Technology Stocks: Search for Disruptors
The spectrum of technology companies has become more diverse in recent years. Tomorrow's winners are sometimes hard to identify. In any case, just watching the classic technology indices is not enough. Amazon, for example, a real big player among the tech giants, is actually classified as a retailer . Mark Hawtin notes this in a market commentary that is currently receiving much attention. Hawtin thus partially abandons the prevailing definition of this sector. He believes that important disruptive issues in the sector will shape the discussion in the future. These disruptive trends should be kept in mind from a corporate and consumer perspective, says Hawtin. As examples, he cites the trend towards cloud storage versus traditional physical storage on local storage media and the potential of digital advertising that is beginning to prevail over traditional TV and print advertising. If you have tracked down such trends, you should find as an investor those companies that could benefit the most. The network effect Hawtin considers authoritative. Anyone who controls networks , by far the biggest profits. As an example, he calls Facebook in its lineup in mobile advertising : The social network dominates this segment almost totally. New entrants have an incredibly difficult time. Almost 100 percent of the profits go to Facebook. This seals the growth position of this company in the long term.
Technology change through networking
Hawtin considers technological change through networking to be very important. As the Internet offers limitless networking opportunities, any service provider can build a global digital ecosystem . As examples, the expert mentions Airbnb , Uber , Alibaba and Facebook. Consumers are also networked, which has changed their consumption habits: they listen to music with Spotify , save data with the Dropbox , watch movies with Netflix . This has become absolutely commonplace.
Chances for storage solutions
Interesting opportunities arise in the opinion of the fund manager in the field of storage solutions . The demand for it is increasing rapidly - by about 35 percent per year. Here Hawtin makes a very sustainable trend , because the storage requirements are currently rising through AI, big data and networks . Three technologies currently dominate this market:
- Dynamic Random Access Memory (DRAM)
- NAND Flash (non-volatile storage for data storage without power)
- conventional hard drives
Hawtin expects that soon there will only be a few players in the respective markets. This would be to find it now, because they could grow into absolute giants like Google, Amazon, Apple or Facebook. However, one must observe to what extent hardware and semiconductors would become commodities and to what extent they can be classified as a cyclical growth business .
Disruptors in big data companies
Disruptive technologies are undoubtedly big data. Not only do they harbor opportunities, they also pose risks, as the data scandal around Facebook and its partner Cambridge Analytica has shown. But these risks practically do not affect the business, as has been shown on Facebook. This proves the stability of this market, says Hawtin.