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Top ASX tech shares to buy in October 2020

asx tech shares for october represented by digitised jack o lanterns on tv, laptop and tablet screens
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Along with our Top ASX Stock Picks for October, we also asked our Foolish writers to pick their favourite ASX tech shares to buy this month.

Here is what the team have come up with…

Chris Chitty: Envirosuite Ltd (ASX: EVS)

My tech share for October is Envirosuite Ltd. Envirosuite is an environmental consulting company that helps its clients to manage their effect on the environment. This company provides software as a service (SaaS) which assists companies to measure and control their environmental outputs.

As various types of pollution become bigger issues over time, I expect Envirosuite to reach more of its $2.3 billion addressable market. Envirosuite has forecast it will reach $100 million in revenue by 2023 and I think it has a lot of potential for growth.

Motley Fool Contributor Chris Chitty does not own shares of Envirosuite Ltd.

Glenn Leese: ELMO Software Ltd (ASX: ELO)

Elmo is a software-as-a-service (SaaS) company providing cloud-based human resources (HR) and payroll solutions to clients in Australia, New Zealand and the United Kingdom. The software applications it creates are extensive and include specialist areas such as onboarding, performance management, rostering, e-learning and all aspects of payroll.

Elmo currently delivers solutions to over 1,400 organisations and is growing. This week, the ASX tech share announced an acquisition of UK-based human resources platform Breathe. The purchase brings Elmo an additional 6,700 clients. It also allows Elmo to launch Breathe in the Australian and New Zealand markets. Breathe has been growing its subscription revenue steadily each year. The announcement drove the Elmo Software share price up almost 20% in two days. 

Motley Fool Contributor Glenn Leese does not own shares of ELMO Software Ltd.

Daryl Mather: Vection Technologies Ltd (ASX: VR1)

Over the past month, the Vection Technologies share price has blasted upwards by 167% (at the time of writing). In year-to-date trading, it has grown by 700%. This company has built a technology, FrameS, that allows people to engage with 3-dimensional models in virtual reality. It takes previously created models from software such as CAD or others and provides an immersive experience for up to six remote users.

Applications for the technology include interior design, design review of industrial projects, exhibiting products remotely, and even training. I think the potential for this product is immense in the housing and industrial fields alone.

Motley Fool contributor Daryl Mather does not own shares of Vection Technologies Ltd .

Tristan Harrison: Pushpay Holdings Ltd (ASX: PPH) 

One of the best reasons to like tech shares is how scalable they are. Once the technology has been developed, new revenue can significantly add to profit.  

Pushpay’s economies of scale are an example of this. In FY20, the company grew its gross margin from 60% to 65% and its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin grew from 17% to 22%. That came from a revenue increase of US$31.4 million to US$129.8 million.  

The ASX tech share is aiming for US$1 billion from the large and medium US church sector. I believe there is potential for plenty more growth.  

Motley Fool contributor Tristan Harrison does not own shares of Pushpay Holdings Ltd.

Aaron Teboneras: Appen Ltd (ASX: APX) 

Appen has performed strongly this year due to its leading market position and ongoing demand for its services. Artificial intelligence is forecasted to double over the next four years, growing from US$50.1 billion to more than US$110 billion in 2024. 

Despite achieving 25% revenue growth in its FY20 results, the Appen share price is trading more than 17% below its all-time high (at the time of writing). In light of this, I think the Appen share price is a bargain and rate it as a top ASX tech share to buy in October. 

Motley Fool contributor Aaron Teboneras own shares in Appen Ltd.

Sebastian Bowen: Domino’s Pizza Enterprises Ltd (ASX: DMP)

Domino’s probably isn’t an ASX share that springs to mind when you think of ‘tech’. But this innovative fast food company is, in my view, one of the best examples of harnessing technology on the ASX. The company has managed to grow its sales almost exponentially over the past decade, both in Australia and abroad. And high-tech innovations like live delivery tracking and even drone delivery trials have helped this trend.

Domino’s has also been using tech to thrive amidst the pandemic. It’s quickly-implemented ‘zero-contact’ delivery and pick up which is, no doubt, partially behind the company’s 20.4% surge in online orders in FY2020. Summing up, Domino’s is a tech player I would be more than happy to take a slice of right now.  

Motley Fool contributor Sebastian Bowen does not own shares of Domino’s Pizza Enterprises Ltd.

Brendon Lau: Xtek Ltd (ASX: XTE)

I believe defence tech is an overlooked sector, with many investors distracted by the buy now, pay later (BNPL) revolution. But globally, defence spending is trending up and this is expected to continue given the rise in geo-political tensions.

Xtec is well placed to capitalise on this growth as it commercialises its bullet proof composite technology. It also provides drones to the Australian Defence Force. Furthermore, I believe this defensive-growth stock is cheap as it has been sold off following its capital raising.

Motley Fool contributor Brendon Lau owns shares of Xtek Ltd.

James Mickleboro: Audinate Group Ltd (ASX: AD8)

I think Audinate is an ASX tech share that could provide strong returns for investors over the long term. It is an industry-leading, digital audio-visual networking technologies provider. The company has been growing at a very strong rate in recent years thanks to the increasing demand for its flagship product, Dante.

Dante is an award-winning, audio over IP networking solution which is dominating the industry. It is used widely across the professional live sound, commercial installation, broadcast, and recording industries globally. While the pandemic has stifled its growth, I am very confident it will accelerate again once the crisis passes.

Motley Fool contributor James Mickleboro does not own shares of Audinate Group Ltd.

Daniel Ewing: 4DMedical Ltd (ASX: 4DX)

4DMedical is a medical imaging company that specialises in lung diagnostics. The Melbourne-based company is seeking to push aside existing imaging methods which it considers obsolete. 4DMedical targets the huge respiratory diagnostic sector, which is estimated to be worth over US$31 billion per annum.

Furthermore, the company has experienced strong tailwinds from COVID-19 which is, in essence, a lung disease. I believe if this ASX tech share can execute on its goals and follow in the footsteps of fellow Australian imager, Pro Medicus Limited (ASX: PME), then growth will follow.

Motley Fool contributor Daniel Ewing owns shares of 4DMedical Ltd.

Bernd Struben: Carsales.Com Ltd (ASX: CAR)

Carsales.com owns and operates Australia’s largest online automotive and marine classifieds business. After losing 45% during the coronavirus sell-off, the Carsales share price has gained 113% since 23 March. It’s currently at record highs. But I believe Carsales has significant further upside potential.

Firstly, it stands to benefit from the latest budget. Tax write-offs should drive an increase in vehicle purchases by businesses, while tax cuts and other stimulus should see households buy more vehicles too. Secondly, with the virus putting people off public transport, the generational shift away from cars looks to be over…for now.

Motley Fool contributor Bernd Struben does not own shares of Carsales.Com Ltd.

These 3 stocks could be the next big movers in 2020

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

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’.

*Returns as of 6/8/2020

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software and Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended AUDINATEGL FPO, carsales.com Limited, Domino's Pizza Enterprises Limited, Elmo Software, and Pro Medicus Ltd. 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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