Nearly everybody can be completely happy to see the curtain shut on 2020 and hopefully get pleasure from a significantly better 12 months in 2021. For buyers, which means looking for new progress alternatives.
Although know-how will seemingly stay engaging going ahead, it’s most likely greatest to look past a number of the ordinary suspects, just like the FAANGs and Tesla TSLA, which have already got steep valuations. Listed below are three tech traits to look at within the 12 months forward.
BATTERIES
Now that Tesla has succeeded in advancing sustainable transportation, each different automotive firm faces an existential menace in the event that they don’t start to play catch up. That is why a number of the biggest names in the industry are investing so heavily on this space. However rivals have a whole lot of work to do, having already been lapped by Tesla.
Tesla co-founder and CEO Elon Musk (Photograph by FREDERIC J. BROWN / AFP) (Photograph by FREDERIC J. … [+]
That offers Elon Musk the luxurious to be aggressive in his different enterprise strains. The one with probably the most upside is batteries. Tesla has already developed a battery cell that’s not solely a number of instances extra highly effective than something in the marketplace however has the potential to be way more cost-efficient.
If the corporate continues to make progress with its battery know-how, will probably be a game-changer, each for its present line of automobiles and a number of sustainable power merchandise. Even so, it wouldn’t be simply unrealistic to anticipate Tesla’s inventory to proceed to develop on the identical fee it has since late final 12 months – it could be silly.
Subsequently, contemplate firms that may journey its coattails, together with different battery and EV makers, together with commodity and chemical firms concerned with battery know-how that may serve the corporate’s rivals.
Many such companies are based mostly in Asia. Home buyers can entry them by means of the Global X Lithium & Battery Tech ETF, which incorporates high-potential companies resembling Korean-based LG Chem; Chinese language battery-makers CATL and BYD (the latter of which additionally makes EVs); Panasonic in Japan and the U.S.-based chemical producer Albemarle.
CHALLENGERS TO BIG TECH
It isn’t a lot that the FAANG shares will collapse, however the continued assault on Massive Tech, from each rivals and governments pursuing anti-trust suits, will open up funding alternatives with different companies. What’s extra, people can solely focus on one know-how platform at a time, and there at the moment are extra new engaging platforms than ever.
Many individuals, as an illustration, have begun to make use of Twitter to seek for information as an alternative of Google GOOG and Fb is struggling to fend off the rise of TikTok because the go-to social media channel amongst younger folks. In the meantime, Disney Plus and HBO Max are shaping up as worthy foes for Netflix NFLX within the streaming wars.
Past that, video video games are more and more turning into social media platforms. If Epic Video games can triumph in its ongoing battle with Apple AAPL over gatekeeper fees, it may have a profound influence on how we entry mobile-based software-as-a-service companies.
Even Amazon AMZN is weak. Walmart WMT, the largest retailer on this planet, has made actual headway in its digital efforts with the profitable launch this 12 months of its Walmart+ providing.
Additionally, Chewy.com has emerged as an e-commerce chief in pet-focused retail items, whereas customers procuring on-line for luxurious furnishings can discover higher gadgets shopping for instantly from RH (previously Restoration {Hardware}). And Shopify permits extra small outlets to promote on-line with out counting on Amazon, which competes with such manufacturers.
BITCOIN
Bitcoin has spiked once more this 12 months, up over 200%. For the primary time, main monetary companies are validating it, whereas many massive, institutional buyers are starting to take the cryptocurrency extra critically than ever earlier than. The CEO of BlackRock BLK, the world’s largest asset supervisor, stated not too long ago that Bitcoin sooner or later may evolve into a worldwide market asset.
Cost firms like Sq. SQ and PayPal PYPL have carried out protections to offset the inherent dangers related to accepting an asset that has traditionally endured unstable value fluctuations and traded on exchanges which have suffered embarrassing cybersecurity breaches. Sq. maybe has probably the most potential, because of its relationships with 1000’s of retailers, in addition to the over 20 million who use its Money App, the place customers can now purchase Bitcoin.
This units the stage for Amazon and Shopify to comply with go well with and permit Bitcoin transactions ultimately. When that happens, it is going to create a clearer path towards an actual financial system revolving round Bitcoin.
All of it will result in steadily rising and extra steady costs. The underside line is that, as a long-term portfolio diversifier, Bitcoin lastly is smart for a lot of buyers.
CAVEATS
There isn’t a denying that 2020 introduced the sudden, to say the least. So, though I imagine very strongly in battery know-how, Bitcoin and challengers to the FAANGs, I additionally acknowledge that actually something may occur in 2021.
What we do know is that disruptions attributable to the coronavirus have spawned an enormous quantity of innovation, seeding a crop of recent leaders in tech that haven’t simply survived – they’ve thrived. So, whereas we hope that by the top of 2021 we’ll have some semblance of our former lives again, most of the tech improvements they’ve spawned are right here to remain.
Ross Gerber is CEO and President of Santa Monica, Calif-based Gerber Kawasaki Inc., an SEC-registered funding advisor with roughly $1.5 billion in property underneath administration as of 12/15/2020. Gerber Kawasaki shoppers, agency and workers personal positions apple, amazon, Shopify, World X Lithium ETF, PayPal, Sq. amazon, Walmart and Tesla. Please search steering from an funding advisor earlier than making any funding. All investments contain danger and is probably not appropriate to your state of affairs. Comply with Twitter: @gerberkawasaki Web site: Gerberkawasaki.com
