Disruptive technology is that technology or innovation that leads to the appearance of new products and services, it refers to new forms and technologies that can have an exponential value. For investors, exponential value means exponential returns.
After spending several years researching how to invest in disruptive technologies, Jeremy Abelson has learned a few truths:
1- The fact that a technology sounds super exciting does not mean that it can be commercialized at scale (graphene).
2- The fact that a technology is marketed with the support of some of the best investors in the world does not mean that it is successful (Bind Therapeutics).
3- And, each expert will have a different opinion on how he should invest in disruptive technologies.
Based on current world trends, Abelson indicates that there are certain technologies that have a very great growth potential for the coming years and it is necessary to take them into account if you are looking for investment options:
• Artificial intelligence.
• Robotics.
• Energy storage.
• DNA sequencing.
• Blockchain technology.
Now that you know which niches we should invest in, here Abelson will share some tech stocks you could invest in.
TESLA
Tesla, Inc. is an American company located in Silicon Valley, California, and led by Elon Musk that designs, manufactures and sells electric cars, components for the propulsion of electric vehicles and household batteries on a large scale. Tesla has had an exceptional performance this year, quintupled in value in just 4 months.
Abelson specifies that Tesla has become the most valuable carmaker in the world. One of the reasons is that the company was able to report very strong Q2 delivery figures after ramping up two new models, which helped prevent large unit drops that other automakers are seeing during the pandemic.
Alphabet or Google is one of the most innovative technology companies of the past decade, we have become dependent on its many services and that makes it a company with a solid business model.
As Abelson has specified, last year Google registered net income of more than 34 billion USD, currently almost 70% of its income comes from advertising on Google and YouTube. However, in recent years Google has diversified its investments and investing in new technologies, such as artificial intelligence, home automation and biotechnology.
Google invests in Artificial intelligence and robotics, for example, AutoML is a Google artificial intelligence whose purpose is to design and train other artificial intelligences to improve them beyond human capabilities. AutoML has the potential to operate without human bias and following a process similar to the evolutionary theory of Charles Darwin.
SQUARE
Square is a device that connects to the earpiece of any cell phone and is capable of reading any credit or debit card.
How does Square work? The process is simple: You go to a candy stall and realize that you don't have money, but you do have a credit card. You buy a chocolate cake, give the card to the seller, who passes it through the Square device attached to a cell phone. The worker passes the card and asks you to sign using your finger print.
In Abelson’s opinion, the growth potential for the Square Cash platform is huge. The Cash app is very likely to be a significant growth engine for Square's long-term free cash flow as new products are released on the platform.
Jeremy Abelson specifies that investing in fast-growing and revolutionary companies can be challenging. In this regard, we cannot always perfectly predict the evolution of the company in the future. However, if they are solid, innovative companies with a clear vision for the future, they can end up being great investment opportunities.
