The S&P/ASX 200 Index (ASX: XJO) is on the verge of breaking out of its 5725 to 6200 point trading range. The job centric federal budget, recovery of United States president Donald Trump and additional stimulus packages, not just in the US but globally, could push the markets even higher. Here are 2 ASX 200 tech shares that I wouldn't want to miss if the market rallies.
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2 ASX 200 tech shares I'm keeping a close eye on
1. Pointsbet Holdings Ltd (ASX: PBH)
The PointsBet share price jumped an eye watering 80% following the announcement of its partnership with NBCUniversal last month. The company's share price has held its ground amidst a volatile market in September and in light of a significant A$303 million capital raising at $6.50 per share to fund its NBCUniversal partnership.
The US sports betting landscape continues to evolve in favour of the PointsBet business. Illinois, for example, with its six retail sportsbooks and three online platforms generated a combined handle of nearly US$140 million, according to the Illinois Gaming Board. This US$140 million more than doubled the combined US$61.7 million handle it reported in the months of March, June and July.
The PointsBet business continues to stay on its feet with the announcement of a sportsbook content deal with Genius Sports Group, becoming the first sports betting operator in the US to adopt streaming on its app. PointsBet will add thousands of live streams across a variety of sports and geographies, complete with official data-powered in-game pricing for every match. This type of innovation in a young market and the company's first mover advantage could better position PointsBet against larger US bookmakers such as Draft Kings and Fan Duel.
Morgan Stanley and JP Morgan estimate that the US sports betting and iGaming market will balloon to a potential combined 2025 market of US$12 billion. This is a significant revenue opportunity and PointsBet is positioned front and centre to take its bite.
2. Tyro Payments Ltd (ASX: TYR)
Tyro is Australia's largest EFTPOS provider outside of the big four banks, providing tailored EFTPOS, business loans and banking solutions that support over 32,000 Australian businesses. Beyond credit, debit and EFTPOS card acquiring, it also offers Medicare and private health fund claiming and rebating services.
I believe Tyro represents a comeback story following a very challenging year, particularly for its merchants with the impact of COVID-19 and bushfires. For the first half of the year, transaction values were up 30% over 1H19. This momentum continued into January and February 2020 with year-to-date transaction value growth up to February 2020 lifting 29% over the comparable period. However, the introduction of mandatory lockdowns across Australia from mid-March, saw its overall transaction value growth rate moderate back to 15% for the full year. This translated to an 11% increase in revenue to $210.7 million.
The anticipated relaxation of lockdown measures in Victoria could be a catalyst for an improvement in the Tyro share price and its transaction volumes. Furthermore, this ASX tech share has made significant strides into additional fintech enabled business solutions. These include the release of new banking products such as a merchant cash advance as a loan offering for all Tyro merchants, a pilot of a new term deposit account for Tyro merchants, a payment and rebating solution for health practitioners and least cost routing to reduce costs for merchants.
