Technology stocks have their periodic downturns, but overall, investors and analysts agree that this sector is where future profits lie. After all, tech companies are the innovators and disruptors that are transforming everything from communication and finance to transportation and medicine.
People stay connected with friends, family, and the businesses they patronize through social media. The entire lending industry has been upended by new methods of measuring creditworthiness. At this very moment, tech companies are developing self-driving vehicles, and it was biotechnology firms who created a new type of vaccine that is working to bring the COVID-19 pandemic under control.
The future will integrate big data, machine learning, artificial intelligence, virtual reality, and augmented reality to create an entirely different experience for consumers. That means there are endless opportunities for investors to get on board with strong companies in the early stages of creating tomorrow’s technologies.
The five established tech leaders, Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOG), are still solid options, but the chance to buy shares at startup prices has passed. If you are interested in companies that are poised to become industry staples, consider these new technology stock leaders.
Nvidia Powers AI, Virtual Reality, Electric Vehicles+
All of the devices consumers use to maintain their digital lifestyles have one thing in common. They are powered by computer chips. These small bits of hardware feature silicon – a semiconductor – that makes it possible for digital devices to send and receive information.
Chip companies like Nvidia are at the center of the technological revolution, and there is heavy demand for each and every chip they produce. In fact, they can’t keep up. Of the chipmaker group, Nvidia is thought to be the top contender for substantial growth because it already knows how to win in a world where speed and power are everything.
Nvidia makes the most popular graphics cards in the world. In the first quarter of 2021, it commanded a massive percentage of the total market share. The biggest cloud service providers rely on Nvidia chips, and Nvidia is found in almost every PC designed for gaming.
The company’s reputation has made it the first choice in the creation of cutting-edge technologies. Advanced speech recognition services rely on Nvidia, and these chips are being incorporated into autonomous vehicle design.
Experts believe that Nvidia technology may lead the industry in machine learning, which is a critical factor in harnessing the potential of artificial intelligence.
Nvidia is already growing at a rapid rate. In its fiscal first-quarter earnings call, the company reported an 84 percent increase in revenue year-over-year. That growth is expected to continue in the coming months and years, as Nvidia is one of the few companies prepared to usher in the next generation of technology-driven solutions. In other words, Nvidia is a smart choice for investors in search of new technology stock leaders.
Roblox Has Generation Alpha En Masse
Facebook, LinkedIn, Twitter (TWTR), and the like have a stranglehold on social media – for now. They cater to adults, and they rely on their massive network-based moats. Each brand is valuable because of the sheer volume of users. However, if you look closely, you can see that none of today’s leaders is fully prepared to win the network war long-term.
That’s because user populations are aging. For example, Facebook (FB) started off in 2004 as a platform for college students. Now, those same Millennials are entering their 40s, and all of their parents have joined them on Facebook. The network is growing older, and Facebook hasn’t yet captured the next generation.
Generation Z, now in their late teens and early 20s, regard Facebook as a dinosaur. The group behind them, Generation Alpha, is coming into an entirely new type of social networking experience. Enter Roblox, which was recently named the most innovative company in gaming by FastCompany.
Roblox was originally designed to give kids access to unique gaming experiences. Users create games and play the games created by peers – and Roblox pays for the user-provided content. The company makes it possible for anyone to develop an original experience and launch it into the world, because it offers game design tools that do not require complex coding skills.
It’s worth noting that as Roblox’s user-base grows, developers are becoming more sophisticated. What they once supplied to the platform as a hobby has become a full-time job for some. Those who develop the most popular experiences can earn thousands – even tens of thousands – for their productions.
Roblox noted that in 2020, it paid a total of $328.7 million to developers. That’s a 200+ percent increase over 2019. The company plans to increase developer payouts to encourage more and higher-quality content that takes advantage of immersive technology to bring players together in imaginary worlds.
Whatever Roblox is doing works. In 2020, the company increased revenue by 82 percent year-over-year to a total of $923.9 million.
Why do analysts think that’s just the beginning?
A large proportion of its consumer base is under the age of 18. That means Roblox’s current users will grow with the company, making Roblox a smart choice for technology investors.
Upstart Disrupts The Credit Industry
Last – but not least – on the list of must-haves is Upstart (UPST), a new type of lending company. Instead of making credit decisions based on basic credit scores, Upstart uses artificial intelligence and a complex algorithm that considers hundreds of creditworthiness factors. Examples include work history, education, and profession.
Upstart’s methods have been highly successful in two ways: more applicants are getting approved for loans, and so far, the rate of default has been lower as compared to loans made through traditional processes.
Smaller banks have been eager to partner with Upstart to increase lending and reduce risk. Soon, industry analysts expect to see partnerships with larger financial institutions. That means there is nearly endless opportunity for Upstart to grow and expand. That’s why this company caught investors’ attention as one of the most exciting new technology stock leaders in the market today.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.