I believe the Australian share market is home to a number of mid cap tech shares that have the potential to grow their earnings at a rapid rate over the next decade.
But which mid cap tech shares should you buy? Two that I rate highly are listed below. Here’s why I would buy them:
Megaport Ltd (ASX: MP1)
The first option to look at is Megaport. Due to its exposure to the cloud computing megatrend, I think it could be very well-placed for growth over the 2020s. It offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. In addition to this, its global platform allows customers to rapidly connect their network to other services across the Megaport Network. After which, users can then control their networks effortlessly via mobile devices, their computer, or its open API.
At the end of September, Megaport’s customer numbers reached 1,980, its total ports stood at 6,333, and its quarterly revenue grew to $17.3 million. The good news is that the company is still only scratching at the surface of an enormous global market opportunity. And thanks to its leadership position, I expect it to capture a big slice of its over the next decade.
Pushpay Holdings Group Ltd (ASX: PPH)
Another mid cap tech share to buy is Pushpay. I think the donor management and community engagement platform provider has the potential to grow at a strong rate for many years to come. This is thanks to its increasingly popular and high quality platform, which has been capturing a growing slice of the U.S. church market in recent years. This has underpinned very strong recurring revenues and even stronger operating earnings growth.
Looking ahead, management expects this strong form to continue in FY 2021 and is confident that another strong result is coming. It is guiding to the more than doubling of its operating earnings this year. Given the tailwinds it is experiencing from the shift to a cashless society and the digitisation of the church, I believe Pushpay will deliver on this guidance and then continue its growth throughout the 2020s.
Where to invest $1,000 right now
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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 and recommends MEGAPORT FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended MEGAPORT FPO and 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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