Major share price volatility is continuing on the S&P/ASX 200 Index (ASX: XJO) and although there are positive signs for Australia in the battle against the coronavirus pandemic, the impact of continued restrictions on our local economy is likely to see a sharp drop in Australia's GDP for 2020.
I think that this is likely to translate to further ASX share price volatility in the coming months ahead. However, despite this, I believe there are still plenty of opportunities for investors with a long-term investment horizon.
I am particularly attracted to Australia's tech sector on the ASX. We have a growing number of exciting listed companies, many of which continue to grow strongly both locally and in overseas markets.
Below are two of my top picks right now. I believe both of these companies have strong long-term growth potential, with solid profit growth over the past few years and dominant and entrenched positions in a growing number of overseas markets.
Altium Limited (ASX: ALU)
Altium designs software that enables engineers to produce printed circuit boards (PCBs) for a broad range of devices, from computers to cars, and an increasing number of devices that make up the 'Internet of Things' (IoT). This is a rapidly growing sector, with the number of IoT devices expected to skyrocket over the next decade.
Altium continues to grow its profit margins as it expands internationally and also has a strong balance sheet. Its client list includes numerous global giants such as Amazon, Google, Apple and NASA.
In a recent market update, Altium reaffirmed that despite the challenges in the current global environment, it is continuing to close new sales and its sales pipeline continues to look solid at this point.
I believe that a fall in the Altium share price since mid-February provides investors with an opportunity to purchase shares in this tech company at a more favourable price.
Appen Ltd (ASX: APX)
Appen is the global leader in providing data for use in machine learning and artificial intelligence (AI).
The company continues to experience strong demand from some of the largest global technology firms. For example, Appen assists companies such as Apple and Google to train their virtual assistants like Siri in how to interact with people. This has translated into strong recent revenue growth, assisted by recent acquisitions.
In a recent market update, Appen revealed it is on target to achieve its guidance for FY 2020, despite the current global market challenges. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is predicted to be in the range of $125 million to $130 million, which would be a significant increase on its FY19 underlying EBITDA of $101 million.
I believe that Appen continues to remain well placed to achieve strong growth over the next 5 to 10 years due to the rapidly rising demand for AI products and machine learning markets.
