Why I think these ASX tech shares are buys in August

August could be a good month to go hunting for technology businesses.

| More on:
A young woman with glasses holds a pencil to her lips as she is surrounded by the reflection of data as though she is being photographed through a glass screen project with digital data.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Technology businesses have certain advantages when it comes to their economics
  • One idea is the ASIA ETF which is invested in 50 Asian tech giants
  • Airtasker is a local services marketplace platform business

I believe there may be some leading ASX tech shares that could be opportunities in August (and beyond).

Technology businesses typically have inherent advantages. The intangible, or non-physical, nature of many tech offerings means that they can achieve high profit margins as well as grow quickly. They usually don't need to wait for a warehouse to be built or a piece of furniture to be shipped to achieve more growth.

In previous years, technology businesses had seen their valuations soar. That was partly due to record low interest rates.

With interest rates now rising in Australia, the US, and elsewhere, tech valuations now may be much more attractive.

I'm going to outline two ASX shares that could be good opportunities at the current price:

Betashares Asia Technology Tigers ETF (ASX: ASIA)

This is an exchange traded fund (ETF) that is based on getting exposure to the Asian tech sector.

It provides exposure to 50 of the largest Asian technology companies outside of Japan.

Some of the names in the portfolio that readers may have heard of include: Alibaba, Taiwan Semiconductor Manufacturing, Samsung Electronics, Tencent, Meituan, Infosys, JD.com, Netease, Pinduoduo, and SK Hynix.

The ASIA ETF has fallen by almost 30% since the beginning of 2022.

It's important to know that four countries represent almost the entire portfolio. At the end of June 2022, the ASX tech share had a weighting of 57.1% to China, 19.3% to Taiwan, 15.6% to South Korea and 7.2% to India.

A number of different sectors are represented within this ETF including 'internet and direct marketing retail', 'interactive media and services', semiconductors, and 'tech hardware, storage and peripherals'.

While there are certainly plenty of China-specific risks relating to the underlying businesses, the cheaper valuation could make up for that.

Airtasker Ltd (ASX: ART)

This ASX tech share describes itself as "Australia's leading online marketplace for local services, connecting people and businesses who need work done with people who want to work".

The Airtasker share price has seen an enormous fall during 2022. Currently, it's down more than 54% so far this year.

Yet, for a business that is growing quickly, I think this lower share price represents an attractive opportunity.

The company's latest quarterly update demonstrates how much growth the business is achieving.

For the three months to 30 June 2022, gross marketplace volume (GMV) went up 38.3% to $54.4 million and revenue grew by 30.6% to $9 million.

International GMV soared 112%. It reached a monthly annualised run rate of $9.5 million in May 2022.

In the US, its US marketplace saw quarterly posted task growth of 49% quarter on quarter.

Meantime, in the UK, it saw posted tasks soar 104% year on year.

The business said it's benefiting from inflation, with the average task price rising again to $237. The company's gross profit margin is exceptionally high at 93%.

I think the combination of a high gross profit margin and good double-digit growth of revenue is very promising for the long-term future if it can keep expanding in Australia, the UK, the US, and beyond.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

a man with a wide, eager smile on his face holds up three fingers.
Technology Shares

3 reasons to buy this resurgent ASX 200 tech stock today

A leading investment expert expects more growth ahead for this surging ASX 200 tech stock.

Read more »

Man controlling a drone in the sky, symbolising DroneShield share price.
Technology Shares

Why the Trump presidency looks bearish for DroneShield shares

This investing expert believes the Donald Trump presidency bodes ill for DroneShield shares.

Read more »

ASX 200 investor looking frustrated at falling share price whilst sitting at desk
Earnings Results

Why is this $15 billion ASX 200 stock falling so hard today?

The ASX 200 stock is under heavy selling pressure on Monday.

Read more »

a woman holds a facebook like thumbs up sign high above her head. She has a very happy smile on her face.
Technology Shares

Bell Potter just put a buy rating on this ASX 200 tech stock

The broker has very good things to say about this growing company.

Read more »

A woman researcher holds a finger up in happiness as if making the 'number one' sign with a graphic of technological data and an orb emanating from her finger while fellow researchers work in the background.
Technology Shares

2 exciting ASX 200 tech shares to buy in February

Analysts are tipping these tech stocks as buys this month. Let's see what they are saying about them.

Read more »

Accountant woman counting an Australian money and using calculator for calculating dividend yield.
Technology Shares

Which ASX 200 technology stock will pay the best dividend yield in 2025?

Earnings season is underway and dividend announcements are on investors' minds.

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Market News

Here's how the ASX 200 market sectors stacked up last week

ASX 200 technology stocks led the market with a 1.99% rise while the benchmark index slipped 0.24%.

Read more »

A man sits in casual clothes in front of a computer amid graphic images of data superimposed on the image, as though he is engaged in IT or hacking activities.
Technology Shares

2 ASX tech stocks to buy during an anticipated 15% to 20% sector pullback in 2025

Expert reveals 2 of his favourite tech stocks and at what prices we should buy them during a dip.

Read more »