‘High growth rate’: 2 ASX tech shares you need to look at right now

tech asx share price represented by man wearing smart glassestech asx share price represented by man wearing smart glasses

Are 18 months of torture enough for ASX technology shares?

More than one expert reckons tech will have its day in the sun again as interest rates are nearing their peak. We might even see a rate cut in the next year or so!

If you’re on board with this theory, then these two ASX shares nominated as buys might interest you:

This stock ‘should be trading on higher multiples’

Singaporean software outfit Dropsuite Ltd (ASX: DSE) is one tech business that’s bucked the trend over the past couple of years.

Rather than seeing its share price tumble, Dropsuite shares have actually risen 6% since its November 2021 peak.

BW Equities equity salesperson Tom Bleakley knows exactly why the “cloud backup services and data protection” platform provider is going so well.

“Annual recurring revenue of $28.2 million in the first quarter of fiscal year 2023 was up 66% on the prior corresponding period and 11% on the previous quarter,” Bleakley told The Bull.

“With a high growth rate and a durable customer base, we believe Dropsuite should be trading on higher multiples.”

Being a $180 million small cap, the software maker is not widely covered by other professional investors.

But both the analysts currently surveyed on CMC Markets rate the tech stock as a strong buy.

An oldie but a goodie

Meanwhile, Shaw and Partners senior investment advisor Jed Richards is loving the look of an old favourite.

The Xero Limited (ASX: XRO) share price has climbed more than 31.7% year to date, thanks to the new chief executive’s promises of transitioning the business from a hyper-growth to a profit-making phase.

“The company dominates market share and has a solid growth pipeline,” said Richards.

The macroeconomic signs are also favourable for the long-term health of Xero shares from here.

“Central banks may be nearing the end of interest rate tightening, as inflation shows signs of cooling,” Richards said.

“Consequently, expect a brighter outlook for the high-growth technology sector.”

Despite the rally this year, Xero shares are still down in excess of 40% since the November 2021 peak.

The post ‘High growth rate’: 2 ASX tech shares you need to look at right now appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Tony Yoo has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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