The fourth industrial revolution has finally arrived and the future belongs to a new set of key technologies.
Steve Chiavarone, portfolio manager for Federated Investors, told CNBC that blockchain tech could set off a global revolution in information management, supply chain, administration and virtually every major industry.
Money poured into Bitcoin first, explains Chiavarone, as a result of investors looking for exposure to blockchain—which could bring more efficient supply chains and cut costs.
Along with AI, automation, robotics and the Internet of Things, key tech like blockchain may likely completely transform the global economy.
The future is bright for companies that seize the initiative and pursue these game-changing trends.
Here are five firms that span the tech and finance spheres. Each one deserves special attention from investors. Take a look:
NVIDIA (NASDAQ: NVDA)
One of the best stocks of 2017 has continued its winning streak into the New Year.
NVIDIA, the world’s leading computer hardware manufacturer, announced Q1 earnings that included a 66 percent jump in revenue.
The company has seen its profits and shareholder value surge thanks to rising demand for data centers, accelerated computing components and graphics processing units (GPUS), an NVIDIA staple.
CEO Colette Kress expects data center revenue to skyrocket, from $701 million this quarter to $50 billion by 2023, an increase of 17,000 percent.
To process this enormous increase in data management, NVIDIA is investing in deep learning training—developing forms of artificial intelligence (AI) that allow computers to learn by observing human behavior.
The AI tech could allow NVIDIA data centers to process much more information in a fraction of the time and with considerably less input from human technicians.
The AI work comes on top of NVIDIA’s Titan X GPUs, and while it’s only in the experimental phase, analysts are already predicting NVIDIA will emerge as the premier AI firm once the tech has been fine-tuned.
That means the best stock of 2017 could be a winner for years to come.
Global Blockchain Technologies (CSE: BLOC; OTC: BLKCF)
Breaking Update: Hewlett Packard announces partnership with Global Blockchain Technologies to transform the data storage market. This groundbreaking agreement will allow users to profit from excess digital storage space, expanding on the success of companies such as AirBnb and Uber in utilizing the sharing economy.
Blockchain technology could transform entire industries. Put simply It’s a digital ledger used to store transactions. It has been used primarily with crypto-currencies like Bitcoin and Ethereum. But its potential applications are far wider.
Already, blockchain is being used to transform real estate, finance, healthcare and retail, to name just a few.
Global Blockchain Technologies can be thought of as two companies in one: a crypto-currency hedge fund-type entity that enables shareholders to participate in the cryptocurrency market, and also an incubator for blockchain tech.
BLOC’s management is staffed with experienced pros and veterans of the crypto-currency marketplace. This is no “Millennial Millionaire” start-up looking to make a quick buck mining Bitcoin, but a seasoned, qualified blockchain and crypto firm that can secure the best investment opportunities.
BLOC holds a diversified portfolio of crypto-currencies, from the massive Bitcoin ($142 billion) to smaller cryptos with the potential for large jumps in value.
According to President Shidan Gouran, “When you invest in us, you’re investing in a company run by people who have been in blockchain from the beginning.”
Leading BLOC’s staff of experts is its Chairman, Steven Nerayoff. Nerayoff took part in the creation of Ethereum and helped engineering the currency’s meteoric rise…one that saw the humble crypto increase by 94,000 percent to a market cap of $70 billion.
BLOC leverages its deep bench of experts in finding applications for blockchain technology. Last year it entered into an arrangement which gives it partly ownership of KodakCoin, the world’s first corporate branded crypto currency, teaming up with Overstock.com and tZero to facilitate the KodakCoin initial coin offering (ICO).
Finally, BLOC is hoping to branch out into video games, an industry that already utilizes crypto-currencies for in-game transactions—the currency used in World of Warcraft, for instance, is worth more than the Venezuelan bolivar.
BLOC is helping to create a “game galaxy” where crypto-currencies are used exclusively, and all transactions are processed on the blockchain.
Finally, the company’s premier blockchain asset is its new Laser platform, a tool that connects different blockchain networks into a single union—“blockchain without borders.”
BLOC can do all this with a tiny market cap, accessing potentially billion-dollar opportunities for its shareholders without exposing them to the risks inherent with individual investments in the Bitcoin world.
This small company could potentially grow rapidly in the short term.
Paypal (NASDAQ:PYPL)
One of Silicon Valley’s trailblazers, PayPal hasn’t lost any momentum in 2018.
The company added 8.1 million new active users in Q1, a jump of 35 percent from last year. Revenue growth is strong and net income reached $511 million, an increase of 29 percent.
But PayPal, which emerged as alternative to traditional financial firms, has since branched out—and it’s relying on its bill-splitting app Venmo to carry it into the next age of digital, peer-to-peer transactions.
Two million merchants around the U.S. now use Venmo, while the app’s total transaction base was $12.3 billion.
PayPal has been adding to its assets through acquisitions, taking over Swedish fintech firm iZettle for $2.2 billion before that company had a chance to carry out its IPO.
Smart money is on PayPal following up this big buy with even more acquisitions, which would evidence an aggressive 2018 strategy.
Given how strong this stock has performed already, it’s clear the rest of 2018 looks bright for PayPal, particularly if its fintech investments pay off.
Bank of America (NYSE: BAC)
One of the biggest banks in the world is embracing “fintech”—financial technologies that could radically change how people, money and data interact.
A few years ago, fintech firms started popping up all over the place. They seemed leaner and meaner than the established banks—but now venerable firms like BAC have gone back on the offensive, buying out their fintech competition and developing their own innovative tech to stay in business.
BAC has acquired a taste for blockchain patents, and currently holds more than any other financial firm.
One of those patents is for a blockchain-based system for managing network security—one that would be fully automated.
BAC boasted at Davos this year that it’s spent more money on blockchain tech than any other bank, though some analysts believe it’s falling behind in the fintech race.
COO Cathy Bessant told CNBC that AI will be the key to fintech’s future—and feels BAC is at the forefront of bringing AI to average consumers.
On the basis of these innovations, BAC has been a strong performer, rising by 150 percent in the last five years.
It’s long been an earner for shareholders, and with its investments in blockchain, BAC will likely continue to bring value to its shareholders. Its price might seem a little high, but for investors looking to profit from the fintech revolution, you could do a lot worse.
IBM (NYSE: IBM)
Another venerable tech firm with a long pedigree has bought into tomorrow’s technologies.
International Business Machines (IBM) has been an aggressive advocate of applying the newest tech to solving a wide range of problems. When it’s not taking on new acquisitions, IBM is investing heavily in blockchain.
This year could be the year that IBM, along with other major firms, brings blockchain to mainstream business.
IBM has praised the blockchain for its security and transparency, and about sixteen months ago it launched a blockchain business. Right now, about 1,500 employees of the firm are working on blockchain projects.
One project has food and retail giant Walmart using IBM’s blockchain tech to track the food supply chain. IBM has launched an initiative extending blockchain solutions to small-time food distributors in Kenya.
IBM is also working with Maersk, the shipping giant, on using blockchain for logistics.
With the resources to tackle major problems, IBM could emerge as the torchbearer that brings blockchain into the mainstream—allowing its shareholders to reap the benefits.
So, while the stock might be a bit overpriced and has suffered through some doldrums since early 2018, we believe IBM will improve as its tech imprint grows.
Other companies to watch as the tech industry continues to reshape the world:
The Descartes Systems Group Inc. (TSX: DSG) (commonly referred to as Descartes) is a Canadian multinational technology company specializing in logistics software, supply chain management software, and cloud-based services for logistics businesses. The company is making waves in the tech industry with its futuristic products and visionary leadership.
As a key stock in Canada’s tech boom, Descartes Systems is a smart choice for investors.
Kinaxis Inc (TSX:KXS) is a provider of cloud-based subscription software for supply chain operations. The Company offers RapidResponse as a collection of cloud-based configurable applications. The Company's RapidResponse product provides supply chain planning and analytics capabilities that create the foundation for managing multiple, interconnected supply chain management processes, including demand planning, supply planning, inventory management, order fulfillment and capacity planning.
Kinaxis is a growing company, but the company has already carved out a significant piece of the pie. As a leader in its field, Kinaxis is a force which investors are keeping an eye on.
Computer Modelling Group (TSX:CMG) is a software technology company producing reservoir simulation software for oil and gas companies. Computer Modeling Group LTD. Is a tempting trade for investors as it brings together two essential industries - tech and resources- which are going anywhere any time soon. Especially as the need for security grows, a tech company involved in the oil and gas industry has an incredible opportunity to offer other services.
While Computer Modelling Group focuses on the resource industry, its technology is definitely breaking ground. Founded nearly 40 years ago by Khalid Aziz, a renowned simulation developer, the company has proven that it has staying power. As the resource industry meets technology, this will be a stock to pay attention to.
Power Financial Corp (TSX:PWF): Montreal-based Power Financial Corp has been in the finance industry since 1984. The company operates in three segments: Lifeco, IGM and Pargesa Holding SA (Pargesa). And, with its holdings in a diversified portfolio spanning the United States and Europe, Power Financial is a leader in its field.
Focusing its investments in the emerging FinTech industry, Power Financial stands to benefit by riding this wave into the future. The company’s forward-thinking attitude and liberal approach to technology is sure to leave investors satisfied.
We like PWF because it owns 60 percent of Wealthsimple, a leading robo-advisor for investing in ETF portfolios.
Pure Technologies LTD (TSX:PUR): Pure technologies is all about critical infrastructure including water and wastewater pipelines, oil and gas pipelines, and bridges and structures. One of Pure Tech’s biggest achievements in this space is its SoundPrint acoustic monitoring technology, which is set to revolutionize the industry.
With its innovative approach to a number of different technologies, Pure is a great play for investors looking for exposure to a wide variety of industries.
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