With the dominance of tech in the past couple decades, we assume future innovation, progress, and efficiency will have tech at the core of growth in our economies and the broader stock market. The emergence of the internet, online retail, mobile phones, and IT have greatly influenced the early part of the second milenia.
What markets will be disrupted and what industries will rise in the next several years?
Apple, Microsoft, Amazon, and Google are early tech companies that spearheaded the 21st Century The average 20-year return is about 18,594% between these 4 companies! If you had invested $1000 into each of these four companies 20 years ago, you would be sitting on over $740,000 in combined value.
These companies may still be great picks for the future, but what next emerging industries might rule the several decades ahead, and who might be the players that will have control?!
Cloud computing is an industry that maintains internet servers to store, process, and manage loads of data. Although an established industry, it is growing at a rapid rate alongside the digital transformation in our society. The industry is forecasted to grow at a compound annual growth rate (CAGR) of 15.7% from 2022 to 2030.
Top players: a couple notable names to look out for would be Salesforce (CRM), Unity Software (U), and Adobe (ADBE). More incumbent names like Amazon (AMZN) with “Amazon Web Services”, and Microsoft’s (MSFT) public cloud “Azure” and Google’s (GOOGL) “Google Cloud” are well known staples in the industry.
AI and Robotics
As most suspect, AI and Robotics is a growing industry that may easily change the economy as we know it. The swift increases in automation, driverless cars, and machine learning have shown that the industry of AI and Robotics is barely getting started. Current analysts have predicted growth of the industry at a CAGR of 20.5% from 2022 to 2031.
Top players: Recently, Amazon has made strides in automated inventory management and Nvidia (NVDA) has made breakthroughs in machine learning for business solutions. Other players that have a great chance of dominating the industry are IBM (IBM), Dynatrace (DT), Workday (WDAY), and Micron Technology (MU).
The growth we’ve seen with cloud computing is representative of the value we hold in dealing with data. Data analytics revolves around the use and interpretation of big data to help companies make informed decisions. All modern companies want every bit of leverage they can get to increase their profits, and data analytics is the perfect industry that will transform business solutions on a global scale. The projected CAGR of the industry is 25% from 2021 to 2030.
Promising players: Some companies that might be appealing investments are Snowflake (SNOW), Alteryx (AYX), MongoDB (MDB), and Splunk (SPLK). Databricks, another successful data analytics company, is predicted to go public later this year.
These industries may potentially make a long-standing impact on the market, accounting for some of the largest growth we may see in the next decades. Alongside Moore’s law and the rapid transformation to sophisticated and automated technologies, these industries may make interesting investments to consider for your long-term portfolio.
Don’t worry about current economic cycles, it is good investing discipline to buy stocks you have researched thoroughly and believe will grow. These are long-term investments, so don’t let volatility get in the way, with potentially 10 to even 30 years of growth to help make your future adulthood portfolio a planned success!
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.