The tech sector took a significant hit last week, contributing to the overall market decline. While this might seem discouraging for investors with exposure to technology stocks, it presents a unique opportunity for those looking to enter the market. But which ASX tech stocks are worth considering? Here, we take a look at three high-potential tech stocks that could offer impressive returns in the coming months, according to industry experts.

Life360 Inc (ASX: 360)

Goldman Sachs has highlighted Life360 Inc. (ASX: 360) as one of the tech stocks with strong potential for market-beating returns over the next year. The company, known for its location-sharing app and family safety services, impressed analysts at the recent Communacopia + Technology Conference 2024, where CFO Russell Burke shared key insights.

Goldman Sachs was particularly encouraged by Life360’s growth in its subscription business, both domestically and internationally. The company’s strong performance in U.S. regions like the Midwest and South shows the power of network effects, with organic user acquisition accounting for 70-80% of new users. Life360's paid subscriptions have bounced back to pre-2022 levels, showing sustained momentum.

Internationally, the rollout in the UK and Australia has been a success, with revenue growth exceeding 50% since launch. Looking ahead, the company is targeting Northern Europe for further expansion, with minimal product adjustments required. Additionally, Life360’s advertising strategy appears promising, and management is optimistic about achieving its target of a 25% EBITDA margin sooner than initially expected.

Goldman Sachs reaffirmed its buy rating on Life360 shares, setting a price target of $19.75, which represents a potential 16% upside over the next 12 months.

Light & Wonder Inc (ASX: LNW)

Next on the list is Light & Wonder Inc. (ASX: LNW), a global gaming technology company that has caught the attention of analysts at Bell Potter. The company operates across both land-based and digital gaming platforms, with over two-thirds of its revenue derived from the U.S. market.

Bell Potter is optimistic about Light & Wonder’s ability to generate a strong return on invested capital (ROIC). The company’s cross-platform strategy is expected to enhance the performance of its gaming products, both online and offline, giving it a competitive edge in the industry. Analysts believe this strategy will help the company maintain above-average ROIC, a key measure of profitability and efficiency.

With this in mind, Bell Potter has issued a buy rating on Light & Wonder shares, with a price target of $186.00. This valuation suggests that the company’s innovative approach to gaming technology could lead to significant gains for investors.

NextDC Ltd (ASX: NXT)

Another standout tech stock recommended by Goldman Sachs is NextDC Ltd (ASX: NXT). As a leading data centre operator in Australia, NextDC is poised to benefit from the ongoing shift towards cloud computing. The company’s growth potential is being driven by the rapid adoption of cloud services, which has increased demand for digital infrastructure.

Goldman Sachs sees this as a major growth opportunity for NextDC, especially as both public and private sector demand for cloud and data solutions continues to soar. In addition, the enterprise telecommunications market is evolving, further solidifying NextDC’s position in the digital infrastructure space.

What makes NextDC particularly attractive is its valuation. Despite its strong growth profile and proven business model, the stock trades at a discount compared to its peers, which Goldman Sachs believes is unjustified. As a result, the broker has placed a buy rating on NextDC shares with a price target of $18.50.

Xero Ltd (ASX: XRO)

The final stock on the expert’s watchlist is Xero Ltd. (ASX: XRO), a cloud accounting software provider with a massive global market. According to Goldman Sachs, Xero is well-positioned to capitalise on the digitisation of small and medium-sized businesses (SMBs) worldwide.

With more than 100 million SMBs globally, the total addressable market (TAM) for cloud accounting software like Xero is estimated to be over NZ$100 billion. The company has already established a strong presence in key regions such as Australia, New Zealand, the UK, and North America. Regulatory changes and the increasing need for operational efficiency among SMBs are likely to accelerate the adoption of cloud-based solutions like Xero’s.

In addition to its growth potential, Xero has shifted its focus towards profitability, which has improved investor sentiment. Goldman Sachs has a conviction buy rating on Xero shares, with a price target of $180.00, making it a top pick for long-term investors.

While the tech sector has experienced volatility, experts believe that certain ASX tech stocks are poised for significant gains. Life360, Light & Wonder, NextDC, and Xero all show strong growth potential, with analysts issuing buy ratings and optimistic price targets. For investors seeking opportunities in the tech space, these stocks are certainly worth a closer look.