If you’re looking to take advantage of the weakness in the tech sector, then check out the two tech shares listed below.

Both of these ASX tech shares have been named as buys and tipped for strong growth in the future. Here’s what you need to know:

NEXTDC Ltd (ASX: NXT)

The first tech share that could be a buy is leading data centre operator, NextDC.

It has been tipped as a buy by analysts at Morgans. This is due to the broker’s belief that the company is well-placed for long term growth thanks to its strong market position, the industry’s significant barrier to entry, and its expansion opportunities.

Morgans commented:

We retain our Add recommendation and highlight that NXT remains our preferred pick given substantial structural growth, quality management, significant barrier to entry and, in our view, improving competitive advantage with regional/edge sites.

We see a clear pathway for long-term growth, substantially higher EBITDA and material free cash flow, over the medium term.

Morgans has an add rating and $13.01 price target on NEXTDC’s shares.

Readytech Holdings Ltd (ASX: RDY)

Another tech share that could be in the buy zone is Readytech. It provides enterprise software to several market verticals including higher education, HR, work pathways, and local government.

Analysts at Goldman Sachs are very positive on the company. This is due to its strong position in areas of the market that are under-served by large enterprise software competitors.

The broker explained:

In our view, RDY will continue to grow mid-teens organically while making accretive acquisitions (such as IT Vision), with profitability underpinned by solid software metrics including low churn at ~3% and high LTV/CAC.

RDY serves defensive end markets (e.g. higher education, local government) and has high recurring revenue (>85%) which should protect the company’s earnings profile in an economic downturn.

Goldman has a buy rating and $4.60 price target on Readytech’s shares.

The post Here are 2 fantastic ASX tech shares that analysts rate as buys appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Goldman Sachs names 2 mid cap ASX shares to buy
• NextDC share price tipped to rise 30%: Broker says high energy prices an ‘opportunity’
• Experts name 3 ASX growth shares to buy with enormous upside potential
• 2 ASX growth shares to buy this month: experts

Motley Fool contributor James Mickleboro has positions in NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd. 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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If you’re looking for some new growth shares to buy following the market weakness, then it could be worth considering the two ASX shares listed below.

Both of these ASX shares have been tipped as buys with major upside potential. Here’s what you need to know about them:

Allkem Ltd (ASX: AKE)

The first ASX growth share to look at is Allkem. It is a top five global lithium miner with a collection of world class operations.

Allkem is currently producing a significant quantity of lithium from its operations, which is allowing it to benefit greatly from sky high prices.

But it won’t be stopping there. Looking ahead, the company recently revealed plans to increase its production three times over by 2026. Management expects this to allow the company to maintain a 10% share of the global lithium market over the next decade.

Morgans is very bullish on Allkem. Earlier this month, the broker put an add rating and $16.38 price target on its shares. Its analysts like Allkem due to its “diverse products and geographical mix [which] adds opportunities to capture value as the market evolves.”

Megaport Ltd (ASX: MP1)

Another growth share that could be in the buy zone is Megaport. It is the leading global provider of elastic interconnection services.

Megaport’s software layer provides users with an easy way to create and manage network connections. Through the Megaport network, businesses can then deploy private point-to-point connectivity between any of the locations on Megaport’s global network infrastructure.

So, with the structural shift to the cloud continuing, the company appears well-placed to benefit from increasing demand and higher spending on enterprise networking.

Goldman Sachs is a big fan of the company and believes it has an enormous growth opportunity. The broker has a buy rating and $13.10 price target on its shares. Goldman estimates that the company’s “opportunity for further growth is immense [with] GSe A$129bn p.a. spent on fixed enterprise networking across MP1 geographies.”

The post Analysts say these ASX growth shares have huge upside potential appeared first on The Motley Fool Australia.

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More reading

• Why are ASX tech shares struggling today?
• Here are the top 10 ASX shares today
• Why these fundies say the Allkem share price is ‘absolutely a buy’
• 3 ASX lithium stocks this fund manager is holding despite sector pullback
• Guess which ASX 200 mining shares these experts are backing

Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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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The Flight Centre Travel Group Ltd (ASX: FLT) share price landed in the red on Tuesday. At the close of trade, it finished 2.28% lower at $17.97.

The dip extends Flight Centre’s losses to almost 12% during the past month of trade.

In broader market moves, the benchmark S&P/ASX 200 Index (ASX: XJO) finished 0.86% higher today to close at 6,763 points.

Let’s take a closer look at what might have been behind Flight Centre’s performance today.

Household cash flows to narrow

Investors sold the Flight Centre share price down today despite no news from the company. However, analysts at Swiss Investment bank UBS, led by George Tharenou, released a dire report on Australia’s economy.

It predicts household cash flows could tighten to their lowest on record in 2023 amid the plethora of cost pressures households now face, not in the least rising interest rates.

The UBS team reckons the Reserve Bank of Australia (RBA)’s recent decision to hike the cash rate by 50 basis points will hurt aggregate demand come 2023.

Essentially it says the decision – made in a bid to tackle inflation – will reduce the amount of disposable income households have at the end of each cycle.

From this, the report forecasts GDP will slump to less than 2% from 2022-23 while it’s expected unemployment will climb again to around 3%.

The UBS report said:

The recent rate hikes, plus more to come, will double household interest payments.

“[T]hat is the fastest rise on record, amid the highest household leverage in the world.

UBS analysts also said that the “transmission mechanism”, that is the impact, of the RBA’s hikes on borrowing rates and, hence, the economy is “the most direct in the world”.

Muted market response

Investors didn’t respond well to the news. Despite some early volatility, the Flight Centre share price traded relatively flat across the day.

Its performance was accompanied by a flood of selling in other consumer shares.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) weakened and finished 1.34% in the red, reversing an uptrend since 17 June in the process.

Flight Centre’s trading volume was up around its four-week average of 1.4 million shares, with investors swapping a total of one million shares during today’s session.

Flight centre share price snapshot

Flight Centre shares slipped from a three month high of $23 a share on 2 May to now trade near three-month lows.

In the last 12 months, the Flight Centre share price has clipped a 23.5% gain. However, it’s down marginally year to date, as illustrated below.

The post Flight Centre share price struggles amid dwindling household cashflows forecast appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• These are the 10 most shorted ASX shares
• These 2 ASX travel shares are tying the knot for the next 10 years
• Flight Centre share price stumbles amid ‘big blow’ from new tax
• ASX 200 travel shares take off again on Tuesday. Here’s why

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group 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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The Bubs Australia Ltd (ASX: BUB) share price finished the day 3% in the red at 62.5 cents apiece on Wednesday.

Investors sold off Bubs shares despite the company posting a sensitive update regarding its US retail footprint.

In broad market moves, the benchmark S&P/ASX 200 Index (ASX: XJO) closed the day 60 basis points higher at 6,746.

Bubs’ new Target deal

The company advised that it has entered into a new supply agreement with Target USA. It says Target is one of the largest infant formula retailers in the US.

“Target’s initial purchase order will be fulfilled from the third Operation Fly Formula air cargo shipment,
arriving in the U.S. on 26 June, with direct distribution to 280 Target stores,” the company announced.

Bubs says that gross revenue generated from this plane is to the tune of $3 million.

As a result of the deal, Bubs notes its products will be available in the 4 largest retailers of infant formula in the U.S. with coverage in 5,000 stores across 34 States [in the US].

Bubs Founder and CEO, Kristy Carr said the company was “delighted to enter a new partnership with Target”.

Since receiving the Enforcement Discretion from FDA to import six Bubs Infant Formula products on 27 May 2022, or less than a month ago, our products will be ranged in all four top retailers for infant formula in the USA. By mid-July, we expect over 360,000 tins of Bubs Infant Formula to have been made available to major retailers. This is an extraordinary outcome, thanks to our American sales team who have built a relationship with retailers over the last 12 months.

The market was mute to the news today and sold off shares in line with a weaker consumer defensives sector.

Volume was more than half of the 4-week trading average at 7.2 million shares.

In spite of the downside, the Bubs share price has still managed to clip a 36% gain in the last 12 months and 31% this year to date.

The post Bubs share price drops despite new Target deal appeared first on The Motley Fool Australia.

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More reading

• Where to find value in growth? Here are 2 ASX shares I’d buy in July
• Why ANZ, Block, Bubs, and PayGroup shares are pushing higher
• Bubs share price up 4% on further US update
• Why is the Bubs share price sinking 7% today?
• Why A2 Milk, Bubs, Evolution, and Zip shares are rising despite the selloff

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