Once again in 2020 the information technology sector is outperforming the S&P/ASX 200 Index (ASX: XJO).

Since the start of the year, the S&P/ASX 200 information technology index has fallen just 1.8%. This compares to a decline of over 19% by the benchmark ASX 200.

Due to the quality and growth potential of many companies in the tech sector, I expect this outperformance to continue throughout the 2020s.

In light of this, I think having exposure to the tech sector would be a very good thing for a portfolio.

But which tech shares should you buy? Three top tech shares I would buy right now are listed below:

Appen Ltd (ASX: APX)

Appen is the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence. It creates the data that goes into the machine learning models of many of the biggest tech companies in the world. Demand for its services has been growing strongly in recent years due to the increasing importance of artificial intelligence for businesses. This certainly was the case in FY 2019, with Appen smashing expectations with a 42% increase in underlying EBITDA to $101 million. Similarly strong growth is expected again this year and, thanks to the expected increase in spending on machine learning and artificial intelligence over the next decade, I feel it is well-placed to continue its strong form for many years to come.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a fast-growing donor management system provider. The New Zealand-based company’s system includes donor tools, finance tools, and a custom community app which are being used widely in the faith sector in the United States, Canada, Australia, and New Zealand. Demand for its solutions has been growing strongly, even during the coronavirus pandemic. This led to Pushpay delivering a 1,506% increase in EBITDAF to US$25.1 million. The good news is that more strong growth is expected in FY 2021, with management providing guidance for a 91.2% to 107% year on year EBITDAF increase. But it won’t stop there. Pushpay is targeting a 50% share of the medium and large church market in the future. This represents a US$1 billion opportunity and is many times more than the US$127.5 million revenue it posted in FY 2020.

Xero Limited (ASX: XRO)

Another top tech share to consider buying with a long term view is Xero. It is a leading business and accounting software provider which has been growing its market share at a rapid rate over the last few years. This has been driven by the increasing popularity of its high quality software and its expansion globally. The good news is that with less than 20% of the global (English-speaking) addressable market estimated to be using cloud accounting software, it still has a significant runway for growth.

More reading

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• 3 star ASX shares to buy for the rest of 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Appen Ltd and Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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With the share market still down materially from its highs, I believe there are ample opportunities for investors with a long term focus.

Three top growth shares which I think could be market beaters over the next five years are listed below. Here’s why I would invest $3,000 into them:

Aristocrat Leisure Limited (ASX: ALL)

I think the recent share price weakness experienced by Aristocrat Leisure’s shares has brought it down to a very attractive level for a long term investment. The gaming technology company’s performance this year will inevitably be impacted by the closure of casinos globally because of the pandemic. But once the crisis passes I don’t think it will be long until demand for its poker machines increases again. In the meantime, the company’s Digital business is likely to be benefiting greatly from these closures and lockdowns. In FY 2019 the segment delivered revenue of $1.23 billion and $370 million segment profit from its 7.5 million daily active users.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another good option for investors to consider buying is Domino’s Pizza. Its shares haven’t fared too badly during the pandemic because of the increasing consumption of its pizzas due to restaurant closures and lockdowns. However, they are still trading 14% lower than their 52-week high. I think this could be a buying opportunity due to its positive long term growth outlook. Over the next five years the company is aiming for solid like for like sales growth and the expansion of its global store network by 7% to 9% per annum. Combined, this should lead to strong earnings growth over the period. 

Zip Co Ltd (ASX: Z1P)

Finally, although the Zip Co share price gained almost 50% last week, it is still down 44% from its 52-week high. I think this could be a buying opportunity for investors that are looking for buy and hold options. There had been concerns that Zip Co’s business model might struggle if trading conditions deteriorated materially, but this hasn’t proven to be the case. Last week it revealed that at the height of the pandemic in April, it delivered an 86% jump in monthly transaction volume to $181.6 million. Another big positive was that its net bad debts came in at just 1.99%. I’m optimistic its strong growth can continue for some time to come thanks to new verticals, its international expansion, and the growing popularity of the payment method.

More reading

• These are the star ASX shares of the week
• Federal Government outlines 3-step plan to reopening Australia
• Why ASX payments shares might be the biggest winners of the 2020s
• Afterpay competitor Zip Co rockets higher after reporting 86% increase in April volumes
• Why Harvey Norman, Propel, REA Group, & Zip Co are charging higher

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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One area of the market that I think has a large number of top long-term options for investors to consider buying is the mid cap space.

Three mid cap shares which I believe could generate strong returns for investors over the next decade are listed below. Here’s why I like them:

Bravura Solutions Ltd (ASX: BVS)

The first mid cap share to look at is Bravura Solutions. It is a fintech company providing software and services to the wealth management and funds administration industries in the Asia, Europe, Middle East, and Africa regions. The company has a number of different products in its portfolio which combined appear to have positioned it for strong long term growth. The key product for me is the Sonata wealth management. It is used by many large financial institutions to connect and engage with their clients anytime, anywhere, via computers, tablets or smartphones.

Jumbo Interactive (ASX: JIN)

Jumbo is an online lottery ticket seller and the operator of the Oz Lotteries website. Its shares have pulled back materially in recent months due to concerns over its slowing growth. However, it is worth noting that this has been caused by the company’s investment in its future growth and is only expected to be temporary. As a result, I believe its shares have been oversold and are now trading at an attractive level. Especially when you consider that Jumbo is aiming to generate $1 billion in ticket sales annually through its platform by FY 2022. This will be triple what it achieved in FY 2019.

Megaport Ltd (ASX: MP1)

A final mid cap share to consider is Megaport. It is an elasticity connectivity and network services company. Its service allows users to increase and decrease their available bandwidth in response to their own demand requirements. This is instead of being tied to fixed service levels on long-term and expensive contracts. Due to the popularity of its service, its growing footprint in data centres globally, and the seismic shift to the cloud, it has been growing at a rapid rate in recent years. And given that larger and larger amounts of computer infrastructure continue to move from local servers to cloud providers, Megaport appears well-placed to continue its strong form in the 2020s.

More reading

• Where to invest $2,500 in the ASX for strong long term returns
• These All Ords shares have just hit 52-week highs or better
• Market close: ASX 200 finishes 0.4% lower
• 3 exciting ASX tech shares to buy and hold in the 2020s
• 2 top ASX growth shares to buy this week

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd and MEGAPORT FPO. The Motley Fool Australia has recommended Bravura Solutions Ltd, Jumbo Interactive Limited, and MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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