Before citizens knew the results of the 2020 presidential election in the United States, investors already knew the winner. The winner was technology stocks which were already high this year. Shares of huge technology companies such as Amazon, Apple, Microsoft, and Facebook went up the hours after the closing of polls on November 3. The Nasdaq index was close to its highest ever by the end of the week.
Before the polls, investors foresaw the Democrats taking both the senate and presidency. This would trigger large and rapid fiscal stimulus and lift sensitive unloved US stocks such as carmakers and banks. Instead, with some seats in the Senate up for grabs, though out of reach, technology is in demand.
Corporate America is struggling due to the coronavirus and plenty of workers are having a difficult time finding jobs. Money managers claim that huge technology firms will provide a safe haven. BlackRock’s chief investment strategist, Mike Pyle, says growth in the world is relatively scarce and people are willing to pay a lot for it.
Franklin Templeton Investments head of equities, Stephen Dover, claimed that there was plenty of money on the sidelines waiting for clarification on the election.
Technology firms are the top performers this year in the United States stock market, increasing profits during one of the world’s worst downturns since the 1920s Great Depression. While many entertainment, hospitality, and travel businesses are desperately hanging on, demand for technology products from companies like Microsoft and Apple has increased during the pandemic. This happens due to workers buying new gadgets for home businesses and offices and increasingly rely on software and such services. At the moment, there is a big disparity between businesses, where you have got the likes of Microsoft and Amazon on one end, and airlines, cruise, and leisure on the other.
Investors are helped by low-interest rates to justify the high valuations of growing tech companies. Here are analyst stock ratings today. Last week, Google’s earnings-to-price ratio was almost at its highest in ten years. This was due to its stock trading at twenty-seven times its projected profits for the next year. Multiples have expanded since the election for chipmaker Qualcomm, Adobe, Salesforce, Microsoft, and Facebook. Mellon’s head of equity and chief investment officer said that any asset that lasts and with low inflation is now more valuable.
Here are some technologies that will be important in 2021:
- Artificial Intelligence (AI)
At the moment, AI is a big technology trend. In the coming year, it will be valuable in helping us understand and interpret the world surrounding us. The amount of data collected on infection rates, healthcare, and the triumph of prevention methods will keep on increasing. This will lead to machine learning becoming increasingly sophisticated and better informed in finding solutions. From computers monitoring the public area’s capacity to analyzing interactions through contact tracing, self-learning algorithms notice insights and connections that human analysis would not notice. They will assist in predicting service demand from healthcare providers such as hospitals, and allow better decision making concerning where and when to deploy resources.
- Drones and Robotics
The push for self-driving vehicles keeps on increasing as the number of public transport passengers fluctuates weekly depending on conditions. Civic authorities and service providers’ priorities will be ensuring driving efficiency across all public transport networks. Uncertainty around user demand will be balanced by reducing the costs of human labor.
We have seen an emergence of robots in recent years, in the assisted living and care sectors. This will continue becoming important especially in the case of interaction with people vulnerable to infection, like the elderly. The robots are to be used as a channel of communication rather than replacing human interaction completely.
The purpose of drones will be to deliver vital medicine as well as be equipped with algorithms used to monitor public areas so as to identify areas with a high risk of transmission.
- Enhanced Connectivity and 5G
Reliable and faster internet means loading pages faster and less video buffering. From 3G onwards, each upgrade in mobile connectivity has led to new uses of the internet. 3G made data-driven services and web browsing useful on mobiles, 4G led to an advance in streaming music and video platforms due to increased bandwidths, and 5G will open other doors as well. 5G would lead to services depending on advanced technology like virtual reality, augmented reality, and cloud-based gaming such as NVidia’s GeForce Now or Google’s Stadia becoming accessible anytime and anywhere.