Top Three Tech Investments of 2017
Profit Confidential
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This Old Tech Perfectly Set Up for Big Upside Move The one thing you can count on in the tech world is that it is in a constant state of flux. By definition, the best tech companies to invest in operate on the edge of what's possible, trying to bring tomorrow closer to today.
Sure, some companies develop a stellar product and rest on their laurels but, by and large, the tech industry is driven by innovation, and you'll see that the companies on top all have one thing in common: a revolutionary technology. Having said that, what are the top three tech investments in 2017? It's important to remember that as time goes on, our technology has only continued to increase in importance. That's why the most profitable companies in the world, like Apple Inc. (NASDAQ:AAPL), crafted an empire out of devices that didn't exist 20 years ago. Before that, giant oil companies, consumer-facing products like soft drinks, and car manufacturers dominated the stock market.
Those days are over. Take Facebook, Inc. (NASDAQ:FB) as a great example of a company that conjured billions of dollars out of thin air—or rather, digital code. Where once people kept in touch via phones, mail, and e-mail, Facebook came in and revolutionized human contact in a way that had not been possible before its technology. Now, with over 1.2 billion daily active Facebook users, you have an idea of just what is possible when a company crosses the tech threshold of today to break through to tomorrow. And that story has repeated itself again and again and again.Apple, with the creation of the "iPhone," Microsoft Corporation (NASDAQ:MSFT), with the introduction of "Windows," and even Snap Inc (NYSE:SNAP)—with a slight twist on traditional messaging apps through a gimmick based on disappearing messages—morphed into tech giants worth billions of dollars. In fact, Snap's recent initial public offering (IPO) netted the company a market cap nearing $25.0 billion. That's an insane amount of money for a company that didn't even exist a decade ago. The reality is that the world is more tech-reliant than ever and, as such, the tech industry has the ability to produce massive returns on investments that other industries frankly cannot match. And that's what makes it so crucial to be on the lookout for the next big tech innovation and the next big tech investment. And there are tons of under-the-radar success stories that aren't as heralded as Facebook or Apple, but still generate massive returns. Take Shopify Inc (NYSE:SHOP), a Canadian company that has quietly amassed over 145% gains in the past 12 months. Or Kinaxis Inc (TSE:KXS) which, since its IPO in 2014, has seen a gain of over 500%. The money in the tech industry is very real, and very attainable to the investor with the right strategy and mindset. While the tech sector does have inherent volatility and susceptibility to competition—perhaps more so than other industries—at the end of the day, the reward is certainly worth the risk. With all that out of the way, let's get on with the top three best tech investments in 2017 and the companies that might harness them, as shown on the graph below.
Augmented Reality Apple CEO Tim Cook recently said this about augmented reality (AR): "I regard it as a big idea like the smartphone. The smartphone is for everyone, we don't have to think the iPhone is about a certain demographic, or country or vertical market: it's for everyone. I think AR is that big, it's huge." Those are some strong words in respect to AR, and they come from one of the most powerful executives in the world. If Apple is hot on a trend, you can bet that customers are right around the corner. While Apple has had its share of misses (*cough* "Apple Watch" *cough*), the company still has a great batting average, and AR seems to be the next forefront. AR tech is rapidly increasing in sophistication and consumer relevance. Look no further than the Pokémon GO craze that swept the world, sending millions of people scouring the streets, smartphone in hand, looking for colorful monsters to appear everywhere from coffee shops, to playgrounds, to post offices (and even the occasional cemetery, which was a tad morbid). So, what is augmented reality? As the name implies, AR is essentially when one of your devices adds a "virtual" layer to the real world. In the case of Pokémon GO, players would view the world through their cell phones and see the monsters on their screens roaming about as if they actually existed in these neighborhoods, schools, or streets. The game is a perfect example of the power of AR. It dominated the news cycle for weeks and made roughly $600.0 million in the three months following its release. While the fervor did eventually flame out for the game, the world took notice: AR has arrived. With that in mind, the company that is able to best master all the potential locked up in AR and get consumers to buy in will have a lead in one of the best tech investments in 2017. Artificial Intelligence Another exciting tech investment is artificial intelligence (AI). We've all seen the movies in which AI is able to do wonderful (and terrifying) things to the world, and those realities are seemingly closer than ever (the good ones, that is). Many of the largest companies in the world are investing hard in AI, looking to take control of what may represent a turning point in human history. But historical considerations aside, from an investing point of view, AI is a great tech investment. The technology is on the cusp of accomplishing some truly astonishing acts. Take, for instance, Alphabet Inc (NASDAQ:GOOG)-owned Google's "DeepMind." Nick Bostrom of Oxford University's Future of Humanity Institute named DeepMind the leading developer of human-level AI. And the list of achievements backs him up. Google's DeepMind dominated us lesser mortals when it beat the world's greatest Go board game players. Sure, robots besting us at board games is nothing new. But, whereas chess has a rather limited set of outcomes, Go holds the possibility for far more move sets and outcomes. This makes a Go victory that much more impressive, due to its high complexity and ability for players to develop novel and fluid strategies. AI is coming. And it's closer than you think. More practical options have already landed with consumers. "The 2017 Voice Report" from VoiceLabs claims that 24.5 million voice-activated AI helpers like the "Amazon Echo" and "Google Home" will ship in 2017, a massive improvement over the less-than-10-million sold in 2016. This is good news for artificial intelligence in 2017. All this serves to make AI one of the top tech investments in 2017. Energy Tech Tesla Inc (NASDAQ:TSLA) is a company that hardly needs an introduction. It has become a dominant player in the auto manufacturing market, and hasn't even fulfilled its true potential yet, which is to revolutionize the way we look at. With its massive robot "Gigafactories," strides in autonomous vehicles, and the development of solar technology, Tesla is poised to become one of those revolutionary companies I mentioned at the beginning of this piece. You could argue that this is already the situation. In which case, TSLA stock is looking mighty tasty right about now. With a market cap exceeding some of the legacy car companies, Tesla has so many things going for it that it's hard to say which move will produce more in the long run. Its impressive car tech? Or, how about solar panel roofs? Or maybe its position in the autonomous vehicle race? No matter which way you slice it, it looks like Elon Musk is on the fast track to the tech annals of history as a powerful innovator. If Musk's plan can come to fruition and he can lead the energy revolution from the Tesla offices, we're looking at what could become one of the biggest companies in the world in the near future. With the "Model 3" (Tesla's most affordable car yet) set to come out in 2018, and the hype surrounding TSLA stock, you have one of the better representatives of the top tech investments in 2017. The first strategy that any investors worth their salt should follow is to know the company that they're sinking money into. Having found the companies that have the best potential to take advantage of a breakthrough technology or an emergent product on the horizon, jump in. You don't want to be like the Facebook or Apple early naysayers and doom prophets who foresaw these companies going down in flames when, in fact, all that went down in flames was their opportunity to make massive gains on investments. Look for the aforementioned technologies and the companies that are showing progress in their development. That will lead you to the top tech investments of 2017. |
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Recent Crash in IBM Stock a Golden Opportunity? International Business Machines Corp. (NYSE:IBM) announced its first-quarter results last week, and investors couldn't see beyond its continuous streak of losses, as the company's revenue declined again.
Even the upbeat earnings could not stop the five-percent slide in the price of IBM shares last Wednesday. So, should you consider putting your money into IBM stock? Could it reward you handsomely? Here's something to consider: IBM has a top-notch artificial intelligence (AI) platform called "IBM Watson," which is one asset that should just keep growing over the coming years. AI is already an integral part of our digital lives, and it could become a normal part of pretty much everything in our lives, thanks to Watson. IBM has been trying to turn itself around by investing heavily in AI and cloud businesses. These are two of the top lucrative markets, and IBM's presence and growing expertise in these areas should lift the IBM stock price.
For investors looking to reap the rewards from AI, one of the biggest technology trends of today, IBM stock could be a good place to park money. Amazon.com, Inc. (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), and Google parent company Alphabet Inc (NASDAQ:GOOG) are the better-known names in AI, yet IBM continues to make its mark quietly. IBM stock is one of the best ways to play the theme of AI in the markets today. With the power of IBM Watson, the company's leading AI platform, the company is targeting sectors like healthcare and finance, where the potential for gains is huge. For example, consider IBM's deal with Crédit Mutuel. IBM's Watson will assist the 20,000 customer advisors of Crédit Mutuel across France. This will enhance the quality of service for 12 million customers. A solution like IBM's e-mail analyzer could help financial advisors manage more than 350,000 customer e-mails that they receive every day. With help from the Watson-based solution, the bank would be able to identify the most frequent requests and determine their urgency levels in order to enhance their customer responses. Just imagine if Watson technologies were to be deployed by more and more banks and financial institutions across the world; the future growth potential could be huge for IBM stock. Another well-known deal was made last month, when IBM and salesforce.com, inc. (NYSE:CRM) entered into a global partnership to deliver joint solutions designed to leverage AI technology. IBM Watson and salesforce.com's "Einstein" could help companies enhance customer engagement across a number of areas. Results from these efforts should start bearing fruit for IBM stock. But, probably most important of all, IBM is disrupting the healthcare industry with its Watson AI platform. Watson can assist healthcare professionals and doctors in the treatment of their patients. "IBM Watson for Oncology," for example, can help in the treatment of cancer. Surely and steadily, Watson is making inroads into the healthcare industry and, when it explodes, IBM stock investors will likely be well rewarded for their patience. IBM Watson is one of the most underappreciated assets of the company, which is going through a difficult and long turnaround phase. But these are the times when long-term investors get a golden chance to buy into solid, high-potential businesses. In the first quarter, both the IBM cloud and cognitive solutions posted strong growth. And this trend is likely to continue in the future. The only concern is whether the growth from these areas will be high enough to stem the company's overall losses. Moreover, IBM continues to spend a large amount of money—about almost four percent of the company's revenue—in research and development (R&D) efforts. This, however, is one factor that would improve financial results in the long term, and it demands more patience from investors. For those patient investors, there could be big rewards. IBM will keep expanding Watson to cater to a number of industries like healthcare, finance, manufacturing, etc. and will keep growing bigger. IBM stock may be out of favor right now, but it has all the potential to make a grand comeback.
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