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Tech is the place where change creates wealth. New inventions mean new possibilities, and those new possibilities create profit opportunities. When it comes to investing, one of my most important rules is to “ride the unstoppable trends.”
To know which investments to make for the strongest moneymaking opportunities, you need to know how the world is changing. We can see this principle in action looking at this past year, when COVID-19 threatened America and the tech sector saved it.
The standout example is Zoom Video Communications Inc. (ZM), the company that has become synonymous with business meetings while offices are closed. For being in the right place at the right time to solve such a massive new problem, the company has gained over 300% in the past year.
To look at a much more prominent mainstay, Amazon.com Inc. (AMZN) has gained over 55% in value this past year as people have moved away from in-person retail.
The strong, highly profitable growth comes especially from the trend of COVID-19 driving people away from brick-and-mortar retail but more generally, from the trend of people now realizing that they don’t have to go through the hassle of going out if they need to buy something anymore. Tech has made that convenience, and the profits that go with it, possible.
That’s why I’ve zeroed in on some of the biggest, most transformative, and most disruptive up-and-coming trends in technology today.
Those trends are where you should invest to have the biggest profit opportunities in 2021. Not only that, but I also have included some of my favorite specific investment choices for you to make for standout results in those sectors.
Panasonic Corp. (PCRFY): The Electricity behind Electric Vehicles
With Tesla Inc. (TSLA) up by more than 300% over the past 12 months, it’s clear that electric vehicles are one of the hot moneymaking sectors for this year and the future going forward. But it’s not just a matter of one stock that clues us in on this unstoppable trend.
The newly elected Biden administration has announced a plan to replace every one of the 645,000 vehicles owned by the United States federal government with an electric model. The message is clear from both the public and private sectors; electric vehicles are the future.
The thing is, I would say that this isn’t a good time to be gambling on Tesla when it’s not plain to see exactly how much upside they have left ahead of them. With such stunning gains already in their rearview mirror, it’s unclear whether their next move will be up or down.
And they’re seeing stiff competition from China’s standout electric vehicle player, NIO Ltd. (NIO), which is up by more than 1,400% in the last one-year period.
When I invest, I like to look for pick-and-shovel plays that let us reap the gains from a sector’s unstoppable growth rather than betting on which player in a sector will nose out its competition and come out on top.
And the fact is you can’t have electric vehicles without electricity. That’s why I’m recommending that investors with a keen eye on electric vehicles invest in Panasonic Corp. (PCRFY), the supplier of the batteries that Tesla can’t operate without.
That relationship is a secure one, as Elon Musk announced in 2020 that Tesla has every intention of maintaining and expanding its battery supply relationship with Panasonic, buying as many batteries as Panasonic’s Nevada Gigafactory can churn out.
This includes Tesla’s new gold-standard 4680 battery, designed with the ability to fully charge in just 15 minutes and contain enough power for a drive of over 600 miles, rivaling the range of traditional gas-powered vehicles. Not only that but these batteries also have overall manufacturing requirements of less than half of their predecessors in terms of time and materials.
Already, the relationship is paying off for Panasonic, who recorded an annual revenue in automotive battery sales for the fiscal year ended March 31, 2020, of $4.75 billion, and they plan on boosting their capacity at their Nevada Gigafactory by 10% in 2021, allowing that figure to press even higher.
But Panasonic isn’t satisfied acting as a battery-producing sidekick for Tesla. They plan on expanding the scope of their market presence across the entire electric vehicle sector. They have a partnership in place with Toyota Motor Corp. (TM) to produce batteries for an additional 500,000 vehicles each year at a factory in Japan. With Toyota aiming for electric vehicles to make up 50% of all of their sales by 2025, Panasonic is perfectly positioned to meet the rising demand.
Moving even further into the future, Mazda Motor Corp. (MZDAY), Subaru Corp. (FUJHY), and Honda Motor Co. Ltd. (HMC) have all struck deals to use Panasonic batteries in their future electric vehicle projects, leaving the battery maker poised to capture a dominant share of the market to supply batteries for EV manufacturing.
Since the market started to recover on March 16, Panasonic is up by over 106%. Not only have they doubled but they’ve crushed the broader market’s return of only 66%.
As the company shifts its focus from the lackluster sector of consumer and home electronics to more profitable ventures such as this key supporting role in the expanding electric vehicle sector, they have the potential to see massive upside in the near future.
That sector is projected to almost quintuple in value between 2019 and 2027, according to Allied Market Research. I expect that it will take the indispensable Panasonic right along with it.
Semtech Corp. (SMTC): 5G Is Just Getting Started
Before 2020 was the year of COVID-19, it was the year of 5G, and right now, the once-in-a-century disruption to the global economy might be making some people a bit unsure of the future of this next generation in wireless standards.
So let me just say this: 5G is still coming, and its potential scope is as strong as it’s ever been. According to ResearchAndMarkets and summarized by the Associated Press, the global market for 5G infrastructure is projected to experience explosive growth in the next few years.
Starting from a value of about $2.2 billion in 2019, the sector is projected to multiply nearly 10 times over and reach a value of $18.5 billion as soon as 2023. And the Associated Press points out that one of the most important pillars driving this growth is going to be the Internet of Things (IoT).
The basic idea of the Internet of Things is the integration of everyday objects with online network functionality. It means a future where everything from basic household appliances and functions of civic infrastructure, like streetlights, are all connected to the internet.
This new form of networking application has an even more impressive predicted scope than 5G infrastructure itself. Fortune Business Insights projects that the global IoT market will grow more than five times between 2019 and 2027, from just over $250 billion to over $1.4 trillion.
And the absolutely crucial link between the 5G wireless buildout and the rising Internet of Things comes directly from Semtech Corp. (SMTC) and its special high-tech infrastructure protocol that they call LoRa.
LoRa stands for “long range” and is a system for transmitting signals that lives up to that name while also minimizing power draw. These advantages have made its use extremely widespread in IoT networking around the world.
Right now, there are 1.2 million LoRa-based gateways that have been deployed around the world. Not only that but as of the end of 2020, it is estimated that 180 million end nodes on public and private networks are based on LoRa technology today.
Additionally, LoRa technology is used by 148 network operators in 99 countries, and it is predicted that by 2023, Semtech’s LoRa will be used in 43% of the kinds of low-power and wide-area networks that work best with the Internet of Things.
With the sector primed for meteoric expansion and Semtech’s LoRa primed to capture an impressive market share, the financial prospects for investors are extremely promising. Since the start of the market recovery on March 16, it’s already up by almost 120%. It’s nearly doubled the broader market’s 66% return over that same period.
With both 5G wireless technology and the Internet of Things projected to experience overwhelming symbiotic growth, Semtech is in a perfect position to continue its outstanding trajectory into the future.
Moderna Inc. (MRNA): The End of First-Gen Vaccines
You may not know about this, but most American vaccine manufacturing is done using a technique that dates all the way back to the 1950s. The viral samples used in the vaccine are grown inside of chicken eggs before they are rendered harmless and prepared for injection into patients.
It’s a slow and inefficient method that’s well overdue for a high-tech disruption. That was true even before COVID-19 made the process of creating new vaccines a top priority for the biotech industry, the United States of America, and the entire world.
That’s where Moderna Inc. (MRNA) comes in with its technology for creating vaccines based on messenger RNA (mRNA). Since mRNA is already the key within human biology to transmitting information within cells, it’s a natural fit for vaccines that teach cells to defend themselves from illness.
Naturally, this cutting-edge vaccine leader is driving forward with one of the earliest COVID-19 vaccine candidates, which was approved for use on December 18, 2020. The resulting vaccine has been appraised at up to 96% effectiveness at preventing COVID-19.
That extremely high effectiveness number puts it on par with the Pfizer BioNTech vaccine while also being much easier to store and transport. It only needs regular home freezer temperatures for long-term storage and can last for 30 days under normal home refrigeration.
That makes it far more convenient than the highly specialized freezing equipment that the Pfizer vaccine needs to remain stable.
The thing is, though, the COVID-19 vaccine is just the single leading edge of what makes Moderna as a play on mRNA vaccines such a promising investment. The mRNA technology promises an entirely new generation of vaccines that will transform the entire concept of immunization going forward.
Moderna is surging ahead, implementing this breakthrough in as many different contexts as possible. They currently have no less than two dozen active projects, including vaccines for notorious ailments such as HIV, the Zika virus, and, in several different instances, influenza.
Not only that but they are currently working on no less than five different mRNA vaccines for cancer and tumors.
In the six months between August 2020 and February 2021, Moderna increased in value by over 110%. It’s worth keeping in mind that these gains included the results of the COVID-19 vaccine approval, but Moderna began its rally even before that date.
In fact, with so many additional chances to announce breakthrough vaccine results, the odds of Moderna showing even more market-crushing gains for the entire foreseeable future and dominating the entire vaccine industry just when it’s needed most are very strong.
One can tell by Moderna’s ticker symbol (MRNA) that the firm puts a huge emphasis on its leadership in the field of mRNA, but what one can further determine by examining their pipeline of upcoming projects is that they mean to take full advantage of this breakthrough to completely shake up a technological field that is in dire need of shaking up.
Riot Blockchain Inc. (RIOT): Visionary Cryptocurrency Leadership
The ways we think about money today are different than they were even one year ago. Over the year 2020, in which COVID-19 dominated the commercial landscape, digital purchases reached heights that were previously unknown.
According to a report from Business Insider, the pandemic caused the digitization of the payments industry to leap ahead by about two or three years, and online sales set a new record by comprising 14.4% of all American retail sales.
It’s clear that the idea of money as a purely digital entity is stronger now, in a world where so much of everything has become digital, than it has ever been before. And we can see an extremely powerful moneymaking opportunity in the form of Riot Blockchain Inc. (RIOT), a play on cryptocurrency.
The concept of cryptocurrency is perhaps the fullest possible manifestation of the entire concept of digitized money and e-commerce; it is money that exists entirely within cyberspace. Among cryptocurrencies, the original example, Bitcoin, stands out for its prominence.
Over the course of the year 2020, it’s growth in value has been nothing short of stellar, with gains of more than 300%. And when it comes to targeting the growth potential of Bitcoin, Riot Blockchain is taking on the sector with first-rate leadership, expertise, and strategy.
Riot is a company that performs Bitcoin mining, a highly profitable growth direction given how Bitcoin has been moving recently, but it would be a mistake to assume that Riot is just a “Bitcoin mining company.”
They have their hands in projects aimed at modernizing and improving the economy of digital and electronic currency. They back TessPay, a project aimed at using blockchain technology to create safer and more secure escrow services, and Verady, a project to create accounting and auditing systems and services that are up to the standards that cryptocurrency assets demand.
At the helm, Riot boasts an all-star team of experts with the wide set of skills necessary to guide a firm making its way in this breakout sector.
At the overall head, in the CEO position, is Jeffrey G. McGonegal, with a rock-solid accounting background. He has over 40 years of experience in senior accounting positions, including working as an audit partner with a top national accounting firm, and also has expertise in the high-stakes accounting practices surrounding mergers, acquisitions, and IPOs.
This accounting expertise is further supported by VP of Finance Megan Brooks, whose nearly 20 years in accounting is specifically specialized in navigating new areas of regulation, a must-have in the uncharted waters of the cryptocurrency environment.
The firm also boosts outstanding expertise in the cryptocurrency environment in the form of its lead blockchain engineer, Karl Diab, and its head of mining operations, Paul Pascual; both are Bitcoin early adopters who have been working with the leading cryptocurrency as far back as 2012 and 2013, respectively, when it was still new.
With this dream team at the helm, Riot is well positioned to navigate the uncertain but fast-flowing waters of the emerging cryptocurrency sector.
During 2020, its value was up by nearly 1,300%, not only beating the broader market but beating out even the incredible growth of Bitcoin. It’s gone up even more since then, but I still see plenty of upside ahead.
SPACs: The New Way to Go Public
Today, a new path to going public is sweeping the world of pre-IPO tech companies and offering a new exit strategy for the founders and investors looking to profit off of the dynamic growth of new high-tech startups. I’m talking about a SPAC, or “special purpose acquisition company.”
The basic idea behind a SPAC is to start a company that doesn’t yet have its own business plan or model. Instead, as its name suggests, it immediately goes public and uses the IPO to buy out a promising privately held company.
Then, after the purchase, that formerly private company becomes the SPAC’s main asset, and the SPAC adopts that company’s model and business. This creates a much more flexible way for startups to reach the public stock market, allowing for more dynamic growth than was possible under the old IPO system.
These businesses are called “blank check companies” because the IPO creates a “blank check” for the management to carry out their buyout, but if that sounds risky, it doesn’t have to be. They key, as is so often the case when looking for profitable investments, is the management.
A SPAC may not have its own business foundation, but it can sure have vision behind it. A leader who understands the innovative potential that a business can have, will pursue growth opportunities above all, and at every possible moment, and can make sure that they choose a private company with maximum potential. They can continue to push that potential toward growth from that acquisition onwards.
We can look at some of the most successful SPAC “reverse mergers” to see this principle in action. The popular online sports gambling venue DraftKings Inc. (DKNG) was brought to the public market by a SPAC dream team consisting of Harry Sloan and Jeff Sagansky.
That’s important because the DraftKings move was the fifth SPAC that the two of them had founded. With all of that experience behind them, it’s no wonder that DraftKings turned out to be such a success when it went public in 2020. It started out with a value of $3 billion and has since gone all the way up to more than $24 billion, more than eight times the value that it started with.
It is a perfect example of the main principle to keep in mind while investing in SPACs, leadership is key. Investing in SPACs can be a tricky business, but keeping that in mind is the best way to maximize your chances of success.
My favorite place to keep an eye on the hottest new SPACs as they look to make their buyouts is SPAC Track, right here. And true to that principle of SPAC investing, one of the most prominent pieces of information that they list is who is in management for that company and what their most notable resume bullets are. It’s the best way to get started with SPACs.
The Road to Wealth Goes On
With these picks and approaches to high-tech investments, you’ll have the best possible chance to make outstanding, market-crushing profits on the leading and most disruptive sectors in today’s fast-transforming markets.
The technologies and investment sectors I’m talking about here are the ones that are only just now capturing the buzz of the world of tech investing but are on their way to becoming household terms across all of society in just a few short years.
The key to success is to read those trends and jump on board ahead of the main pack and being able to do that requires careful analysis. In fact, this is the exact kind of analysis that I provide for subscribers to my free investing newsletter, Strategic Tech Investor.
Cheers and good investing,
Michael A. Robinson