Calling the current giants of the technology industry is quite simple. But it’s extremely difficult to predict exactly which companies starting these days will achieve this scale in the future. Now the technology industry is full of companies that have torn all of their competitors and brought great profit to their shareholders a couple of decades ago. But now their time has passed. Look for brands like IBM, Cisco, Hewlett-Packard, Dell, or Intel. They are certainly strong and large-scale, but their stocks are unlikely to grow several times already. It turned out that Internet companies and cloud products now rule the technology market..
In this list there are several companies with a ready-made name, which in the future, we assume, will still be able to surprise everyone and become large figures in the market landscape. Read why growth can be expected from these companies, even though technology stocks, as a rule, do not “skyrocket” sharply..
[Note: Stock prices and indicators in the article are indicated at the time of publication. You can see the current stock prices in a special widget at the end of the text.]
1. Palo Alto Networks (NYSE: PANW)
• Price: $ 201.75
• 52-week range: from $ 114.66 to $ 207.93
• Annual income from the date of placement (July 20, 2012) at $ 42: 29.06%
Cybersecurity is a rapidly growing market for investors. In a way, you need to thank the hackers who continue to attack companies and individuals. According to a recent report by MarketsandMarkets, the global cybersecurity market is expected to grow to $ 231.9 billion in 2022 (up from $ 137.9 billion in 2017)
This is 11% stable growth over five years. At least one company should become the standard for cybersecurity. And although it is impossible to give guarantees at the moment, Palo Alto Networks is a very good candidate for this role. At least, because it is one of the largest in its business at the moment.
2. Mercado Libre (NASDAQ:? MELI)
• Price: $ 295.37
• 52-week range: from $ 217.06 to $ 417.91
• Annual income over the past 10 years: 21%
MercadoLibre is a Hispanic e-commerce brand. It is based in Buenos Aires, Argentina, but placed its technology shares on the NASDAQ in August 2007. The company’s business model combines the principles and features of the best American counterparts – PayPal, eBay and Amazon.
It is interesting to note that eBay was the largest shareholder of MercadoLibre with a 20% stake, but most of these shares were sold in October 2016. It would be a mistake not to mention the risks of investing in Latin American companies. Political instability is a common feature of all countries in the region, but in some countries it affects many times more than in others. Therefore, before investing, go deep into the study of risks and potential yourself.
3. Tencent (OTC:? TCEHY)
• Price: $ 52.21
• 52-week range: from $ 31.41 to $ 61
• Annual income over the past 9 years: 44.51%
Many US technology investors are following Alibaba’s path, but may be unfamiliar with Tencent, its cofounder and CEO Ma Huateng.
There are three leaders in digital advertising spending in China: Alibaba, Baidu, and Tencent. Tencent accounted for 12.4% of this market in 2017. As well as Facebook and Google, large companies from Asia are significantly strengthened in this direction. Tencent is expected to compete for an even larger piece of the advertising cake. Particularly noteworthy is the mobile application for social networks Tencent WeChat, in which at the moment there are more than 1 billion active users. WeChat users do not just talk – they use the app to buy and pay for goods. Therefore, in fact, they are deeper involved in the industry than Facebook users..
Since Tencent’s technology stocks are mostly traded in Hong Kong, there are some difficulties in investing, given that its over-the-counter (TCEHY) stock is relatively illiquid. One way to buy Tencent shares is to buy back shares in the Naspers South African Internet holding (OTC: NPSNY). This company owns 31% of Tencent. True, and Naspers is not trading well..
4. Alibaba (NYSE:? BABA)
• Price: $ 195.00
• 52-week range: from $ 121.95 to $ 206.2
• Annual income from the date of placement (September 9, 2014) at $ 68: 27.46%
There has been a lot of buzz around Alibaba lately, so its technology stocks are trading at a record high. This is probably exciting for short-term investors, but there are no bad prerequisites for “long-playing” investments. Alibaba has one of the most successful IPOs in ten years, and in the future is likely to achieve more than one impressive achievement.
The company has a greater share in the e-commerce market in China’s native country than in the USA (57% versus 43% in 2016). And the Republic of China is an eldorado of opportunities, where 4.3 times the population, and 2.98 – Internet users.
Like Amazon, Alibaba pulls its tentacles far beyond e-commerce. Now the company occupies a niche in one of the tidbits of technology – cloud computing. The sphere will definitely grow, therefore, the same can be expected from the company.
5. NVIDIA (NASDAQ:? NVDA)
• Price: $ 245.94
• 52-week range: from $ 135.22 to $ 260.50
• Annual income over the past ten years: 27.01%
NVIDIA is the industry leader in GPUs (semiconductors). At the moment, its status in this direction is comparable to Intel in the years when the brand dominated the PC microprocessor market in the 1980s and 1990s. Consider investing – do not forget to wear sunglasses, because NVIDIA will shine even brighter in the future than now.
6. Facebook (NASDAQ:? FB)
• Price: $ 182.68
• 52-week range: from $ 144.56 to $ 195.32
• Annual income from the date of placement (May 18, 2012) at $ 38: 28.85%
Facebook is a winning company. Everyone knows about it. However, some investors probably forget that Facebook’s technology stocks fell to half the price than at the time of the IPO, and then recovered and rose to their current level..
Everyone knows that in digital advertising, there is an uncompromising race of two media titans – Facebook and Google. According to this Pivotal Research Group, in the first half of 2017, these two companies accounted for 73% of all digital advertising revenue in the United States. Even more striking is the fact that the two companies accounted for 83% of the total industry growth..
7. Tesla (NASDAQ:? TSLA)
• Price: $ 276.82
• 52-week range: from $ 244.59 to $ 389.61
• Annual income from the date of placement (June 29, 2010) at $ 17: 43.16%
There is no doubt that Tesla cars have revolutionized the automotive industry. Despite the fact that last year the company supplied slightly more than 100,000 of its electric vehicles, and General Motors – 8.9 million vehicles with an internal combustion engine, these companies have approximately equal market capitalization.
Tesla CEO Ilon Musk has proven to be as good a seller as a technical manager. And he should continue in the same vein because Tesla is not yet ready to make money in the short or long term. The company must continue to raise money from shareholders and bondholders to finance its ambitions. And yes, it’s a risky choice..
8. Adobe (NASDAQ:? ADBE)
• Price: $ 238.09
• 52-week range: from $ 131.20 to $ 243.34
• Annual income for 10 years: 19.31%
Adobe is one of the “vintage” technology companies that not only managed to survive in the changing digital world, but also continued to excel from transitions to cloud computing. Because Adobe is now one of the best technology companies moving to cloud software, it should thank current CEO Shantana Narayen and his team.
In addition, during its transformation, Adobe found and captured large markets with huge potential. Now it is a major locomotive of digital marketing and the media, not forgetting its rich experience in creating digital content.
9. Alphabet (NASDAQ:? GOOGL)
• Price: $ 1069.64
• 52-week range: from $ 915.31 to $ 1.198.
• Annual income over the past ten years: 13.55%
Alphabet is familiar to everyone, because it is the parent company of Google. The positions of Google and Alphabet will be strengthened and expanded, because such an alliance is strong in three key areas: digital advertising, mobile operating systems and cloud computing. Most likely, the assumption that in 10 years Alphabet together with other giants of its business will bring things to the market that we don’t think about.
10. Microsoft (NASDAQ:? MSFT)
• Price: $ 96.36
• 52-week range: from $ 67.43 to $ 98.69
• Annual income over the past ten years: 13.55%
Like Adobe, Microsoft has found its “youth fountain”, which is inspired and competently motivated by management. Since 2014, CEO Satia Nadella has reoriented the company to the cloud sector – at the right time for this..
In the first two decades of its publicity (the company went public in IPO in 1986), Microsoft has grown rapidly in line with the increasing number of PCs in the world. Currently, Microsoft occupies 88.6% of the market for desktop operating systems, which, in essence, indicates ownership of all the sweet cake. The only problem with this cake is that it does not grow, but shrink. Microsoft reacts to this in time and switches to cloud technology. The company has now become the world’s leading cloud computing provider..
Summarizing the lesson
Considering this list of potential technological stars, three conclusions can be drawn. Firstly, investors need to be prepared to study options from abroad – there are two Chinese, one Argentinean and American companies. Secondly, projects that dominate cloud computing are mastodons that have been leading for years. Alphabet, Alibaba, Adobe and Microsoft are committed to the development of cloud computing. Thirdly, the next great technology company can even be wrapped in such unexpected packaging as the car manufacturer Tesla.
It is also worth remembering that the positions of these players can be very shaky. Remember all those cool companies that surprised in 1980-90. Almost nothing is heard about many of them now..
Due to the potential and power of its Amazon Web Services cloud division and its commitment to any innovation (think about buying Whole Foods), Amazon is likely to always remain a star player in the market.
However, Apple’s future seems uncertain. It may be the largest company in the world by capitalization, because its technological stocks have been one of the most efficient assets of the last decade. But the brand is too much dependent on the iPhone and China, so its future is still unclear. Especially high are the expectations from the next generation iPhone, which will be released in September..
China has very fierce competition, and consumers are less likely to buy smartphones for $ 1,000. Like the PC market before, the global smartphone market is already ripening. According to the Gartner Group, global smartphone sales for the first time at the end of 2017 declined year on year. And this is 5.6% less than in the fourth quarter of this year. Apple needs new “chips” so as not to be left behind technology. Maybe you should pay attention to cloud computing..
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