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I think these are the best UK tech stocks to buy for 2020 and beyond

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If you’re looking for tech stocks, you’ll find plenty listed on the London Stock Exchange. According to Stockopedia, there are currently around 170 technology companies listed in the UK.

Of course, some tech stocks are likely to be better investments than others. With that in mind, here’s a look at what I consider to be the best UK tech stocks to invest in right now.

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The best UK tech stocks

One UK tech company that I think has a lot of potential is Softcat (LSE: SCT). It’s a FTSE 250-listed technology specialist that helps organisations with their IT infrastructure.

I see Softcat as a great ‘picks-and-shovels’ play on the technology theme. In the same way that those selling picks and shovels during the gold rush made a fortune, Softcat should profit as companies undergo digital transformation. As businesses move to the cloud, focus more on data, and strengthen their cybersecurity, Softcat should see high demand for its services.

Softcat is growing at an impressive rate. Over the last three years, sales have increased almost 50%. I see the potential for plenty more growth ahead. SCT shares currently trade on a forward-looking P/E ratio of 29. I’d buy at that valuation.

Enormous growth potential

Another UK tech stock that I’m excited about is GB Group. It’s an AIM-listed company that specialises in identity management. Its customers include a broad range of blue-chip organisations such as HSBC, IBM, and Nike.

GB Group operates in a high-growth industry. Around the world, identity theft and fraud is an enormous problem. With the ability to verify over 4bn people globally, GB looks well placed for growth. The shares currently trade on a trailing P/E ratio of about 31. I think that’s reasonable, given the growth prospects.

A UK video game stock

I also like Keywords Studios. It provides technical services to video game developers. Its customers include some of the biggest names in video gaming such as Nintendo, Electronic Arts, and Activision Blizzard.

Video gaming is booming right now. In the UK, it accounts for more than half of the entertainment market. Looking ahead, I expect the gaming industry to continue advancing due to new technologies such as virtual reality and the growth of esports. KWS should benefit.

KWS shares are quite expensive. Currently, the shares trade on a forward-looking P/E ratio of about 47.5. I wouldn’t let that valuation put you off though. This is a UK tech stock with huge potential.

Artificial intelligence-based solutions

Finally, take a look at dotDigital. It’s a fast-growing digital marketing company. Its key offering, Engagement Cloud, is an advanced artificial intelligence-based marketing platform that helps companies connect with their customers.

This under-the-radar UK tech stock has grown at a very impressive rate in recent years. Between FY2017 and FY2020, revenue climbed nearly 50%. I see the potential for further growth ahead. With the growth of online shopping set to accelerate, DOTD should benefit. At its current forward-looking P/E ratio of 27.7, I see the stock as a ‘strong buy’.

More top technology players 

Of course, there are plenty more top UK tech stocks that I haven’t mentioned. Sage, Rightmove, and Computercenter are just some of the other great technology companies that are worthy of a mention.

As always, the key is to spread your capital over a number of different stocks to minimise risk.

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Edward Sheldon owns shares in Softcat, GB Group, Keywords Studios, dotDigital, Sage, and Rightmove. The Motley Fool UK owns shares of and has recommended Activision Blizzard and Nike. The Motley Fool UK has recommended dotDigital Group, HSBC Holdings, Nike, Keywords Studios, Rightmove, Sage Group, and Softcat and recommends the following options: long January 2022 $75 calls on Activision Blizzard and short January 2022 $75 puts on Activision Blizzard. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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