One thing the Australian share market is not short of is tech shares growing at a strong rate.
Two tech shares which have been tipped to grow strongly in 2021 and beyond are listed below. Here's what you need to know about them:
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NEXTDC Ltd (ASX: NXT)
NEXTDC is a leading data centre-as-a-service provider with a growing network of centres in key locations across Australia. The company has been an exceptionally strong performer this year thanks to the pandemic accelerating the shift to the cloud.
This has led to a significant increase in demand for capacity in its data centre and underpinned strong sales and operating profit growth. It also meant that management had to bring forward its capacity expansion plans. But NEXTDC certainly isn't resting on its laurels and is now looking overseas to boost its growth. It recently opened up offices in Tokyo and Singapore with a view of expanding into these markets in the future.
One broker that is positive on its future is Morgan Stanley. Late last month its analysts put an overweight rating and $14.60 price target on its shares.
Xero Limited (ASX: XRO)
Xero is a leading cloud-based business and accounting software provider. Thanks to its evolution into a full service small business solution over the last few years, the company has been growing its customer numbers and recurring revenues at a rapid rate.
For example, in the first half of FY 2021, Xero reported a 21% increase in operating revenue to NZ$409.8 million and a 15% lift in annualised monthly recurring revenue (AMRR) to NZ$877.6 million. It generated this from its 2.45 million subscribers.
The good news is that due to the quality of its offering, the shift to the cloud, its global market opportunity, and burgeoning app ecosystem, Xero has been tipped for more of the same in the future. Goldman Sachs believes Xero can achieve a 2030 subscriber footprint of 7.4 million and generate NZ$3.4 billion in annual revenue.
It is because of this that the broker has a buy rating and $157.00 price target on its shares.
