(Bloomberg) – Bank of America Corp. strategists just released a new list of what they call technology “moonshots” to help guide investors in their search for the next Amazon.com Inc. or Apple Inc.
From the sixth generation telecommunications network that could download the entire New York Public Library collection in 20 seconds to wireless electricity, the things that could drastically change people’s lives are not far off as we could. think so, according to the strategists led by Haim. Israel, Head of Global Thematic Investments Research at BofA.
“Failure to identify future technology today could mean missing the next big revolution,” Israel wrote in a client note. “The rate at which themes are transforming businesses is rapid, but the adoption of many technologies – like smartphones or renewables – has exceeded experts’ predictions by decades, as we often think linearly, but progress is exponential. “
Getting into the next big thing earlier has been crucial to the success of investing in stocks. Over the past three decades, only 1.5% of companies accounted for all of the wealth created in the global stock market, BofA said, citing a study by Hendrik Bessembinder, a professor at Arizona State University.
Meanwhile, incumbents are being moved at a faster pace due to the acceleration of innovations. Take, for example, the lifespan of companies in the S&P 500. In 1958, the average company lasted 61 years. That rose to 24 years by 2016 and is expected to be halved to just 12 years by 2027, according to BofA data.
The company’s predictions come amid a growing appetite for thematic investments that focus on understandable and relatable narratives. Led by Cathie Wood’s Ark Investment Management products, niche-based exchange-traded funds have attracted $ 42 billion in new money this year, surpassing total inflows for all of 2020, data shows. compiled by Bloomberg Intelligence show.
Read: Thematic ETF Craze Gains New Fund Tracking Streaming Services
Investing in early innovators often requires a strong stomach for losses, both in terms of bottom line and market performance. For example, a basket of unprofitable Goldman Sachs Group Inc. tech companies in innovative industries fell nearly 40% earlier this year and have yet to recoup half of the losses. And certainly, not everyone will be able to succeed.
For Israel of BofA, the payoff of investing in the stars of tomorrow is not negligible. According to his team’s estimate, the 14 technologies put forward for the future currently represent only $ 330 billion in market size. Together, they could grow 36% per year to reach $ 6.4 trillion by the 2030s. For context, the profits of S&P 500 companies have grown 6% per year historically.
“These moonbeats could transform and disrupt multiple industries, contributing to the next great cycle of tech-driven growth,” the strategists wrote.
Below is a list of potential future technologies:
6G Telecommunications Networks Emotional Artificial Intelligence Brain Computer Interfaces Bionic Humans Immortality Synthetic Biology Wireless Electricity Holograms Metaverse Flying Car Vertical Takeoff and LandingOceantech Next Generation Batteries Green Mines Carbon Capture and Storage
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