Soaring 140% in 17 Months: The Hidden Gem ASX Tech Stock on a Remarkable Streak - Kalkine Media

October 06, 2023 07:15 AM AEDT | By Team Kalkine Media
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As 2021 came to a close, the specter of inflation cast a shadow, prompting a market shift away from high-growth equities amid fears of rising interest rates. Throughout 2022, these fears materialized with rising rates, dampening the once-bullish sentiment surrounding the technology sector, which had enjoyed a decade of robust growth. While 2023 has witnessed a partial recovery, it has been largely steered by dominant tech behemoths.

September, however, dealt a blow to the ASX technology stocks sector, with the S&P/ASX All Technology Index (ASX: XTX) experiencing a painful 5.1% decline. As inflation cools and potential interest rate hikes loom less prominently, investors are on the lookout for tech gems with promising prospects.

One such hidden gem catching the attention of investors is Audinate Group Ltd (ASX: AD8), a developer of audio-visual networking technology. Despite being affected by the inflation-induced sell-off in 2022, wherein its value halved from December 2021 to May 2022, this Australian tech company has defied the odds. Audinate's share price has surged by an impressive 141% since May last year, marking an 86% increase over the past 12 months and a substantial 71% rise year-to-date.

James Gerrish, a portfolio manager at Shaw and Partners, remains bullish on ASX AD8. Despite recent market volatility, a capital raise, and an ongoing share purchase plan (SPP), Audinate's shares have exhibited surprising strength, prompting Gerrish to affirm his team's bullish stance. Notably, Gerrish expressed the intention to increase their holding in Audinate through the SPP, emphasizing their commitment to maintaining a strong position in the company.

While the Audinate share price experienced a 10% dip on September 8 due to concerns about dilution from the capital raising, Gerrish views this as a potential opportunity for long-term investors to capitalize on a temporary downturn.

Although coverage on Audinate is limited, Gerrish's optimism aligns with the broader sentiment among his peers. CMC Markets currently reports that five out of six analysts recommend Audinate as a strong buy, underscoring the positive outlook for this hidden gem in the ASX technology landscape.


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