Are you looking for outsized returns? Well, Bell Potter has just named one rapidly growing ASX tech stock as a buy with major upside potential.
In fact, it thinks this stock could double in value in a year.
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Which ASX tech stock?
The stock that Bell Potter is recommending to investors with a high tolerance for risk is Adveritas Ltd (ASX: AV1).
Adveritas is a technology company that develops software solutions for enterprise customers to help maximise the return on digital ad spend.
Its key product is TrafficGuard, which is a SaaS platform that detects and intercepts fraudulent traffic in real time. This enables advertisers to reduce wasted ad spend and optimise their budgets.
Bell Potter was pleased with the company's trading update, which revealed another increase in annualised recurring revenue (ARR). It said:
Adveritas released a trading update and the key points were: 1. ARR has reached US$16.3m which is up 8% in c.2 months since end of March; 2. Most of the new ARR has been outside the traditional sports and gaming market and has been both from US-based partnerships and customers in the agency, e-commerce and retail verticals; 3. SME self-serve platform is rapidly scaling through organic growth with 652 signups, 250 account connections and 54 billable accounts; and 4. Growing use of AI is increasing demand for Adveritas' solutions as AI-driven bot fraud expands the scale of the problem and so the addressable market.
In response to the update, the broker has upgraded its estimates for FY 2026. It explains:
We were forecasting ARR of $16.5m at the end of FY26 so the company is already almost at that mark and there is still just over a month to go in the financial year. We have, therefore, upgraded our ARR forecast by 3% to $17.0m at year end though still see potential for this to be exceeded.
Shares tipped to double
According to the note, the broker has retained its buy rating and 18 cents price target on the ASX tech stock.
Based on its current share price of 8.4 cents, this implies potential upside of approximately 115% for investors over the next 12 months.
Bell Potter thinks concerns that a capital raising will be needed are unnecessary given that the company is on the cusp of being cash flow positive. It concludes:
The next potential catalyst is the release of the Quarterly Activities Report in late July where we expect the year end ARR to be provided. Another potential catalyst is confirmation by the company that it expects to be EBITDA and/or cash flow in FY27. Admittedly there is perhaps some perception that the company is cum raise with cash of only $6m at the end of March but a cash flow positive outlook will potentially dispel or at least dilute that thinking.
