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It’s hard not to get sucked in by the allure of new technology trends. We’re in a time where the pace of innovation is extremely visible, due in no small part to the sheer variety of consumer electronic devices that offer extremely attractive features.
That same attraction applies to a growing number of tech stocks. I’m not saying I want to buy every tech stock out there – to be sure there are a lot of duds. And there are plenty of examples where valuations need to come down a bit.
But those caveats stated, it’s still the case that for every twenty “new” technology stocks I look at I’m compelled to dig deeper into at least a handful. And my watch list has expanded to around a half dozen that I consider to have very real potential to double over the next 18 months.
Over the last couple of years we’ve seen a number of disruptive technology breakthroughs, like 3D printing, that have completely changed the manufacturing game.
At the same time, there are numerous examples of technology trends and innovation that I’d characterize as more evolutionary than revolutionary. Wearable technologies are one. And the greater functionality of mobile devices, like interconnectivity, where you can control your home thermostat from your phone, is another.
Wearable tech is the new hot technology trend to watch. Items like the Nike (NYSE:NKE) FuelBand, GoPro camera and Samsung Galaxy Gear smartwatch are already selling well. The next iterations will be even lower profile wearable cameras, brain monitors and motion sensors.
Other applications will be things like Google’s (NASDAQ:GOOG) Helpouts application for professional training and impact sensing for race car drivers and football players.
The clear winners in all of this are the component manufacturers, especially specialized semiconductor companies. The ones that are linked up with the major manufacturers have an opportunity to grow exponentially as consumer electronics, like wearables, tablets and smartphones, enter their next stage of evolution.
For the semiconductor companies that provide chips to a broader set of customers, the pressure is heating up. As competition (especially in the tablet and smartphone market) intensifies, companies are starting to introduce and retire new products much more rapidly. This is putting tremendous pressure on semiconductor companies to try and stay ahead of the curve.
It’s a monumental challenge to make the “next” great chip in quantity, with few defects, while having the “next, next” great chip also in development. This creates an opportunity for companies that help semiconductor manufacturers improve their yields, and reduce defects.
For many small tech companies, the upside is tremendous. Not every stock that seems to fit the profile will be a winner of course. But by focusing on the companies that communicate a clear mission of what they’re trying to accomplish, and support that mission with a track record of performance, investors can participate in tech’s next great growth spurt.
Later this week we’re holding a special event during which I’ll talk more about technology trends, as well as some emerging consumer trends that should pique your interest. Click here to register for this special event.
The One Stock to Own in 2014 — The Year Mobile Takes Over!
On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops — but from mobile devices including smartphones and tablets. We’re never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone… here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.