With the S&P ASX All Technology index down materially since the start of the year, a number of high quality shares are trading at sizeable discounts to recent levels.
According to analysts, this may have created a buying opportunity for long term focused investors.
Two ASX tech shares that could be in the buy zone now are listed below. Here's what you need to know:
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Altium Limited (ASX: ALU)
This leading electronic design software provider could be a top option in the tech sector. Especially with its shares down 26% in 2022.
Altium is the company behind the Altium Designer and Altium 365 platforms, the NEXUS design collaboration platform, and the Octopart electronic parts search engine. These platforms are used by some of the biggest businesses and organisations in the world. This includes giants such as Boeing, Microsoft, NASA, and Tesla.
Over the coming years, Altium is aiming to go from leading the electronic design market to dominating it. The company is targeting 100,000 subscribers and revenue of US$500 million by 2026. If it does deliver on this target, it should be supportive of strong earnings growth over the 2020s.
Bell Potter is positive on Altium. It recently put a buy rating and $41.25 price target on the company's shares. Based on the current Altium share price, this implies potential upside of 25%.
Megaport Ltd (ASX: MP1)
Another ASX tech share that could be in the buy zone is this leading cloud connectivity and networking solutions provider. Its shares were hammered last week and are now down by over 50% since the start of the year.
The team at Citi believes this is a buying opportunity for investors. While the broker was disappointed with Megaport's quarterly update, it remains positive on the long term. This is due to the structural shift to the cloud and particularly "demand for multi-cloud connectivity."
In light of this, the broker has retained its buy rating with a price target of $16.60. Based on the Megaport share price of $9.04, this suggests there is potential upside of almost 84% for investors over the next 12 months.
