FAANG and beyond: Game-changing tech innovations that are capturing investors' attention
We humans do a pretty good job of fooling ourselves into thinking we can predict the future. From sports betting to timing our bitcoin purchases, many financial decisions hinge on the presumption that our chaotic world will logically follow the course we’ve plotted using a handful of data points.
One near certainty, however, is the dominant role technology will play. We already depend on tech for almost everything and as our resources dwindle and species-threatening problems become unignorable, we’ll need to innovate our way out of the corner we’ve painted ourselves into.
Companies are already working on technologies the planet will need if we’re to enjoy a stable, sustainable future. Getting those ideas off the ground and into the mainstream will require mountains of investor capital, which can open the door to an entirely new world of returns.
Wrapping your head around the details may require neural gymnastics, but Len Zapalowski, partner at Vancouver-based boutique business bank Strategic Exits, says the relevant information is fairly accessible.
“A lot of the future-forward, big technologies that people are considering are well documented in certain types of magazines — Wired, for instance,” he says, adding that the Massachusetts Institute of Technology’s semi-regular Tech Tracker is also a good roundup of developing technologies.
And never underestimate the power of a web search. “If you type in ‘top 10 future technologies,’ they all more or less overlap with similar ideas,” Zapalowski says. “So you go from the near-field and the tangible to the over-the-horizon, maybe crazy ideas, like hot dog vending machines on Mars when [SpaceX CEO] Elon Musk gets there.”
Concepts coming into view
Several technologies already in development could become game-changers in the coming years, Zapalowski says.
1. Asteroid mining
It seems like everyone has heard of Psyche 16 and its out-of-this-world monetary potential.
Hefty sums have already been spent to explore financial opportunity and establish the legal framework for mining rare earth metals from flying rocks in space.
The government of Luxembourg, for example, has poured hundreds of millions of euros into creating legal clarity around the mining and trading of space materials, and attracted the attention of pioneering space mining companies, such as Planetary Resources and Deep Space Industries.
The United Kingdom's Asteroid Mining Corp. — which is accepting requests from investors — says mining the asteroid belt could generate “many thousands of times the Earth’s entire GDP” and “expand the Earth’s economy exponentially.”
Imagine taking a train from Maine to New York in an hour. That’s the kind of hyperspeed, low-carbon traveling promised by hyperloop. You hop in a pod and a combination of electric propulsion and magnetic levitation hurls you through a tube at fantastic speeds.
Hyperloop technology is far closer to reality than space mining. Several companies, Elon Musk’s The Boring Company, are set to full-scale tests of their systems this year.
The convenience and positive environmental impact hyperloop could provide “will fundamentally change our lives," Zapalowski says.
Semiconductors already play major roles in a variety of industries: wireless communication, automobiles, cloud storage, consumer electronics and more.
But they’re expected to play an increasingly important part in the future of health care as part of emerging technologies such as "lab on a chip," which will allow clinics and labs around the world to perform diagnostic analysis without the need for trained staff or expensive equipment.
Companies are also exploring "organ on a chip."
“Instead of using lab animals,” Zapalowski says, “you can use a chip to replicate the metabolic behavior of an organ,” which should allow for faster, more efficient and humane development of medical treatments.
How to invest in future-forward tech
The challenge for future tech investing is that many of the companies involved are at the institutional money stage, which leaves retail investors on the outside looking in. But there are several funds you can buy to gain exposure to technologies that are loaded with potential.
There are about 3 million industrial robots in operation worldwide, according to a February release from the International Federation of Robotics. Zapalowski says that’s “the thin edge of the wedge in terms of what robotics can do.”
Robotics companies are already smashing revenue targets, and demand for their products is expected to grow in multiple industries, from manufacturing and logistics to food and beverage.
Zapalowski says two exchange-traded funds to follow are the ROBO Global Robotics & Automation ETF (ROBO) and the Global X Robotics & Artificial Intelligence ETF (BOTZ).
“That’s one space that is particularly ripe for technology that has proven itself in the present but is also innovating rapidly into the future,” he says.
FAANG (Facebook, Amazon, Apple, Netflix, Google)
Funds that track performance of today’s tech goliaths are a bit of a gamble: Can those companies emerge from government scrutiny and create futures for themselves beyond selling phones and subscriptions or raking in ad revenue?
“The bet in the marketplace is that they can,” Zapalowski says.
With Amazon providing computing and storage services for the world, Facebook exploring the next stage in internet evolution in the form of the “metaverse” and Apple reportedly considering a foray into the automobile market, the FAANG companies may just be getting started.
Zapalowski says one fund worth watching is the iShares Russell Top 200 Growth ETF (IOW), but there’s no shortage of FAANG ETFs to put some capital behind.
“Tech is great because it always reinvents itself,” he says. “What was once a ceiling becomes a platform for people to build something new on.”
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— With files from Samantha Emann
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.