In investing, it’s important to stay up-to-date on the latest trends and developments. One area that often gets people excited is technology. And for a good reason: tech companies drive innovation, creating new products and services we can use daily. But what are some tech sectors poised to grow over the next few years?
The article below explores seven promising tech sectors that show no signs of slowing down anytime soon.
1. Cloud Computing
Cloud computing is a lucrative industry that continues to grow. But what exactly is cloud computing? Cloud computing allows users to access resources online rather than through physical hardware. This model for software development has taken off over the past decade and is now one of the most popular ways for companies to offer customer services and products.
Cloud Computing is an Industry with Huge Potential
Cloud computing will continue to expand as more people adopt new technologies, such as smartphones and wireless connectivity. According to Gartner research, in 2022, more than $494.7 billion will be spent by users on cloud services worldwide. A growth rate of 20.4% since 2021 from $410.9 billion. The report also forecasts that end-users expect to spend around $600 billion by the end of 2023.
This rapid expansion means there are plenty of opportunities for investors looking into opportunities within this fast-paced industry.
It’s a Relatively New Industry That Has Yet to be Monopolized by One Company
There aren’t many leaders in this field yet because it’s so recent. However, if one company becomes dominant, its stock could soar from its current level. As long as multiple firms compete against each other, you’ll want to keep your portfolio diversified across many different stocks. It ensures you avoid potential risks associated with too much exposure to one firm.
Amazon Web Services (AWS), Google Cloud Platform (GCP), Microsoft Azure Data Center Service Provider Program, etc., are some leading companies worth considering.
2. AI & Robotics
It’s no secret that AI is the future of technology. The ability to process huge amounts of data, make predictions, understand languages, and even drive cars makes AI-powered systems extremely powerful.
While AI is still in its infancy, it’s already being used in many applications we use every day, from voice recognition on our smartphones to autonomous vehicles. And as time goes on, AI will likely have an increasingly significant impact on society and the economy as it permeates more industries and everyday life. Some AI stocks worth considering include Splunk, UiPath, Upstart, Twilio, etc.
3. Internet Service Providers
Internet service providers (ISPs) are the companies that provide internet access to consumers. They can be called ISPs, mobile carriers, or cable companies. When you think about it, these services provide internet access to consumers.
Internet service provider stocks are a great investment because they’re growing rapidly, and the industry is expected to continue growing. According to IBIS World, the worldwide market for Internet service providers will be $1.1 trillion in 2022, with an average annual growth rate of 3.1% between 2017-2022.
Internet service provider stocks have steadily grown over the past few years, and there’s no sign of slowing down. With more people using the Internet for all sorts of things, including education and entertainment, ISPs are expected to see their shares rise even further. Moreover, these companies cater to some of the most profitable industries in the world, including tech giants like Google, Facebook, and Amazon.
The future looks bright for ISP stocks because they’re integral to every aspect of modern life. With countries like the US, China, Philippines, South Korea, and the UK adopting faster 5G networks instead of 4G ones, demand will only increase.
The Internet is the backbone for all tech-related companies and services, including social media companies like Facebook, gaming companies like Microsoft, and even streaming services like Netflix. As these firms continue to grow, so will their need for more bandwidth and faster speeds. It means ISPs can charge more for their service while increasing their profits.
Some ISP stocks worth considering include Verizon Communications Inc., AT&T Inc. (T), Orange SA, Telenor ASA, etc.
4. Mobile Technologies
Mobile technologies are a good place to invest because of their growth potential. Mobile devices are the future, and investing in them will give you a piece of that future. However, many mobile technologies can be plugged into your portfolio.
Mobile phone technology such as Apple Inc. makes iPhones and the necessary software. In addition, some companies make apps for mobile phones, like Google Inc., whose Android operating system runs on many different brands of phones, from Samsung Electronics Co Ltd to HTC Corp.
The rise in popularity of gaming apps over recent years has led game publishers to make money off their new games through microtransactions available within those games themselves. Think Candy Crush Saga or Clash Royale on iOS devices or Fortnite on PlayStation 4 consoles.
If you want an easier way to profit from this trend without buying stocks directly related to gaming companies, consider investing instead in retailers. Some retailers include GameStop Corp (GME) or Target Corp (TGT), which sell physical copies that players can purchase used online via platforms like GameStop’s own website or Amazon Inc.’s (AMZN).
5. Internet of Things (IoT)
IoT, or the “Internet of Things,” is a network of physical objects that can collect and exchange data over the internet. A simple example would be your phone automatically syncing with your vehicle’s Bluetooth system to read text messages aloud while you drive. According to an Insider Intelligence report, this technology has become so widespread that it’s estimated to encompass 64 billion IoT devices by 2026.
IoT is similar to cloud computing because it’s made up of many small pieces working together seamlessly. However, unlike cloud computing which requires only an internet connection for access, IoT requires not just an internet connection but also sensors and other hardware such as cameras and microphones.
According to Markets and Markets research, IoT will be worth $650.5 billion by 2026, with a compound annual growth rate (CAGR) between 2021–2026 projected at 16.7%. The rapid growth of this market means there are plenty of opportunities for investors will put their money into.
6. Renewable Energy
Renewable energy is the future of energy. The rapid growth of renewable sources like solar, wind, and hydro are well-documented. According to the Center for Climate and Energy Solutions, renewables accounted for nearly 29% of all new electricity capacity in the US in 2020, while most of it was by hydropower (16.8%).
In addition to growing faster than fossil fuels, renewables are more efficient and cost-effective than fossil fuels. As technology improves, costs will continue to fall further over time, making them increasingly competitive with traditional methods for generating electricity.
Investing in this sector can be lucrative because the market scope is huge. As per International Energy Agency estimates, renewable sources are expected to produce record electricity of around 340 GW in 2022. Still, that figure could grow as high as 60 percent by 2030. This means plenty more potential growth if you’re looking for an investment opportunity worth considering.
7. Data Storage and Processing
Data storage and processing is a huge industry. It’s an important part of cloud computing, one of the world’s fastest-growing tech sectors. This sector includes companies that build and maintain the computers that businesses use to store information and perform complex computations.
In addition to offering its online services like Google Drive or Microsoft Office 365, this sector also includes data centers where companies can rent space for storing their data. Data centers have become an important part of most modern businesses. They are used for everything from collating customer records to keeping track of inventory levels at manufacturing plants.
If you’re interested in investing in stocks related to cloud computing or data storage/processing, then here are some options: Amazon Web Services (AWS), Google Cloud Platform (GCP), Microsoft Azure, IBM Cloud Platform & Services Division (CPSD) and Oracle Cloud Infrastructure Suite.
These Tech Sectors are the Most Prolific
If you want to invest in the future of technology, then you must target these top seven tech sectors. The tech sector is the fastest growing and has the highest market cap. It also has more companies listed than any other sector, so there are plenty of options to choose from when investing. Moreover, innovation and revenue are at an all-time high in this space. It’s where new ideas are being created and developed daily by ambitious minds who aren’t afraid to take risks or think outside the box.