If you are looking to take advantage of recent weakness in the tech sector, then it could pay to listen to what analysts are saying this week, courtesy of The Bull.
That's because three ASX 200 tech shares have just been named as buys. Let's see what they are recommending:
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Aristocrat Leisure Ltd (ASX: ALL)
The team at Catapult Wealth thinks that Aristocrat Leisure could be an ASX 200 tech share to buy this week.
It believes that AI disruption concerns are overblown and have created a buying opportunity for investors. It explains:
Aristocrat makes and distributes slot machines and is a major player in online casinos. Aristocrat's share price has fallen considerably this calendar year, driven partly by the fear of artificial intelligence (AI) competition and currency related issues. While AI does increase the risk of competition via new entrants, particularly in the online space, the highly regulated nature of the industry provides some protection for Aristocrat.
We believe any risk to Aristocrat's position is overblown, and this weakness presents an opportunity to buy a company with a strong history of earnings growth at the lower end of its historic multiples range.
Life360 Inc (ASX: 360)
Analysts at Bell Potter have named location technology company Life360 as a tech share to buy now.
The broker believes that its shares offer an attractive risk-reward profile at current levels. Bell Potter explains:
This information technology company provides a mobile networking safety app for families. The company offers a compelling growth story driven by its unique position at the intersection of safety, connectivity and subscription-based monetisation. With accelerating premium subscriber growth alongside improving unit economics, the company continues to benefit from strong engagement and pricing power.
The integration of hardware and software ecosystems provide options for further monetisation, while operating leverage is beginning to emerge. Given strong top line momentum, expanding margins and the recent sell-off in line with the broader technology sector, Life360 presents an attractive risk-reward profile, particularly at current levels.
Xero Ltd (ASX: XRO)
Bell Potter has also named cloud accounting platform provider Xero as an ASX 200 tech share to buy.
The broker thinks that AI disruption fears are unwarranted and that recent share price weakness has created a buying opportunity for investors. It commented:
This accounting software provider remains a high quality business, underpinned by strong subscriber growth and increasing average revenue per user through product expansion. Xero continues to improve operating leverage as the business scales up globally, with margins expected to expand in response to cost discipline. Importantly, Xero is transitioning from a growth-at-all-costs model to one focused on profitability and cash generation, which should support a re-rating in valuation.
With a large addressable small-to-medium sized market and increasing penetration of digital accounting, Xero is well positioned to deliver sustained double-digit earnings growth. Near term catalysts include further margin upgrades and continued execution across key regions. We believe concerns related to the impact of artificial intelligence are overblown, and the share price sell-off presents a compelling buying opportunity.
