How To Profit From Two of the Hottest Tech Trends I’ve Ever Seen

14 | By Michael A. Robinson

During our last visit, I told you that the “Mobile Wave” was one of the most powerful trends at work in the tech sector today.

I told you it was one of the biggest profit opportunities that I’m following for you.

And I shared a potential “double-your-money” profit play that the “experts” seem to have missed.

As good as the “Mobile Wave” story might sound, it’s not the only hot sector that can substantially bolster your net worth.

Today I’m going to tell you about two other high-tech trends that I’m following – and each one represents the double-your-money profit opportunities that I’m always hunting for.

And I’ll give you a stock to watch with each one …

The trends that I’m talking about are “Big Data” and “Cloud Computing” and each is an example of the “unstoppable trends” that I search out in my Five Rules of High-Tech Wealth that I’ve been talking to you about over the last few weeks.

Let’s look at each of these two powerful developments.

And we’ll start with Big Data, a term that refers to technologies that make massive data sets – once inaccessible – available for analysis and use in decision-making.

According to a recent study by IBM, we now create 2.5 quintillion bytes of data each day.

But it’s what we do with all that data that truly matters.

And today Big Data has reached critical mass thanks to a confluence of forces: Ultra-fast computers and sophisticated mathematical formulas called algorithms are making it possible to use the data to solve some of our more complex challenges.

We’re talking about better storm warnings, tracking climate change, reducing crime, lowering energy use and solving the riddle of complex and lethal diseases just to name a few.

With so many avenues of discovery available to us, the Big Data trend is the definition of high growth and big profits. Analysts say that 90% of the data we work with was just created in the last two years alone. Forecasts call for this sector to grow tenfold to reach $50 billion between now and 2016.

Investment opportunities here range from hardware and software. Thus, I see lots of profit opportunities in this field.

That’s why I’m glad to tell you about Silicon Graphics International (Nasdaq: SGI). You may have heard of this small-cap tech leader in the past because it did the computer work needed to create the dinosaurs for the hit movie Jurassic Park.

Today, the company has gone through a restructuring that allowed it to focus heavily on Big Data tech. SGI sells ultra-fast computers and networking gear organizations need to crunch through massive amounts of data.

SGI’s high-performance products power such applications as design for aircraft and autos, modeling of new drugs, weather simulation and data analysis.

Over the last three years, SGI has averaged a growth rate of 31%. Just last quarter, it showed a 64% improvement in earnings per share (EPS). Not bad for a company with a $498 million market cap that trades at around $14 a share.

Now then, if they don’t know about it directly, a lot of investors are already making use of the third big trend I want to tell you about.

It’s called Cloud Computing. It’s a euphemism for “hosted services,” in which the software you use or the data you’re saving sits out on the Internet, instead of on the hard drive of your computer.

And it’s becoming more of a mainstream technology.

If you back up your computer data with an online service, or store your digital photos online, then you have already started using “the cloud” as an integral part of your life.

But backing up data is just the start …

The Web hasn’t just opened up global computer networks to Google searches, Amazon purchases and YouTube videos. It’s a game-changer that allows companies, government agencies and other organizations to save on their computer costs across the board.

They do so by tapping the power of the Cloud, which means using either the Web or off-site data centers hosted by third parties. These moves allow organizations to avoid the cost of building and running their own server farms, which are really just big rooms filled with computer servers.

Tapping into the cloud also allows corporate IT departments to boost worker productivity without buying and running their own computer servers and related gear.

That’s why cloud computing is a huge tech trend. Consider that the respected research firm Forrester predicts cloud computing is going to increase from about $41 billion in 2011 to $241 billion in 2020. That’s an increase of roughly 487% in just about a decade.

Now you know why tiny Datalink Corp. (NasdaqGG: DTLK) is investing so heavily in the cloud. This is the kind of small-cap firm I tell tech investors to try and find. The firm still has plenty of room to grow sales, earnings and its stock price.

Datalink greatly simplifies the movement to the cloud, a fact that appeals to risk-averse information technology managers. The firm’s On Demand Labs lets potential buyers design and test a cloud before they make any major investments.

Customers receive a highly detailed analysis of the conversion that includes lots of data about what to expect when they switch to the cloud. That simple message is helping it pick up lots of new clients.

With a market cap of about $210 million, the stock trades at about $11 a share. It has a forward Price/Earnings (P/E) ratio of just 9. The PEG ratio that measures growth prospects come in at just .5. Anything below 1 shows a high potential for growth.

In this year’s first quarter, earnings were off by more than 40% due to the costs associated with its expansion. But I’m not worried because I’m looking at its long-term track record.

Over the past three years, Datalink has grown its earnings per share by 68%. It also has a three-years-sales-growth rate of 38% and achieved record revenue in this year’s first quarter.

Both Datalink and SGI are very fast growers. At their present rates of growth, their share prices could double in less than three years.

And that’s what it’s all about here at Strategic Tech Investor — finding stocks with the power to double our money as we consistently build our net worth on the road to financial freedom.

If we achieve that goal, then we’ve done the job we set out to do.

14 Responses to How To Profit From Two of the Hottest Tech Trends I’ve Ever Seen

  1. Jeff Pluim says:

    I have been a business broker for over 26 years. In recent conversations with some clients, the general consensus is that these business men and women do not want their financial data out on the web in someone else’s cloud computer. Most of these people shut off or disconnect their computers when they leave their businesses, primarily because there is the secure feeling that no one can hack a turned-off computer. Everyone is aware that a teenager hacked the Pentagon computers, the supposedly most secure computers in the world. So how long until the cloud computers are hacked, with unbelievably disasterous effects for the businesses housing their private financial data there? And it could be en mass.
    Cloud computing may be a boon for the average Joe who wants to store irrelevant information on the cloud and access it at will with a handheld device like a smartphone, but for the business community??? I don’t see it, especially with the spotlight on security concerns world wide.

    • Michael Robinson says:

      Hi Jeff,

      You make a great point about security. That’s always a concern. However, there is no way around the key point that your data, some of it very sensitive, is already in the cloud.

      Every company on earth today uses the Web and has sensitive data stored either in its own data center or in a public cloud. This is the overriding central fact of the digital economy.

      The only way to avoid security issues is to go all cash and get off the grid, literally meaning, you wouldn’t even be able to read this reply back to you and you wouldn’t have been on the web in the first place.

      Having said that, I do pay attention to cyber security as all of us should. I do business with firms on line that I feel offer great protection against breeches. But even those with the most sophisticated firewalls and encryption technology can still get hacked.

      The Cloud continues to grow at an exponential rate because the overall value you get at any point in time — for millions of us — is much greater than the risk we’ll be hacked and financially ruined.

      Also, I keep supplies on hand to protect me and my family in case the whole grid gets shut down. I’m taking a hybrid approach, trust but verify online, have real world supplies like cash, silver, firearms, first aid kits, food and water in case some black-hat group crashes the Web.

      Hope that helps,


  2. Charles says:

    My problem with these recommendations is that they almost always come after a stock has had a significant run up. Where was this recommendation last November when the stock was trading at just over half of its current price, or even last month (April), when it was trading almost $3 cheaper? Seems to me it’s pretty easy to pick out a stock when it is selling at its highs. The real value is to pick it before that happens.

    • William Patalon III says:

      Dear Charles:

      My name is William Patalon, and I’m the executive editor here at Money Map Press. As our longtime readers here know, I’m one of those editors who welcomes comments from our subscribers — including constructive comments that “call out” stories we’ve written, recommendations we’ve made or stances we’ve embraced. I’m a former news guy, and am a big believer that a strong public discourse is healthy, and good for the country, and for an organization like ours.

      On that note, I welcome your comment — and applaud you for taking the time to write.

      That said, I must respectfully — and fervently — disagree with the assertion you’ve made here, that Michael only writes about stocks after they’ve already gone up in value … in essence, that he’s “driving in the rear-view mirror” as they like to say up on Wall Street.

      Nothing could be further from the truth.Truth be told, I’m absolutely baffled by your comment.

      In just the last month alone (look at the articles of May 3, May 10 and May 17), Michael has crafted detailed recommendations on stocks that his analysis shows have the chance to double.

      And those are just a few examples — I give you my word that it would be easy to continue.

      There’s an old investing aphorism that holds that “you’ll never buy at the very bottom, and you’ll never sell at the very top” — meaning that folks who try to achieve that impossible objective are doomed to failure. It’s a message that was repeated even more eloquently in the investing classic “Reminiscences of a Stock Operator” by Edwin Lefèvre (if you’ve never read it, I highly recommend it … the book is a fictionalized account of real-life trader Jesse Livermore, and is superb).

      The bottom line is that Michael’s looking for profit opportunities now. He’s talking about the profit opportunities he sees from here. And I know from watching him work that he’s got a record of delivering big returns. Very few readers would be disappointed with gains of 50%, 70% or a 100% from this point on — no matter what a stock might have done beforehand.

      Take some time to go back through the articles I’ve cited. I think that will give you much different perspective than the one you came in with.

      And please know that we’ll continue to welcome comments in the future. And I mean that….

      In fact, I hope that we continue to hear from you — for a long time to come ….

      Respectfully yours;

      William (Bill) Patalon III
      Executive Editor
      Money Morning & Private Briefing

  3. Patrticia Scott says:

    I am elderly & amp; need the money real bad. I got screwed by a couple investment companies, didn’t owe a thing previously. Now I am $40,000 in debt and just have Social Security as an income. If you come thru for me, I will be with you almost forever. Thanks

  4. LEO says:




    • Michael Robinson says:

      Hi Leo,

      Great questions. And thanks for taking the time to write.

      Always have an exit strategy. For most investors, that means putting on a hard stop. The easiest way to do that is to pick a figure with which you are comfortable and go with that. For each investor that’s different.
      Same thing with trailing stops. I recommend using those to protect profits. The hard part is to know when to get back in after you get stopped out of a great stock. But that’s a subject for another day.

      As for the time horizon, because I spend so much time doing research on stock I really like to own them for at least six months, three months at the very minimum unless the market stops me out. I generally shoot to hold them for up to two years.

      That’s for your main investments. Once you have a solid portfolio built up you can look for some short-term opportunistic plays. Those are the types of higher risk plays I normally reserve for my trading service Radical Technology Profits.

      Cheers and best wishes,


  5. Keemper says:

    It was a great recommendation especially for the world today enclosing everything into a quick saving data. Still, I will take note those substantial insights given from comments..

    Thanks and God bless everyone…

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