It's a Thriving Time for Tech: Crisis, what crisis?
Pandemic, Performance, Prospects and Pitfalls
Up 30% year-to-date, the US Information Technology sector has been both a runaway success and one of the key investment news stories of 2020. However, it isn't just the IT stocks that have done well. The advent of COVID-19 has brought its own implications for the wider technology sector — focusing attention on healthcare and biotechnology too, while secular trends already evident before the pandemic (online shopping, home working etc.) have been vastly accelerated.
Recent mumblings from both the European Union and U.S. Congress about lack of competition hints at increasing regulation for Big Tech, whilst Biden's proposed corporate tax plans could also have an adverse impact. Several papers here attempt to address the prospects for tech sectors post-COVID-19, whilst others look at niche areas such as the adoption of tech in financial services, cloud computing and how innovation is funded.
Social Media: Don't feed the troll (Aviva Investors, Sep 2020)
For compliance reasons, this paper is only accessible in selected countries
Editing content while being mindful of freedom of speech concerns is a unique conundrum for modern-day social media companies. Aviva Investors explores this interesting issue.
Scale as a Service (Baillie Gifford, 2020)
Baillie Gifford examines how scale and cloud technologies are propelling innovative companies forward across multiple sectors. They specifically look at how Shopify, Stripe, and Twilio are utilising scale as a service.
Stress Test: How Biden’s tax plan could impact the FAANGs (Qontigo, Oct 2020)
Biden's likely tax hike could profoundly impact valuations for FAANG stocks. Qontigo stress tests the ramifications of FAANG stocks declining by 20% on other equity sectors.
Podcast: Tech stocks still have room to grow (NN IP, Oct 2020)
As per NN Investment Partners' latest podcast, cloud computing companies still offer attractive long-term growth prospects, though vaccine production could drive investors towards sectors that are more cyclical in nature.
Rationality Within the World of Tech Investing (Janus Henderson, Oct 2020)
For compliance reasons, this paper is only accessible in selected countries
Perhaps bucking the prevailing trend, Janus Henderson states that promising opportunities remain within the technology sector, especially for communication stocks and those linked to IR 4.0 themes.
Latin American Fintech: Thriving in a changing environment (Robeco, Oct 2020)
The authors believe that Latin America stands out as a particularly attractive region for disruptive innovation in the financial technology industry. In fact, new fintech players may be able to leapfrog incumbant financial companies by offering digital payment technologies and allowing non-banked consumers to go straight from cash-only to having digital wallets.
Tesla’s Battery Day: The drive to improve battery technology (LGIM, Oct 2020)
For compliance reasons, this paper is not accessible in the United States
LGIM provides updates on battery technology, Tesla's progress in battery innovation, and partnerships with Chinese battery manufacturers.
Glimpses of 2030: Health care innovation accelerates (Capital Group, Oct 2020)
For compliance reasons, this paper is only accessible in the United Kingdom and Europe
COVID-19 has spawned many different types of innovations within the healthcare industry, including new diagnostic tools, patient monitoring technologies, and drug therapies. Capital Group describes these and other ways in which the healthcare industry is evolving at present.
Small EM Companies Driving Big Innovations (Franklin Templeton, 2020)
For compliance reasons, this paper is only accessible in selected countries
Franklin Templeton focuses in on two specific disruptive innovations: electric bicycles and biometric wearables. These are just two examples of innovations to come out of emerging market small caps in recent months.
Webinar: Does technology rule the post-COVID world? (Candriam, Oct 2020)
Are there still opportunities in technology companies despite current sky-high valuations? This Candriam webinar talks about the effects of regulation, the US elections, stimulus plans, and economic turmoil upon innovation and innovative companies.
Joe Zidle: Navigating growth and technology post-COVID (Blackstone, Sep 2020)
Joe Zidle and Jas Khaira of Blackstone converse about tech giants such as the FAANG stocks, the S-curve, cloud computing capex, and data centres.
Regulation: Big trouble for Big Tech or no? (Wellington Management, Sep 2020)
Wellington Management discusses whether further regulation is in store for Big Tech companies. Both political parties in the United States are 'anti-Big-Tech' but what exactly this means may differ between the two.
The End of Moore’s Law in the Semiconductor Space (Janus Henderson, Sep 2020)
For compliance reasons, this paper is only accessible in selected countries
Intel is facing challenges internally, leading some to proclaim that Moore's Law may be dead for the semiconductor industry. Or, is it the case that Intel's competitors have picked up the innovation baton where they left off?
Cloud Computing is a Massive Market within Technology (WisdomTree, Aug 2020)
For compliance reasons, this paper is only accessible in the United Kingdom and Europe
This article begins by defining the cloud market in terms of the size of SaaS and IaaS. It then goes into ways to gain exposure to cloud computing within investment portfolios.
Artificial Intelligence in Asset Management (CFA Institute Research Foundation, 2020)
This 100-page reference book on AI in the investment industry contains sections on portfolio management, trading, and risk management, with extra sections in the appendix on specific machine learning and AI techniques.
Global Innovation 2020: Financing innovation (Cornell University/INSEAD/WIPO)
This report surveys the state of innovation within 131 economies, with a special thematic section looking at innovation finance in the future and how the pandemic has impacted innovation globally.
ABOUT THE AUTHOR
Andrew Perrins is a former Actuary and Asset Allocator. After qualifying as an Actuary, he worked for 15 years in investment management, serving as Director of Asset Allocation for Abbey Life and for Chase Manhattan, before setting out on a more entrepreneurial path.
To contact him, email [email protected]