The tech sector is roaring again at last!
Investors have been flooding back into this side of the market this week, driving ASX tech shares higher.
The good news is that it's not too late to add some tech exposure to your portfolio. Listed below are two ASX tech shares that Morgans rates very highly:
Megaport Ltd (ASX: MP1)
The first ASX tech share that Morgans is tipping as a buy is Megaport. It is the leading network as a service provider with a clear first mover advantage. Morgans believes that recent weakness in its share price means the risk/reward on offer with its shares is compelling. It commented:
MP1 is the world leader in Network as a Services (NaaS). They have first mover advantage, scale and technical expertise which means they are well placed to grow rapidly and maintain a healthy competitive advantage. We have always been long term bulls on MP1 but more recently thought expectations were too high and that this made for poor risk/reward. Consensus revenue and EBITDA growth in FY23 now looks reasonable to us. With the risk of multiple compression now hopefully behind us, fundamentals will once again matter. Quality tech can grow regardless of weak economic conditions.
Morgans has an add rating and $8.25 price target on the company's shares.
NextDC Ltd (ASX: NXT)
Another ASX tech share that Morgans has named as a buy is NextDC. The broker believes the data centre operator is well-placed for growth thanks to the structural shift to the cloud and its new developments. It explained:
NXT should deliver another good set of results in FY23 with some upside risk to guidance, in our view. Structural demand for cloud and colocation remains incredibly strong. NXT's new S3 and M3 data centres are now open. Consequently, we expect significant new customer wins over the next six-to-twelve months (including CSP options being exercised). Sales should drive the share price higher. NXT looks comfortably on-track to generate over $300m of EBITDA in the next three to five years.
Its analysts have an add rating and $13.30 price target on NextDC's shares.
