If you're looking to take advantage of the recent weakness in the tech sector, then you may want to look at the three ASX tech shares listed below.
These shares have all been given buy ratings by the team at Goldman Sachs. Here's why it rates them highly:
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Nitro Software Ltd (ASX: NTO)
The first ASX tech share to look at is Nitro Software. It is aiming to drive digital transformation in organisations around the world with its Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution.
Goldman Sachs initiated coverage on the company this week with a buy rating and $2.95 price target. It commented: "We estimate Nitro can increase its TAM penetration from 0.15% to 1.4% by FY40 implying 9x uplift to Nitro's current revenue base."
PointsBet Holdings Ltd (ASX: PBH)
Another tech share that Goldman is a fan of is PointsBet. It is a growing sports wagering operator and iGaming provider. PointsBet offers innovative sports and racing betting products and services via a scalable cloud-based platform. It currently operates in the ANZ and United States markets and has delivered significant growth in both. Positively, it is still only scratching at the surface of its massive opportunity in the lucrative US market.
Goldman Sachs currently has a buy rating and $9.97 price target on the company's shares. It said: "Reiterate our Buy rating on PBH, with our thesis underpinned by PBH's leverage to the burgeoning US Sports Betting and Gaming market which we forecast to be a ~US$60 bn TAM opportunity at maturity."
Xero Limited (ASX: XRO)
A final ASX tech share that Goldman rates highly is Xero. It is a provider of a cloud-based business and accounting solution to small and medium sized businesses. Xero has been growing strongly over the last few years and looks well-placed to continue this trend in the years to come. This is thanks to its international expansion, acquisitions, the transition to the cloud, and its app ecosystem. The latter has significant monetisation potential according to Goldman.
The broker has a buy rating and $158.00 price target on Xero's shares. Its analysts believe the company is well-placed for strong growth. They are forecasting revenue of NZ$1,096 million in FY 2022 before growing to NZ$1,661 million by FY 2024.
