The pandemic has sped up the rate in which the market has altered—particularly in the realm of technology. Therefore, before investing in sectors of industry that may have seemed a safe bet in the years prior, it’s vital to reassess the stock market and take account of the most promising emerging industries to potentially earn millions.
For instance, investors in cryptocurrency have seen huge profits because they saw early on that this was an emerging industry. They recognised its huge potential and are now cashing in. For many, this is the goal. That leaves us wondering where to invest. Below we have highlighted several of the most exciting emerging industries to start your investing journey.
What Is an Emerging Industry?
First let’s look at what an emerging industry is: according to Investopedia, “An emerging industry is a group of companies in a line of business formed around a new product or idea that is in the early stages of development.” These companies often come about as one technology rises to prominence following another, older technology becoming obsolete. It’s important to note that stocks of companies in emerging industries can be volatile. That means that investing in these companies is a high risk and high reward venture.
Nine Emerging Industries
1. Artificial Intelligence
We’ve already seen artificial intelligence (AI) spreading into many areas of society and business operations. This trend will continue as artificial intelligence is continually developed and optimised to help in more ways, making it flexible and adaptable to various industries. AI has already become a part of the automotive industry with self-driving cars and the healthcare industry with virtual doctor visits. AI is here to stay, and it’s becoming more and more ingrained into our everyday lives.
2. Gaming and Virtual Reality
The gaming industry was on the rise even before the pandemic started, and has established itself as one of the most profitable segments of entertainment, surpassing the music and film industries. Now, the post-coronavirus world has more gamers who joined because of the lockdown, but many of them are likely to remain consumers. While virtual reality (VR) is a natural progression for the vastly profitable video game industry, its adaptability shows its staying power.
As Forbes reports, Covid-19 has sped up the need for digital collaboration. Virtual reality is being integrated into the financial, entertainment, transportation, retail, healthcare and security sectors via their business applications. We’re also seeing VR push into government and academia, cementing virtual reality as more than a trend.
3. Renewable and Alternative Energy
Although renewable energy is not new, it is being more prominent. We’ve seen the demand for electricity fall in 2020 while the demand for renewable energy has exceeded that of coal more than ever before (153 days in 2020 versus 39 in 2019.) With the U.S. rejoining the Paris Climate Accord and planning to invest $2 trillion in clean energy, we should see this industry accelerating financially in 2021.
4. Big Data Analytics
Big data analytics reviews large amounts of data, looking for hidden correlations and patterns. With new technology that can analyse big data and get answers in minutes, companies will be able to move more quickly than ever before. The result is cost reduction, faster and more informed decision-making, and new products based on consumer feedback. All of this means more money for companies that use this technology.
As technology grows and changes, our cybersecurity needs to as well. It will be more important than ever to protect our information as we continue to interface more and more with technology. We can expect to see cybersecurity technology develop and change to meet new needs — including utilising AI in new solutions. The cybersecurity market is expected to grow from $165.78 billion in 2021 to $366.10 billion by 2028.
6. Cloud Computing
Cloud computing as an industry is becoming increasingly standardised and compatible. Hosted private, hosted on-premises and public cloud infrastructure are allowing data streams to be much more mobile and workloads more portable. With this shift, we’re now seeing cloud computing supporting more processes, apps and services. The cloud computing market is projected to hit $760.98 billion by 2027.
Online commerce became even more prevalent during the pandemic as physical stores were shut. From essentials such as dry foods and produce, to luxury items and electronics, online shopping today has everything available at anyone’s fingertips.
Amazon is the best example of this trend. During a time in which its fellow tech giants were struggling to maintain their business, the retail giant was struggling to meet demand. As the largest eCommerce company in the world, the trillion-dollar brand could be seen as a strong indicator of the industry, showing that it, too, benefitted from the lockdown. Other examples include online retailer Overstock, which was up a whopping 143.86% since February following a better-than-expected earnings report, and furniture provider Wayfair, which skyrocketed 113.85% over the same period.
Numerous companies around the world, from small startups to the largest pharma conglomerates, began racing to develop a vaccine or other effective treatment to combat the virus. Among the scientific fields exploring possible solutions for the coronavirus is CRISPR. CRISPR-focused biotech company Regeneron saw a profit of 51.84% since February, as it has harnessed its velocisuite technology to track and record the pandemic. The innovative gene-editing method, which is said to be a potential cure for everything from HIV to ALS, is also currently being studied as a possible coronavirus treatment.
9. 5G Technology
The next generation of high-speed, wireless communication is already being deployed and is set to significantly improve almost every aspect of digital communication — including enabling more people to work remotely following the new demands of a post-Covid society. Smartphone internet access, Internet of Things (IoT), streaming video and gaming, as well as driverless cars are just a few of the technologies that will be improved, or enabled by 5G. Marvell, a leading player in 5G technology has climbed 39.54% in less than four months. Indicative of this, the company reported better-than-expected quarterly results at the end of May.
Emerging markets are very volatile, so it’s incredibly important to research before investing. You need to ensure that not only the industry but also the company you’re investing in has staying power. To avoid financial issues down the line, knowing where to invest your money all comes down to research. Considering that however, from AI to cloud computing to cybersecurity, it’s undoubtedly clear that technology will rule future industries.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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