Technology, as they say, is accelerating. There are multiple technologies that are interesting: here I focus on five.
Five cutting edge technologies you may want to invest in
Four plus two, minus one
Accenture recently coined the phrase DARQ, to describe four technologies that will prove to be catalysts for change. The acronym stands for distributed ledger, artificial intelligence, extended reality and quantum computing.
The only snag with this list is that not all the technologies are easy to invest in, blockchain especially is fraught with difficulty. Sure you can buy directly into say bitcoin or ethereum, but for the sake of this article I am going to exclude blockchain.
But I am going to add two technologies to the list: robotics process automation and genetics. There is a lack of British companies that are listed on the stock market in these areas; but there are a few.
I have looked at investing in artificial intelligence or AI before. PwC recently projected that AI will boost the global economy by $15 trillion by 2030. Most of the big players are the giant techs we keep reading about. I would say that Alphabet is top of the pack, and for more than one reason. For one thing it owns DeepMind, the British based company that built the AI systems that have been gaining headlines around the world for winning the Chinese game of Go — something that had previously been considered impossible for a computer. But Alphabet also engages in lots of research into AI, which is independent of DeepMind. At the moment, Alphabet sits at number four in the list of the giant techs, by market cap. I have a feeling that its AI expertise will catapult it to the top slot within a few years. Not that Amazon hasn’t invested heavily in this area.
Other AI companies that are pretty much at the cutting edge are Tesla and Nvidia — it’s Tesla’s expertise in AI and batteries that make it interesting to me, not as a car manufacturer. IBM is still a player in this area, too.
As for British AI companies, Darktrace is interesting. It specialises in applying AI to fight cybercrime. But the company isn’t listed on the stock market. The best way to invest in the company is via its shareholders, including Samsung SDS and Kohlberg Kravis Roberts.
Robotics process automation
Robotics process automation, or RPA, is a process that uses software to automate certain tasks. There are two types of RPA systems, attended and unattended. The latter relates to the automation of tasks from end to end, and typically applies to back-office functions. Attended applies to software robots that are more like an assistant, that help employees and sit on a computer desktop.
Leading players include UiPath, Automation Everywhere and Blue Prism.
Of the three, Blue Prism is the only listed company, and furthermore it is British. I will be looking at this company in more depth in a future article.
If you want to invest in UiPath, one route would be to buy shares in Alphabet, one of UiPath’s main shareholders.
I am a fan, but I don’t think the technology is ready yet, not to create a true mass market. Virtual reality has the potential to be transformative in a quite deep and scary way — as if we are living movies, for example. But for the time being, the technology has too many limitations. When the technology is ready, prepare for rapid change. Facebook is in pole position with its ownership of Oculus Rift — but it could be another five years before this medium truly takes off. For the time being, the applications of virtual reality will be niche, but important, such as pilot training simulators and maybe in surgery. I suspect augmented reality is closer, but even this technology isn’t right yet. Using a smart phone to superimpose reality doesn’t quite cut it for me. Only when we have augmented reality glasses and contact lenses will we will see a mass market. But the mass market will emerge, both Microsoft with HoloLens and Apple are in the lead. Augmented reality and maybe wearable health tech are the reasons why I think the Apple share price has plenty of growth to come in the future.
Quantum computing will be one of the most transformative technologies ever — it will be every bit as significant as the internet. But we are at the very early stages — at the moment, a quantum computer can only work at temperatures of minus 273 degrees centigrade. I would say that at present, quantum computing is akin to silicon based integrated circuits back in the early 1970s. I am not sure that we will ever have quantum computers sitting on desks or in our pockets — although I say that with half a mind on a prediction in Popular Mechanics in the late 1940s, that one day a computer may only weigh one and half tons. At the moment, developing a quantum computer requires big bucks, seriously big bucks. IBM and Alphabet are the two main players.
Incidentally, I wonder about IBM. I have heard it compared to a tanker, taking too long to turn around. But IBM is into some seriously cutting edge stuff — it may come back as a rival to the biggest techs.
It is quite hard to predict which of the new technologies will have the most profound impact, but genetics science, such as genome sequencing and gene editing technology such as CRISPR/cas9 may well emerge as the most transformative of the lot. Not that you can divorce it from the others: AI and quantum computing in particular will play key roles in this area.
IBM and Alphabet are among the companies at the cutting edge, but a small British tech: Oxford Nanopore, is also interesting. In MIT’s list of the world’s 50 smartest companies, a list that includes the likes of Tesla, SpaceX, Nvidia and Alphabet. Oxford Nanopore and Blue Prism are the only British companies to make the list.
Oxford Nanopore, most noted for developing a portable DNA sequencer, is not listed on the stock market. However, Woodford Patient Capital Trust is among the shareholders.
These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees