2 ASX tech shares Goldman Sachs rates as buys

These tech shares are buys according to Goldman Sachs…

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If you’re looking to take advantage of the weakness in the tech sector in 2022, then you may want to look at the two ASX tech shares listed below.

These shares have been given buy ratings by the team at Goldman Sachs. Here’s why it rates them highly:

Nitro Software Ltd (ASX: NTO)

The first ASX tech share to look at is Nitro Software. It is aiming to drive digital transformation in organisations around the world with its Nitro Productivity Suite.

Nitro’s suite provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution.

Goldman Sachs is a big fan of Nitro. It currently has a buy rating and $2.35 price target on its shares. This is based on the broker’s belief that it can grow materially over the next couple of decades.

It commented: “We estimate Nitro can increase its TAM penetration from 0.15% to 1.4% by FY40 implying 9x uplift to Nitro’s current revenue base.”

Xero Limited (ASX: XRO)

Another ASX tech share that Goldman Sachs is very bullish on is Xero.

Xero is a provider of a cloud-based business and accounting solution to small and medium sized businesses. It has a strong position in the ANZ and UK markets and a growing presence in other markets including the United States.

The company has been growing strongly over the last few years and has been tipped to continue this trend in the coming years by Goldman. This is being supported by its international expansion, acquisitions, the transition to the cloud, price increases, and its burgeoning app ecosystem.

Goldman currently has a buy rating and $118.00 price target on Xero’s shares.

Its analysts are forecasting a 26% increase in revenue to NZ1,387.1 million in FY 2023. After which, it expects revenue to grow to NZ$1,680.2 million in FY 2024 and then NZ$1,975.8 million in FY 2025.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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