The selloff in the tech sector has been very disappointing for investors. However, every cloud has its silver lining. In this case, the cheaper prices is the silver lining.
Two ASX tech shares that are trading significantly lower than their 52-week highs are listed below. Here's why now could be an opportune time to make a patient long term investment in their shares:
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Altium Limited (ASX: ALU)
The first ASX tech share to look at is this printed circuit board (PCB) focused electronic design software provider. Especially with the Altium share price now down 36% from its 52-week high.
Altium appears well-positioned for long term growth thanks to its industry-leading platform and a number of tailwinds which are underpinning ever-increasing demand for electronic design software. These tailwinds include the rapidly growing artificial intelligence and internet of things markets, which are leading to a proliferation of electronic devices globally.
One broker that believes the recent weakness in the Altium share price is a buying opportunity is Citi. Last month its analysts upgraded the company's shares to a buy rating with a $33.50 price target.
Appen Ltd (ASX: APX)
Another ASX tech share to look at is Appen. The shares of the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence have come under significant pressure in recent months. This has been caused by both the selloff in the tech sector and its underperformance due to COVID-19.
The selling has been so severe that the Appen share price is down 61% from its 52-week high.
However, with artificial intelligence and machine learning expected to grow in importance over the next decade, demand for its services looks set to increase as well. This could mean the selling has been overdone.
One broker that appears to believe this is the case is Ord Minnett. It recently upgraded Appen's shares to a buy rating with a $24.75 price target. It is positive on its long term growth and notes that its shares are trading on undemanding multiples.
