The Best Tech Investments in 2017
The one thing you can count on in the tech world is that it is in a constant state of flux. By definition, the best tech companies to invest in operate on the edge of what’s possible, trying to bring tomorrow closer to today.
Sure, some companies develop a stellar product and rest on their laurels but, by and large, the tech industry is driven by innovation, and you’ll see that the companies on top all have one thing in common: a revolutionary technology. Having said that, what are the top three tech investments in 2017?
It’s important to remember that as time goes on, our technology has only continued to increase in importance. That’s why the most profitable companies in the world, like Apple Inc. (NASDAQ:AAPL), crafted an empire out of devices that didn’t exist 20 years ago. Before that, giant oil companies, consumer-facing products like soft drinks, and car manufacturers dominated the stock market.
Those days are over.
Take Facebook, Inc. (NASDAQ:FB) as a great example of a company that conjured billions of dollars out of thin air—or rather, digital code.
Where once people kept in touch via phones, mail, and e-mail, Facebook came in and revolutionized human contact in a way that had not been possible before its technology.
Now, with over 1.2 billion daily active Facebook users, you have an idea of just what is possible when a company crosses the tech threshold of today to break through to tomorrow.
And that story has repeated itself again and again and again. Apple, with the creation of the “iPhone,” Microsoft Corporation (NASDAQ:MSFT), with the introduction of “Windows,” and even Snap Inc (NYSE:SNAP)—with a slight twist on traditional messaging apps through a gimmick based on disappearing messages—morphed into tech giants worth billions of dollars
In fact, Snap’s recent initial public offering (IPO) netted the company a market cap nearing $25.0 billion. That’s an insane amount of money for a company that didn’t even exist a decade ago.
The reality is that the world is more tech-reliant than ever and, as such, the tech industry has the ability to produce massive returns on investments that other industries frankly cannot match. And that’s what makes it so crucial to be on the lookout for the next big tech innovation and the next big tech investment.
And there are tons of under-the-radar success stories that aren’t as heralded as Facebook or Apple, but still generate massive returns. Take Shopify Inc (NYSE:SHOP), a Canadian company that has quietly amassed over 145% gains in the past 12 months. Or Kinaxis Inc (TSE:KXS) which, since its IPO in 2014, has seen a gain of over 500%.
The money in the tech industry is very real, and very attainable to the investor with the right strategy and mindset. While the tech sector does have inherent volatility and susceptibility to competition—perhaps more so than other industries—at the end of the day, the reward is certainly worth the risk.
With all that out of the way, let’s get on with the top three best tech investments in 2017 and the companies that might harness them, as shown on the graph below.
Chart courtesy of StockCharts.com
AR in 2017
Apple CEO Tim Cook recently said this about augmented reality (AR): “I regard it as a big idea like the smartphone. The smartphone is for everyone, we don’t have to think the iPhone is about a certain demographic, or country or vertical market: it’s for everyone. I think AR is that big, it’s huge.”
(Source: “Apple CEO Tim Cook: As Brexit hangs over UK, ‘times are not really awful, there’s some great things happening’,” The Independent, February 10, 2017.)
Those are some strong words in respect to AR, and they come from one of the most powerful executives in the world. If Apple is hot on a trend, you can bet that customers are right around the corner.
While Apple (AAPL stock) has had its share of misses (*cough* “Apple Watch” *cough*), the company still has a great batting average, and AR seems to be the next forefront.
AR tech is rapidly increasing in sophistication and consumer relevance.
Look no further than the Pokémon GO craze that swept the world, sending millions of people scouring the streets, smartphone in hand, looking for colorful monsters to appear everywhere from coffee shops, to playgrounds, to post offices (and even the occasional cemetery, which was a tad morbid).
So, what is augmented reality? As the name implies, AR is essentially when one of your devices adds a “virtual” layer to the real world. In the case of Pokémon GO, players would view the world through their cell phones and see the monsters on their screens roaming about as if they actually existed in these neighborhoods, schools, or streets.
The game is a perfect example of the power of AR. It dominated the news cycle for weeks and made roughly $600.0 million in the three months following its release. (Source: “Pokémon Go is the fastest mobile game to hit $600 million in revenues,” VentureBeat, October 20, 2016.)
While the fervor did eventually flame out for the game, the world took notice: AR has arrived.
With that in mind, the company that is able to best master all the potential locked up in AR and get consumers to buy in will have a lead in one of the best tech investments in 2017.
AI in 2017
Another exciting tech investment is artificial intelligence (AI).
We’ve all seen the movies in which AI is able to do wonderful (and terrifying) things to the world, and those realities are seemingly closer than ever (the good ones, that is).
Many of the largest companies in the world are investing hard in AI, looking to take control of what may represent a turning point in human history.
But historical considerations aside, from an investing point of view, AI is a great tech investment.
The technology is on the cusp of accomplishing some truly astonishing acts.
Take, for instance, Alphabet Inc (NASDAQ:GOOG)-owned Google’s “DeepMind.” Nick Bostrom of Oxford University’s Future of Humanity Institute named DeepMind the leading developer of human-level AI. (Source: “Nick Bostrom: London’s DeepMind is winning the global race to develop human-level artificial intelligence,” Business Insider, October 5, 2016.)
And the list of achievements backs him up. Google’s DeepMind dominated us lesser mortals when it beat the world’s greatest Go board game players. Sure, robots besting us at board games is nothing new.
But, whereas chess has a rather limited set of outcomes, Go holds the possibility for far more move sets and outcomes. This makes a Go victory that much more impressive due to its high complexity and ability for players to develop novel and fluid strategies.
AI is coming. And it’s closer than you think.
More practical options have already landed with consumers. “The 2017 Voice Report” from VoiceLabs claims that 24.5 million voice-activated AI helpers like the “Amazon Echo” and “Google Home” will ship in 2017, a massive improvement over the less-than-10-million sold in 2016. This is good news for AI in 2017. (Source: “The 2017 Voice Report by VoiceLabs,” VoiceLabs, January 15, 2017.)
All this serves to make AI one of the top tech investments in 2017.
Energy Tech in 2017
Tesla Inc (NASDAQ:TSLA) is a company that hardly needs an introduction. It has become a dominant player in the auto manufacturing market, and hasn’t even fulfilled its true potential yet, which is to revolutionize the way we look at power.
With its massive robot “Gigafactories,” strides in autonomous vehicles, and the development of solar technology, Tesla is poised to become one of those revolutionary companies I mentioned at the beginning of this piece.
You could argue that this is already the situation. In which case, TSLA stock is looking mighty tasty right about now.
With a market cap exceeding some of the legacy car companies, Tesla has so many things going for it that it’s hard to say which move will produce more in the long run. Its impressive car tech? Or, how about solar panel roofs? Or maybe its position in the autonomous vehicle race?
No matter which way you slice it, it looks like Elon Musk is on the fast track to the tech annals of history as a powerful innovator.
If Musk’s plan can come to fruition and he can lead the energy revolution from the Tesla offices, we’re looking at what could become one of the biggest companies in the world in the near future.
With the “Model 3” (Tesla’s most affordable car yet) set to come out in 2018, and the hype surrounding TSLA stock, you have one of the better representatives of the top tech investments in 2017.
How to Invest in Tech
The first strategy that any investors worth their salt should follow is to know the company that they’re sinking money into.
Having found the companies that have the best potential to take advantage of a breakthrough technology or an emergent product on the horizon, jump in. You don’t want to be like the Facebook or Apple early naysayers and doom prophets who foresaw these companies going down in flames when, in fact, all that went down in flames was their opportunity to make massive gains on investments.
Look for the aforementioned technologies and the companies that are showing progress in their development. That will lead you to the top tech investments of 2017.