Why Invest in Nanotech Stocks?

Nanoscience Investing
the word "nanotech" typed out

Nanotechnology impacts areas as diverse as cancer therapy and solar energy solutions. Here’s why investors should consider nanotech stocks.

The nanotechnology market is experiencing a promising stage of growth, making it an attractive space for investors.

From nanotech-based solar panels that increase energy efficiency to pharmaceutical products that make use of nanotech in drug-delivery systems, nanotechnology has far-reaching effects that are quickly transforming the world as we know it. Graphene-based nanomaterials also have applications across a wide range of industries, including renewable energy and medicine.

Here the Investing News Network provides a brief overview of what nanotech is, what the market looks like right now and what the nanotech industry's future could be. Read on to see if investing in nanotech stocks could work for your portfolio.

What is nanotech?

Nanotechnology is the manipulation of matter on a nanoscale — to put that into context, a nanometer is one-billionth of a meter, or approximately one-90,000th the width of a single human hair.

This micro-scale industry has the potential to produce macro returns for savvy investors. Nanotech has been lauded as the "next industrial revolution," and research and development into nanotechnology applications has major implications for almost every industry. According to Precedence Research, the global nanotechnology market is projected to reach US$288.71 billion by 2030.

What is the outlook for nanotech?

Back in 2006, Lux Research estimated that revenue from products using nanotechnology would reach US$2.6 trillion by 2014 (a staggering increase from the US$14 billion that nanotech produced in 2004).

Optimistic market predictions like that one spurred a flurry of nano-investing activity, including the launch of the PowerShares Lux Nanotech Portfolio, an US$89 million exchange-traded fund created by Lux Research and PowerShares Capital Management.

Ultimately, the PowerShares Lux Nanotech Portfolio didn’t live up to its initial promise. Despite predictions at the peak of the mid-2000s nanotechnology investing bubble, nanotech stocks didn’t achieve the rate of growth that investors had hoped for — after primarily incurring losses after its inception, the fund was liquidated in February 2014.

However, this news isn’t all bad. What has emerged out of a boom-and-bust market is an industry focused on strategic long-term business plans and in-demand innovative products. Many firms get steady revenue from nanotech products, which they reinvest in the market to drive innovation. For example, nanotech giant 3M (NYSE:MMM) uses nanotechnology in products destined for the dental, electronics, architecture and energy markets. Some of its core nanotech products include its Filtek series.

With an anticipated compound annual growth rate of around 14.5 percent between 2022 and 2030, the nanotech market still appears to be a promising investment. Although the dramatic anticipated growth rates of the mid-2000s are a thing of the past, what remains is a solid market that consistently produces exciting, far-reaching and potentially transformative products.

Smaller nanotech companies to consider

With the nanotech market poised for growth, nanotechnology companies of all sizes may benefit. Here are a few smaller-scale nanotech stocks, listed in alphabetical order, that investors may want on their radar:

  • Applied Graphene Materials (LSE:AGM,OTCQB:APGMF) has a proprietary process for making high-volume graphene nanoplatelets, and is targeting commercial applications in three core markets: coatings, composites and polymers plus functional fluids.
  • CVD Equipment (NASDAQ:CVV) produces graphene and nanomaterials such as carbon nanotubes and silicon nanowires to support development and manufacturing for battery materials used in electric vehicles.
  • Nano Dimension (NASDAQ:NNDM), founded in 2012, is a research and development company with a focus on advanced 3D printing and nanotechnology-based ink products. The company's lead products include the DragonFly IV 3D printer, as well as advanced nanotechnology-based conductive and dielectric inks.
  • Nano One Materials (TSX:NANO,OTC Pink:NNOMF) has developed a patented technology to process high volumes of advanced nanomaterials at a low cost, initially targeting materials used in lithium-ion batteries. It has a joint development agreement with Johnson Matthey (LSE:JMAT,OTC Pink:JMPLF), a multinational specialty chemicals and sustainable tech company, for lithium battery materials.
  • NanoViricides (NYSEAMERICAN:NNVC) was founded in 2000 and is a development-stage company in nanomedicine technology. It is currently creating nanotechnology-based biomimetic anti-viral medicines that it calls "nanoviricides."
  • NanoXplore (TSXV:GRA,OTCQX:NNXPF) is able to produce high-quality graphene in large volumes at affordable prices. The company’s GrapheneBlack graphene powder can be used in plastic products to greatly increase their reusability and recyclability.
  • Sona Nanotech (CSE:SONA,OTCQB:SNANF) is a nanotechnology life science company that has developed two unique gold nanorod products, Gemini and Omni, that are both toxin free. These products help fight some of the world’s deadliest diseases.

This is an updated version of an article originally published by the Investing News Network in 2015.

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

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

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