Given the quality on offer, the tech sector has been tipped as a great place to look for buy and hold investment options.
But which ASX tech shares should you buy for the long term? Two to consider are listed below:
Altium Limited (ASX: ALU)
Altium is a leading electronic design software provider. The company’s software is used to design the complex circuit boards that you’ll find inside almost all electronic devices. Altium has a large number of blue chip customers using its platform. This includes BAE Systems, Dell, Microsoft, and NASA.
The good news for Altium is that due to the artificial intelligence and internet of things (IoT) booms, there has been a proliferation of electronic devices over the last decade. This rapid growth is expected to continue over the next decade, which should underpin growing demand for its award-winning software.
In fact, according to Statista, there were 22 billion IoT devices globally at the end of 2018. This is forecast to grow to 50 billion by 2030.
In light of this, it is no wonder that management is confident in its growth trajectory. So much so, it is targeting revenue of US$500 million by 2025-26. This will be a 150% increase on FY 2020’s revenue.
Analysts at Credit Suisse currently have an outperform rating and $35.00 price target on Altium’s shares.
Appen Ltd (ASX: APX)
Another tech share to buy and hold could be Appen. It appears very well positioned for long term growth thanks to both the increasing importance and spending on artificial intelligence.
In order for artificial intelligence models to work, they need to be trained to a high standard. This is where Appen comes in. Through its team of over one million skilled contractors around the globe, the company provides or prepares the training data for artificial intelligence models. It counts the likes of Amazon, Apple, Facebook, Google, and Microsoft as current and/or former customers.
The company also looks well-placed to benefit from increased spending on artificial intelligence by governments. This is thanks to its Figure Eight business, which has a long history of working in this sector.
And while COVID-19 has put a dampener on its growth this year, management expects to bounce back strongly once the crisis passes.
Analysts at Macquarie also appear confident that this will be the case and have just put an outperform rating and $27.00 price target on Appen’s shares.
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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 Altium. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.