Tech products can consume a lot of our time, although most are surprised at how dominate these companies are on the world share markets. AtlasTrend Co-founder, Kevin Hua looks at how to potentially profit from these companies and what separates today’s leaders from the famous “tech wreck” of early 2000.
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With the rapidly growing size of the U.S. tech companies, investors are reminded of the tech wreck of early 2000, the “new economy” and how that famously crashed and burned. We’ve seen a lot of tech companies report in the U.S., some large share price movements and the U.S. economy being driven by even more tech leaders. Kevin Hua walks us through the results and whether another tech crash is looming.
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Are we concerned of another tech wreck again?
- No, we don’t believe so. Many tech companies that crashed in the 2000s were pre revenue and profitability
- Fast forward 2017, tech sector matured significantly, with tech leaders like Apple, Amazon, Facebook and Google revolutionizing the way we live, created sustainable and profitable businesses
What characteristics should investors look for in a tech leader?
- At AtlasTrend, we start by selecting long term structural trends like big data or online shopping
- Within the themes, we select long term winners and take the most advantage of these trends
- 4 key characteristics of long term winners:
- Highly scaleable (e.g. Google search)
- Ability to create network effect through userbase (e.g. Facebook’s 2.1 million users)
- Ability to leverage core business to build adjacent complementary businesses (e.g. Amazon’s AWS business)
- Strong balance sheet to fuel innovation & build new businesses (e.g. Apple’s US$153 billion net cash)
Key takeaway from U.S. tech companies this reporting season
- Whilst growth in technology is structural, not all are businesses are winning
- The big are only getting stronger
- Apple, Amazon, Facebook, Google and Alibaba are our picks for long term winners in technology
Listen to more interviews in this series:
AtlasTrend manages global share funds investing in companies driving or benefiting from global themes such as big data and online shopping. For more insights on big data and online shopping as an investment trend and access to invest, sign up for a free 7-day trial.