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Should you buy Appen (ASX:APX) and Pushpay (ASX:PPH) shares after the tech selloff?

digital screen of bar chart representing asx tech shares
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The tech sector has been uncharacteristically out of form in recent months following weakness on Wall Street’s Nasdaq index.

While this is disappointing if you’re already a shareholder of these tech companies, I see it as a big gift to non-shareholders.

The two ASX tech shares listed below, for example, are down heavily from their 52-week highs. I feel this could be a great entry point for a long-term focused investment. Here’s why:

Appen Ltd (ASX: APX)

The Appen share price is down over 25% from the 52-week high it reached just under a month ago. This means that the artificial intelligence services company’s shares are now changing hands at 37x estimated FY 2022 earnings. While this is still a premium to the market average, I think it is more than fair given its positive long term growth outlook.

Due to its leadership in the data preparation market for machine learning and artificial intelligence, I believe it is well-placed to continue delivering strong earnings growth over the 2020s. Last month IDC forecast spending on artificial intelligence to double in four years to US$110 billion. That’s a compound annual growth rate of 20.1% for the 2019 to 2024 period. It commented: “Companies will adopt AI — not just because they can, but because they must.” This bodes well for Appen.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price has bounced back recently but is still trading approximately 14% lower than its 52-week high. I think this has left it trading at a very attractive level for investors that are looking for buy and hold options.

Pushpay is a leading donor management and community engagement platform provider for the church market. Although this is a niche market, it certainly is a very lucrative one. Management is aiming to win a 50% share of the medium to large church market, which it estimates to be worth US$1 billion a year in revenue at present. Given the quality of its platform and the shift to a cashless society, I feel very confident it will achieve its goals.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

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In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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