Key Takeaways
- Tech stocks have been in and out of favor so far in 2021, but long-term investors may want to instead focus on technologies that can power long-term earnings growth.
- Sales of software and hardware to develop and maintain artificial intelligence (AI) are increasing globally and AI will power many future innovations.
- Fifth-generation (5G) wireless technology may benefit investors in companies that provide the technology behind it as well as those that use it.
- Increasing ransomware attacks have investors' eyes on network security companies who keep digital information safe.
Technology stocks have been on a rollercoaster ride this year. But long-term investors may want to ignore the crowds jumping off and onto the tech stock bandwagon and instead look for stocks with potential for solid earnings growth and higher stock prices into the future. One way to do that is to understand which technologies are likely to have long-term impacts on the world.
The higher speeds of 5G have the potential to transform a variety of industries including health care, media, manufacturing, energy, and even agriculture.
We recently spoke with Fidelity fund managers to learn more about where they see opportunities in long-term tech trends. Here are 3 worth paying attention to now.
Artificial intelligence (AI)
Artificial intelligence is a technology that's both "what's next" and "what's now." AI is already teaching computers to sense, reason, adapt, and act like humans, combining huge databases and serious computing power to enable machines to make predictions and rational decisions. And AI is still in the early stages of development and adoption.
"AI will be a major focus for chief executives and chief technology officers in the coming decade," says Adam Benjamin, Fidelity equity research analyst and portfolio manager. "I'm seeing potential that AI may grow to one of the most significant long-term technology trends."
In the future, Benjamin contends, AI could help companies develop personalized drugs, instantly translate languages, launch better and longer-lasting consumer products, grow more and better food, and help governments avoid natural and economic disasters.
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