If you're interested in adding some growth shares to your portfolio, then the two listed below could be top candidates.
Both these ASX growth shares have been named as buys and tipped to generate strong returns for investors. Here's what you need to know about them:
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Allkem Ltd (ASX: AKE)
The first growth share to look at is lithium miner Allkem. Thanks to its world class portfolio of lithium operations and projects across different geographies and product types, it has been tipped to grow strongly over the coming years.
Particularly given its production growth potential and the strong prices that lithium is commanding due to insatiable demand for battery materials.
Morgans is very positive and sees a lot of value in Allkem's shares despite their strong gain over the last 12 months.
The broker recently said: "AKE has been a strong performer in recent weeks but we continue to see long term valuation upside with persistent tightness in the lithium market. […] We don't think spot prices are likely to remain at current levels forever but we think there is still plenty of scope for contract prices to increase further before settling down into a long term average."
Morgans has an add rating and $16.98 price target on Allkem's shares.
TechnologyOne Ltd (ASX: TNE)
Another ASX growth share to look at is enterprise software provider TechnologyOne. It is currently in the process of shifting to become a software-as-a-service (SaaS) focused business.
The good news is that this shift is going well, with management recently reiterating its belief that it will almost double its annual recurring revenue (ARR) to $500 million by FY 2026.
Analysts at Goldman Sachs suspect that TechnologyOne could even outperform this target, noting that the risks are now to the upside.
It said: ""In our view, TNE is well-placed to meet its A$500mn FY26 ARR target and we are more constructive than consensus and the market (as implied by TNE's current share price). SaaS flip uplift, elevated inflation (via contractual CPI pass-through) and underlying business growth underpin our A$505mn FY26 ARR estimate, and we think risks are skewed to the upside with our estimates assuming modest organic growth ex-flip (~10%)."
Goldman initiated coverage on the company last week with a buy rating and $14.00 price target.
