. Its core networking solutions improve audio quality and reduce the need for extra cabling and installation.
Audinate recently reported unaudited revenue of $30.3 million for the 12 months to 30 June 2020. Unaudited EBITDA came in at $2.0 million for FY20 and Audinate had $29.3 million cash on hand as at 30 June. I believe this was a very solid result in challenging market conditions.
I'm confident that Audinate is well poised for continued growth. Its core solution currently leads the audio market and I believe demand for its audio solutions will be robust over the next few years.
Afterpay and Audinate are 2 ASX tech shares that I believe are well placed to provide above average shareholder returns over the next 5 to 10 years. I would be happy to own either of them as part of a diversified ASX share portfolio.