5 Megatrends That Portend Tomorrow’s World
“I do not believe the introduction of motorcars will ever affect the riding of horses.”
That’s what John Douglas-Scott-Montagu, a member of the British Parliament, declared in 1903. That may sound absurd now, but it was the accepted wisdom of the time.
Just five years later, Henry Ford was mass-producing Model Ts. And within one decade, 10 million Americans were puttering around in motorcars.
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Automobiles aren’t alone. Breakthrough technologies often become commonplace necessities more rapidly than anyone can imagine at the outset.
The electric vehicle (EV) will be no different. This breakthrough technology will gain global popularity and market share much more rapidly than most folks expect.
Likewise, the energy storage technologies needed to make electric vehicles and other technologies possible will fan out across the globe at a spectacular pace.
These burgeoning technologies are the seeds of what I’m calling “The Second Electric Revolution.” These innovations are quickly becoming world-altering phenomena — the likes of which the planet has not seen since Thomas Edison demonstrated his new electric streetlights in 1879.
I expect the Second Electric Revolution to introduce sweeping technological advancements that will impact our daily lives in ways we can’t yet comprehend.
Already, electric vehicles are stealing market share from gas-fired vehicles, while renewable power technologies are grabbing market share from thermoelectric power generation thanks to utility-scale energy storage systems.
Both of these stories are very new and very big.
We’ve seen this movie before …
From Flip to Smart
In 2006, cell phones were still nothing more than mobile telephones.
Nokia Corp. (NYSE:NOK) and Motorola Solutions Inc. (NYSE:MSI) dominated the market with compact flip phones. Smaller was better. Each new cell phone design offered slightly better functionality than the preceding version, but at a lower weight and smaller size.
If someone had asked you or me back then what a cell phone would look like in 2020, we probably would have said it would be the size of a postage stamp, weigh about two ounces, and be clipped to our ear. We could not have guessed that cell phones would increase in size and offer the functionality of a laptop computer.
And if someone had asked us back then if Apple Inc. (NASDAQ:AAPL) stock was a better “buy” than Motorola or Nokia, we might have answered, “No way!”
That would have been a bad call.
The flip phone was about to perish, and the smartphone was about to burst onto the scene.
In January 2007, Steve Jobs announced the launch of the iPhone – and the world of mobile communication entered an entirely new paradigm.
Globally, consumers bought about 122 million smartphones in 2007. In 2019, they bought 13 times that number.
This story of breakthrough technological success has repeated itself over and over in history, especially here in the United States during the last century. Technological marvels like radios, televisions, washing machines, microwave ovens, and personal computers gained widespread acceptance at a lightning-fast pace.
Now, as we enter a whole new decade, five new technologies are growing so rapidly and profitably that they deserve the attention of every investor.
These five technologies are not merely delivering conspicuously strong revenue and earnings growth. Their growth trajectories are gaining momentum.
I believe these are the five technologies that will make investors rich in 2020.
Solar-Plus-Energy Storage
Solar power is no longer a profitless curiosity — it is a profitable industry that is attracting robust global demand. It is an idea whose time has come … especially for investors. According to the International Energy Agency (IEA), solar-power capacity will soar 13-fold by 2040, at which point this renewable source would be providing two-thirds of the world’s power needs. Moreover, the IEA anticipates global spending on solar power to total $4 trillion over the next two decades – or about $180 billion per year. If investment of this magnitude were to occur, solar power would become the world’s primary electricity source by 2040.
Payment Processing
Digital and card payments are the future. Gone are the days of cash and coins, and here are the days of credit cards and e-payments. As an enabler of noncash payments across multiple channels, Square Inc. (NYSE:SQ) is at the core of this transition. Its mobile devices, which attach to a smartphone, allow retailers of all shapes and sizes to affordably and easily process card payments. It has an online presence through software that does the same thing for e-payments. Square soared as much as 1,000% after its 2015 initial public offering – and is still up more than 400% from its IPO price. There’s another stock in this same space about to take off on a similarly profitable path, and you can bet it’s on my radar.
Online Gambling
Thanks to a 2018 U.S. Supreme Court ruling, sports betting is no longer illegal on the federal level. It’s now up to each state to decide if, how, and when sports betting operates within its borders. That means each of the 50 state legislatures and/or gaming authorities will determine the rules for its own state. By the end of 2020, analysts believe that more than half the states in the union will approve sports betting in some form – and up to 40 states by the end of 2024. Therefore, it is clear that a significant opportunity is developing. Estimates range from $150 billion to $400 billion in annual transactions, up from essentially $0 just a couple of years ago.
Artificial Intelligence
A recent study by Accenture found that in 12 advanced economies with combined GDPs of roughly $61 trillion, artificial intelligence (AI) can double economic growth by 2035. That’s leading to a whole lot of spending – and opportunities to make money – on AI technologies. IDC expected worldwide spending on AI systems to climb 44% in 2019 to $35.8 billion, with some $13.5 billion going to AI software platforms and AI apps. No wonder AI has quickly become red-hot. After all, the market opportunity is massive. Gartner estimates that spending on AI will grow at an average compound annual growth rate of 18%, reaching $383.5 billion in 2020.
Battery Metals
Today’s high-tech batteries require huge amounts of metals like lithium, cobalt, copper, nickel, graphite and vanadium. The average battery-powered electric vehicle requires 183 pounds of copper. That’s about four times the amount of copper the average internal combustion auto contains. A typical EV also requires about 120 pounds of graphite, along with significant quantities of nickel, cobalt, and lithium. The average solar project requires about five times as much copper per megawatt of capacity as a conventional fossil fuel plant. Offshore wind farms demand about 10 times as much. Meanwhile, the leading energy storage technologies also require massive quantities of “battery metals.” So the boom in EVs, renewables, and energy storage will create major “echo booms” in several metal markets.
These five megatrends will be booming for a very long time.
And so will five stocks I’ve spotted that investors can use to build their wealth as these tech trends soar.
I profile all five of these companies in a brand-new free report — Top 5 Stocks for 2020.
In this free report, I show you how and why these five stocks will grow so rapidly in 2020 … and beyond.
They deserve the attention of every investor.
Regards,
Eric Fry
P.S. Eric is now revealing his Top 5 Stocks for 2020 –all in a single special report — for FREE! Click here to get this FREE report – and to become a founding member of Smart Money, Eric’s brand-new FREE weekly newsletter.
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