Where tech goes, the entire U.S. market and economy follows. That means that, even if tech is driving the market higher and higher on average, the entire market is going to pull back when tech sees a downward move that’s so close to a correction that it might as well be one. But this is just a break from outstanding growth. And not only that, prices in tech are looking healthy compared to the broader market. It’s an important moment to avoid panicking and look for great opportunities to buy outstanding tech stocks at a discount. I’m expecting good things in the future for classic giants like Apple Inc. (AAPL) along with smaller firms like AudioCodes Ltd. (AUDC). Click to watch!
Archive for 2020
This month, I’m back with the second installment of the Strategic Tech Investor Monthly Mailbag, where I’ll be taking a look at some of the most pressing questions I’ve received about the direction of the economy.
I talk about the post-COVID future of Shopify Inc. (SHOP), the new rise of retail investors, the massive competition for an effective vaccine, and the future of the entire tech sector.
You can click on the video image below to hear all about what I have to say. And, for next month, if you have any questions about tech investments and the tech-driven market, leave a comment on this video for a chance of having it featured on next month’s mailbag.
I’m looking forward to hearing from you.
Chris Giattina is working with a top-flight software platform to transform the nation’s $3.6 trillion healthcare system.
And no, he’s not pioneering a breakthrough in genetics a or cutting-edge new drug.
His approach is a bit more basic. But in these COVID challenging times, his work is very important, not to mention profitable for savvy tech investors who know where to look.
Here’s the thing. Giattina is the CEO of BLOX, which is focusing heavily on making modular medical facilities.
Using its unique approach to construction, BLOX can have a 16-bed isolation unit ready for patient use in as little as a week.
That could prove a huge benefit in the continuing war on COVID. See, some cities and towns have found themselves short of medical facilities when there is a spike in new cases.
Given that BLOX is privately held, there is no direct way to invest in this disruptive tech, but you still have the chance to make money off of their disruptive building tech.
When you run a marathon, it’s better to focus on the finish line rather than each breath or stride. That was the first thing that came to mind this month as the tech-heavy Nasdaq sold off roughly 10% and Apple saw $180 billion erased from its market valuation in a single day, the most any U.S. company has ever lost in a trading day.
Focusing on the finish line is important not just in sports but also in the stock market. While the tech sell-off hammered markets over the last two weeks, it is important to look at the bigger picture. Just like a marathon runner might need to slow down to catch their breath, the market needs to do the same thing. A healthy pullback is good for any bull market.
Since the market collapsed in late February and early March the Nasdaq is still up roughly 60% and close to record highs. To me, the pullback is a blessing in disguise as the best tech stocks will continue to rise long into the future.
Remember, this is a marathon, not a sprint. Just look at Tesla Inc. (TSLA). Its stock dropped by almost 50% in 2018-2019, and in 2020, it had a similar drop. But if you would have held on for the ride instead of selling in the downturn, you would be up over 500% today.
The same could also be said for semiconductor company Nvidia Corp. (NVDA). It saw an over 50% drop at the end of 2019 and then in 2020 dropped 30%. But if you held on through the drops and even bought right at the previous peak, you would still be up over 70%. Going out even further, you could be up 10,000% and 30,000% respectively. Those are some big gains anyone would be crazy not to want.
That is why it is important to look at the bigger picture. The Nasdaq has its ups and downs and just like a marathon, it takes some time to get to the finish line. This month’s highs are still above the peak before the pandemic and this comes at a point when the economy is still far from recovered.
So, when I see pullbacks like this, I go back to tried and true companies that survive these market conditions and have the fundamentals to move higher.
And to help you do just that, I’ve keyed in on three of the best tech stocks you can buy. These companies will be stalwarts of your portfolio for decades, and they just happen to be “on sale” thanks to sellers with a short-term view of the world.
Well, over the next few months, there’s going to be a lot of hype about Ant Group, which if it hits analysts” expectations, could be the biggest IPO ever at $30 billion.
Of course, there’s a catch – shares will be listed in Hong Kong and Shanghai, making the Ant IPO out of reach for most U.S. investors.
However, I have a way to own shares of Ant without having to set up an international brokerage account or paying excessive fees to invest in foreign stocks.
Best of all, it’s a move you can make BEFORE the IPO.
Devan Smith had one foot in the grave.
After contracting COVID-19 last May, he was hospitalized with severe respiratory issues and multiorgan failure.
And if that wasn’t bad enough, the 42-year Pennsylvania warehouse worker also had to deal with a malfunctioning heart. That alone could have killed him.
But doctors at the Mercy Catholic Medical Center in Pennsylvania were able to save Smith in no small measure because of a tiny heart pump.
Known as the Impella, that device received an emergency use authorization from the FDA to treat coronavirus patients only weeks before.
Of course, Smith credits the medical team with saving his life. But he’s quick to point out that the Impella played a big role in it all.
And Bill is not alone.
These kinds of heart complications are reported to affect as many as 10% of COVID-19 patients.
Fortunately for tech investors, there’s a lot more going on here than a feel-good feature story.
The medical device market is worth $625 billion, and the company behind Impella can grab a big chunk of that.
To understand today’s investment potential, I have a visual aid that you can access right now.
In fact, it’s on your hand.
Take a moment and look at one of your thumbnails. Even if you have a large one, it’s probably less than one square inch.
Now, imagine putting 1,000 tiny electronic objects on it.
Seems like it would be pretty difficult to get all of those on there, right?
Now, imagine millions of tiny electronic objects are sitting on your fingernail.
Looking at your hand, that probably seems downright impossible.
And yet, it is possible – along with so much more – thanks to the advancements in semiconductors.
IBM, in partnership with Globalfoundries and Samsung Electronics Co. Ltd., announced in April that it is developing a 5-nanometer chip that could squeeze 30 billion transistors into a semiconductor the size of your fingernail.
These advancements will play a role in everything from connecting people to the Internet of Things (IoT) to increasing smartphone battery life up to three times to improving the longevity of your other tech devices.
This is big business, with the semiconductor market worth $430 billion.
Of course, as you can imagine, getting all of those tiny transistors to work is tricky stuff.
Today, I’m going to show you a leader in electronic design automation (EDA), which is essential to the design of semiconductor chips and making sure they work properly.
This aggressive firm can handle the core development work for chips, printed circuit boards, and all related hardware systems.
When we spoke on May 26, I noted that the whole field of robotics and artificial intelligence (AI) were not just things from science fiction novels; companies are using AI and robotics to produce real-world applications right now that could make you a lot of money.
If you invest in them today.
And software is just one part of the story here, which is why I want to look at the flip side of that investing coin – the hardware needed for software to run.
Specifically, I’m talking about robots.
The investment thesis has only improved since we spoke three months ago because there’s nothing like a global pandemic to put more emphasis on using intelligent machines wherever possible.
Doing so cuts down on the risk of infection for workers and can also add to the bottom line as a cost-saving measure.
So I believe that a recent forecast from market research company Mordor Intelligence showing a 25.4% yearly market growth through 2025 is too conservative.
Most investors would salivate over finding a tech sector growing at a 30% annual clip.
They’d be getting even more fired up if it was getting an even bigger boost from lockdowns and work-from-home setups.
And you could imagine the response if one of the hottest IPOs of the year was giving investors a chance to get in on the ground floor in this industry.
This isn’t just a hypothetical; it’s really happening in the video game industry.
The sector brough in $120 billion in revenue in 2019, and estimates this year are already pointing to bringing in $160 billion, over 30% more than last year.
With this significant growth in gaming, Unity has decided to file its S-1 statement and go public.
Now, Unity is no ordinary gaming company, but it is behind over 50% of all mobile, PC, and console games. As a leading platform for creating and operating interactive, real-time 3D content, this could be a great pick and shovel play if you are looking to invest in the growing gaming industry.
As a development platform, this means it gets to profit not just when Activision Blizzard Inc. (NASDAQ: ATVI) puts out a game, but it can make money from every single studio developing on its platform.
Chances are you have never heard of Unity, but if you have played Pokemon GO, FIFA, Madden NFL, Assassin’s Creed, Hearthstone, or Apex Legends, they have all used Unity to develop these games according to its public filing.
Joseph Papa was hired to turn Bausch Health Cos. Inc. (BHC) around. Instead, he is breaking it up. But he’s not crazy. He’s caught on to the fact that bigger isn’t always better.
You see, Bausch Health Cos. Inc. (BHC) and its subsidiary, Bausch + Lomb eye care, are two great companies, but together, they aren’t exactly chocolate and peanut butter.
Papa has realized that the only thing worse than no partnership at all is a bad partnership, so he’s letting Bausch + Lomb become its own $3.1 billion business.
This means that both companies will be free to focus on their own business models, their own specialized products, and their own target markets. It’s a move that’s going to create billions in new shareholder value.
And while I applaud the move, I think that there’s a better way to cash in on corporate spinoffs like this one.