One area which has been tipped as a place to invest for the long term is the tech sector.
This is because this sector is filled with companies that have the potential to grow significantly in the future.
Two ASX tech shares to look at are listed below. Here's why they might be long term buys:
Afterpay Ltd (ASX: APT)
The first ASX tech share to consider is Afterpay. It is a payments company that has been growing at a rapid rate over the last few years. This has been driven by the growing popularity of the buy now pay later payment method with consumers and retailers and its successful international expansion.
Pleasingly, this strong growth has accelerated in FY 2021 thanks to the shift to online shopping because of the pandemic. This appears to have positioned the company perfectly for another blockbuster result this year.
Looking ahead, Afterpay will soon release banking products such as transaction accounts. There is also speculation that it won't stop there and could even expand into other products such as mortgages in the future. This has the potential to be a real threat to the banks and be another key driver of future growth.
Analysts at Bell Potter are confident on its future. According to a recent note, the broker has retained its buy rating and lifted its price target on Afterpay's shares to $168.50.
Audinate Group Limited (ASX: AD8)
At the small end of the tech sector you will find Audinate. It is a digital audio-visual (AV) networking technologies provider which was delivering impressive sales growth over the last few years prior to the pandemic.
This was thanks to its Dante product, which replaces all audio connections with a computer network. It then effortlessly sends hundreds of channels of audio over slender ethernet cables with perfect digital fidelity.
Dante is the clear market leader. In fact, Dante has eight times as many enabled devices as its nearest rival. The company is now aiming to do the same with the visual side of the market and has a growing team of experts in the UK.
One broker that is positive on Audinate is Morgan Stanley. It is happy with its recovery since the height of the pandemic and notes that Audinate had a record-breaking second quarter. This was particularly pleasing given how many of its customers are still facing COVID headwinds. The broker has an overweight rating and $9.00 price target on the company's shares.
