Over recent years, there has been no bigger opportunity for investors than technology.
The FAANG stocks alone have gained over $1 trillion in market capitalization since 2014 – and these stocks, along with other tech movers and shakers, have helped propel indices to constant new highs.
Growing Competition
While tech shows no signs of letting up on its dominance over markets, investors should know about two other multi-billion dollar sectors nipping at its heels. In today’s infographic, done in conjunction with SmallCapPower, we’ve highlighted the macro investment cases behind tech as well as these other high-growth areas: battery metals and cannabis.
For those interested, they’ve also published a watch list of nine stocks with double or triple-digit growth in these sectors.
The infographic highlights three of the top performing stocks in these sectors YTD. Don’t forget to see the full list of nine stocks.
Secular Trends
Like technology, the battery metals and cannabis sectors have upside attached to secular trends that are changing our world.
Technology: “Software is eating the world”
Battery Metals: The green energy revolution
Cannabis: Legalization and decriminalization of cannabis products
As a result, all of these sectors are poised to continue expanding at rapid rates:
| Tech | Batteries | Legal Cannabis | |
|---|---|---|---|
| Market size (2016) | $880B | $57.0B | $6.7B |
| Market size (2021e) | $1.03T | $82.9B | $20.4B |
| Increase (%) | 17% | 45% | 204% |
It’s worth mentioning that above projections are based on the overall IT sector, the rechargeable batteries market, and the legal cannabis market.
Further, it’s also important to recognize that individual subsectors within tech are growing much faster than the overall market as a whole, such as the blockchain, IoT, cybersecurity, SaaS, AI, and VR/AR.
Sustainable Growth Drivers?
While there’s no shortage of hype around tech, battery metals, or cannabis, it is also clear that all of these markets will only grow in importance over time.
In technology, for example, the slower-moving verticals like healthcare, government, finance, and education are only starting to get disrupted. The blockchain is in its early days and will touch many aspects of life, and AI alone is expected to have a $15.7 trillion impact by 2030.
Meanwhile, the green revolution is driving the future importance of battery metals like lithium, cobalt, nickel, and graphite. As EV penetration grows, so does lithium-ion battery use – and these metals are all needed to make them work.
Finally, the trajectory of legalized cannabis seems difficult to stop. In multiple states, cannabis is already available for recreational use – and in recently-legalized places like Canada and California, the recreational shops will open up very soon. However, the cannabis industry is still in its infancy, and many millions of people are still expected to gain access yet. This, like the other two industries, creates a fast-growing opportunity for both business and investors.
Article by Jeff Desjardins, Visual Capitalist
