When balancing an investor portfolio and looking for new opportunities, it’s always a good idea to invest in fast-growing stocks that show a lot of promise. The problem, however, is that going after “fast-growing” often means backing new or unknown companies, which is risky.
The better idea is to take a long-term approach, instead focusing on an entire industry as opposed to particular companies, stocks or startups. Initially, this happens by researching prospective sectors to find a promising one on the rise, with plenty of support behind it.
Then, it’s on to exploring some of the players in the market to find the most promising stocks in regards to value. Here are several fast-growing and incredibly promising industries one should consider investing in over the coming year, with analytics to show for their promise:
In the U.S. alone, legal marijuana held a worth of $10 billion in 2017. Experts project that number will skyrocket by 2026, reaching at least $50 billion. Again, that’s just the United States, as both Canada and Mexico also honor marijuana use legally. Canada, of course, takes that a step further by allowing recreational marijuana.
It is a relatively new industry, both untested, unproven and with a lot of mystery behind its progress and growth. But that doesn’t necessarily mean it’s a bad investment, instead quite the contrary. From growers to dispensaries and distributors there are so many different players in the space making opportunity near endless. It will even be backed by modern agriculture, as marijuana plants need suitable space and nutrients to grow — Scotts Miracle-Gro (NYSE:SMG), for example, offer products to improve crop yield.
Other companies to keep an eye on include New Brunswick-based OrganiGram Holdings (NASDAQOTH:OGRMF), Kush Bottles (NASDAQOTH:KSHB), MadMen Enterprises (NASDAQOTH:MMNFF), and Aurora Cannabis Inc. (OTC: ACBFF).
Cloud computing or software-as-a-service solutions have seen considerable growth in recent years, as more companies come to understand the benefits of working with a third-party service provider as opposed to running everything in-house and on-site.
According to Cisco’s Global Cloud Index, by 2021 cloud data centers will process 94 percent of all compute instances and workloads, while only six percent will process by traditional data centers.
Salesforce (NYSE: CRM) and Zendesk (NYSE: SEN) both see remarkable numbers right now regarding annual growth. Of course, they only represent two of the most prevalent companies in the space, out of hundreds total — if not thousands. It’s a good place for those who want to invest in future-proof technologies.
3. Global Oil and Gas
Believe it or not, now is the perfect time to invest in the oil and gas market due to a “natural decline” or shortage of supply. An upcoming yet dramatic shift in demand, especially within developing countries, will push the value of oil and gas stocks higher than ever before. IEA claims you might even “double current capital investments” as a result.
Some worthy investments include Transocean LTD (NYSE: RIG), National-Oilwell Varco Inc. (NYSE: NOV) and Devon Energy Corp (NYSE:DVN).
4. Advanced Robotics
Thanks to artificial intelligence, machine learning, cheap semiconductor solutions and connected technologies like as IoT and IIoT, we see incredible growth in the robotics sector. According to Loup Ventures Research, the industrial robotics market expects to leap at a rate of 175 percent over the next decade.
Many companies and organizations look to automate operations, not just to boost efficiencies and lower costs but also to push output levels to its limits. Not to mention, several industries have since discovered the power of robotics including manufacturing and development, medical and retail.
Some promising players include Intuitive Surgical (NASDAQ: ISRG) for reliable surgical equipment, and iRobot (NASDAQ: IRBT) for consumer-grade robotic vacuums — think Roomba.
5. Artificial Intelligence and Machine Learning
AI and machine learning technologies need no introduction thanks to the likes of platforms such as Siri, Alexa and IBM’s Watson. AI applications increasingly see use on both the commercial and consumer fronts, for varying ends.
Machine learning especially provides a lot of benefit in regards to big data and data science, aiding in the extraction of useful insights and trends.
Per Adobe, investment into AI startups by venture capitalists has skyrocketed nearly six times what it saw in 2000. Furthermore, spending on AI technologies expects to reach $7.3 billion annually by 2022.
Companies to watch include NVIDIA (NASDAQ: NVDA), Alphabet (NASDAQ: GOOGL and NASDAQ:GOOG), Twilio (TWLO), Amazon (AMZN), and Sense Technologies Inc (SNSGF).
6. Streaming Music
Spotify and Pandora see monumental success in the music streaming and entertainment market with annual revenue growth in the double-digits for both companies.
They make money from a mixture of media ads and subscription services, which proves an incredibly successful strategy. Streaming through apps like Spotify, Pandora and YouTube, now accounts for 75 percent of all the music industry’s revenue.
It’s not a bad idea to invest in the music streaming market, whether one of the aforementioned companies or a relatively new player in the space. SoundCloud, for example, focuses on user-generated and curated content that is completely different from what Spotify offers — you’ll find a lot of independent artists on SoundCloud. There’s definitely room for improvement across the entire market.
Players to watch include Spotify (NYSE: SPOT), Pandora Media (NYSA:P), Apple (NASDAQ:AAPL), Sirius XM Holdings (NASDAQ: SIRI), and Time Warner (TWX).
Final Thoughts: Invest Smarter, Win Bigger
The trick for investing in newer markets is not necessarily to look at the companies and players themselves, but the sector. Most marijuana stocks, for example, are considered high risk because they are relatively new and untested.
But if you take one look at the incredible growth of the marijuana industry, coupled with the support it continues to gain, there’s a lot of potential there, which some might argue shows guaranteed success.
Invest in the right stocks and there’s always an opportunity to win big, but that doesn’t mean one shouldn’t remain smart about either.