ASX tech shares have been taken to the cleaners in 2022.
The local technology index is down 20% for the year, falling as much as 27% in March.
Despite the dip, here are 3 ASX tech shares I’d be willing to pick up and hold for the next ten years.
1. Xero Limited (ASX: XRO)
Xero is largely considered the best tech share on the ASX.
Its accounting software is sticky (Australian customers stay on average for 14 years), loved by accountants, and has enormous unused pricing power.
Despite this, the Xero share price is down 32% in 2022.
If you’ve been waiting for a pullback to jump in, this is it.
Even insiders have been buying. Recently appointed director Brian McAndrews splashed $333,172 on shares in February.
The bear case against Xero is that it’s failing to replicate its local success in international markets.
But the business is still growing at 20%+ in the United States and the United Kingdom.
Over a ten-year horizon, Xero is a business I’d be betting on to outperform the broader market.
2. SiteMinder Limited (ASX: SDR)
SiteMinder is a recent ASX tech share listing.
It provides backend software for small and medium accommodation businesses.
For example, if you own a bed and breakfast, you want to be listed on various platforms including Airbnb, Booking.com and Agoda.
SiteMinder allows you to conveniently manage all this from a single platform.
Like the broader travel industry, the business has been hit by the pandemic. But it’s been more resilient, with revenue falling by just 10%.
Management believes the company can return to historical growth of 30% per annum once restrictions ease.
If it can achieve that level of growth, it will likely be much bigger in ten years.
3. NextDC Ltd (ASX: NXT)
NextDC is as much an infrastructure company as it is a technology company.
The business builds and operates data centres across all major Australian cities.
Because of its current reliance on the ASX to fund growth – NextDC raises money via markets to fund its new centres – the company has been sold off with other non-profitable tech companies.
But investors with a longer-time horizon recognise NextDC’s multi-year growth profile. Just 25% of its planned capacity is currently built.
Moreover, its first two data centres built in 2014 both have earnings margins greater than 75% demonstrating that as utilization increases, so do profits.
Even if margins come down, there is still plenty of money to be made.
As a result, long-term investors can see through the temporary market blip and look forward to bigger earnings as centres mature.