How to Invest in Emerging Technology

- February 26th, 2019

As technology keeps on evolving, new sub verticals and new investment opportunities often show up for investor consideration.

As technology continues evolving, new sub verticals and new investment opportunities often show up for investor consideration.

Emerging technologies can be defined as the sections of the tech sector that are set to make a massive impact on human lives in the next decade.

On that note, the Investing News Network (INN) takes a look at the sectors that make up emerging technology and how investors can enter this space.

This article continues below the Emerging Technology Investing Table of Contents.

Emerging Technology Investing Table of Contents

The articles listed below provide an overview of investing in emerging technology from Emerging Technology Investing News.

Start Here – Investing in Emerging Technology

Growth of emerging technologies: what are they?

Several research firms, including PricewaterhouseCoopers (PwC) and Gartner, have reported to track as many as 150 different technologies, using their respective methods to identify the tech sectors that are “showing promise” and delivering impact in the next few years.

In 2016, PwC identified eight emerging technologies that is set to converge virtual and the physical world.  Dubbed the “Essential Eight,” these areas include artificial intelligence (AI), robots, drones, virtual reality (VR), augmented reality (AR), blockchain, 3D printing and the Internet of Things.

Meanwhile, Gartner identified 35 such technologies and each year publishes a report under the Hype Cycle for Emerging Technologies, which highlights the latest trends of these emerging verticals. In August 2018, the firm published a report showcasing when these emerging technologies will achieve their potential, highlighting verticals like 5G, virtual assistants and deep neural networks which are projected for massive increase between a two-to-five year period.

However, several technologies including smart robots, autonomous mobile robots, quantum computing, blockchain, AR, and mixed reality are set to reach its potential somewhere in the next five-to-10 year mark. Further, technologies like 4D printing, flying autonomous vehicles and next generation autonomous driving are set to achieve its tipping point after more than a 10-year mark.


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Future of emerging technologies: global market overview

Some of the biggest growth of emerging tech is forecasted for AI, which is predicted to reach a market value of US$300 billion by 2026 and growing at a compound annual growth rate (CAGR) of 38.8 percent between 2018 and 2026. The report published by Research And Market highlighted that rising demand for virtual assistants, coupled with increased implementation of cloud based applications, are set to fuel the growth of AI.

Meanwhile, robotics has been tipped to achieve a market value of US$147.26 billion by 2025. The report by Transparency Market Research said the segment will witness a CAGR of 17.4 percent by 2025. The firm said that the Automation, which has been labelled as a “buzzword” for many industries, is set to propel the growth of robotics industry.

Virtual Reality (VR) has made rapid strides in recent years with the innovation and the entry of several technology companies such as Oculus VR, a division of Facebook (NASDAQ:FB), and Microsoft (NASDAQ:MSFT). Research and Market predicts the segment will see an CAGR of 33.47 percent between 2019 to 2024. The firm said that the advancement of technology, coupled with the availability of VR at affordable prices, are driving the growth of the segment. According to the report, VR is set to reach US$44.7 billion by 2024, up from US$7.9 billion in 2018.

Stay ahead of new opportunities in emerging new technology investing

Experts and analysts share their insight on the top trends to look out for in 2020 across emerging tech industries.

How to invest in emerging technology: stocks

For investors looking to enter the space, stocks are the obvious choice for investment. Considering emerging technologies involve multiple sections of tech sector, there’s certainly no shortage of companies for investors. With artificial intelligence, robotics and VR predicted for the most growth in the space, here is a look at technology companies in the AI and robotics space mentioned in our robotics and AI stocks articles:

    • Rockwell Automation (NYSE:ROK): This company provides industrial automation power, control and information solutions through two segments: Architecture and Software and Control Products and Solutions. The former focuses on various hardware, software and communication components of Rockwell’s integrated control and information architecture, while the latter holds a range of products that perform multiple control disciplines and monitoring of applications.
    • Cognex (NASDAQ:CGNX): Cognex provides machine-vision products that obtain and analyze visual information in order to automate tasks where vision is needed. Cognex also offers machine-vision technologies, which are used to automate the manufacturing and tracking of discrete items, including mobile phones, medications and automobile tires.
    • NVIDIA (NASDAQ:NVDA): While the company created a name for itself by focusing on gaming, NVIDIA has switched its focus to deep learning, a subset of AI and machine learning powered by AI. The company’s graphics processing unit (GPU) now fuels computers, robots and self-driving cars.
    • Microsoft (NASDAQ:MSFT): One of the tech majors, Microsoft has shifted its strategy to enable digital transformation for the era of cloud computing. The company has a products range from mixed reality solutions to internet of things apart from traditional Office, Windows, Surface and Xbox devices.
    • Facebook (NASDAQ:FB): The social media giant that is engaged in building platforms which connects people across the world has stepped into the virtual reality segment with its acquisition of Oculus in 2014.

How to invest in emerging technology: ETFs

For investors who want to put investments into the emerging tech space as a whole rather than a specific company involved in the sector, ETFs are a popular way to go. While there are several ETFs that focus on the artificial intelligence, robotics segments, more ETFs have been launched in recent years that puts spotlight on other areas of emerging technology such as drones, VR and AR.

    • Defiance Future Tech ETF (ARCA:AUGR): With a focus on the AR and VR markets, Defiance came into being on July 31, 2018. The ETF tracks the BlueStar Augmented and Virtual Reality Index and holds 69 companies with Nintendo (TYO:7974, OTC Pink:NTDOF) and Snap (NYSE:SNAP) carrying the most weightage.
    • Drone Economy Strategy (ARCA:IFLY): This ETF  is designed to capture the growth opportunity in drone flight. Drone Economy Strategy came into being on March 9, 2016 and currently holds 54 companies with top weightage given to AeroVironment (NASDAQ:AVAV) and Boeing (NYSE:BA).

While emerging technology is set to make an impact in the near future, investors surely have plenty of options to consider.

Is there any particular category, stock or ETF that you’re excited about? Let us know in the comments below.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.


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