The year of 2020 led to the year of disruptive stocks. As the COVID-19 pandemic completely changed what many considered “normal society,” it also opened the door for disruptive technology. And that means some potentially great investment opportunities.
What Are Disruptive Stocks?
Disruptive stocks can be great investment opportunities as the world we live in changes.
Disruptive stocks go along with disruptive technology. Disruptive, for our purposes according to Oxford Languages, means radical change to an existing industry or market due to technological innovation.
At the recent Investment U 2021 Conference, Quantitative Expert Nicholas Vardy quoted Clayton Christensen about the disruptive technology theory, saying…
The theory describes the way a new product or service transforms the existing market—and eventually replaces and redefines the status quo—by bringing new simplicity, convenience and affordability.
Chief Investing Strategist Alex Green also spoke about disruptive stocks at the conference. He stated…
Commercial disruption is always positive for consumers. It hurts certain businesses, certain houses, but it’s better for everyone overall.
Who could have predicted the phone, the automobile or the internet? We can’t predict disruption, but we can invest in the disruptive stocks of today. Here’s some of the top disruptive technologies and how you can get in on the action.
Disruptive Stocks and Technologies
One of the biggest sectors with disruptive stocks is biotech. In 2020, this sector grew rapidly as the COVID-19 pandemic took over the world. As a result, we saw a major development: mRNA.
mRNA stands for messenger ribonucleic acid. It provides biological instructions for cells to make proteins. These proteins are created to mimic a virus to train the body on how to get rid of it. And that makes it perfect for vaccines.
Moderna (Nasdaq: MRNA) created the second COVID-19 vaccine. It was approved on December 18, 2020. Moderna is a household name in the industry, and it plans to stay in the game for the long-term. Recently, the company announced it sent its 100 millionth vaccine to the U.S.
CureVac (Nasdaq: CVAC) is a German biotech company. It made headlines in 2020 when it announced the company was using its mRNA technology to create a vaccine. In 2020, the company held a CureVac IPO to help raise funds for its vaccine program as well as other clinical trials.
Another sector known for disruptive stocks is cloud computing. Due to the pandemic and quarantines, companies turned to remote working for employees, a trend that could likely continue in the future.
Cloud computing refers to services delivered on-demand to the customer via the internet. The cloud is an off-site storage center for data. This gets rid of the need for internal infrastructure and hardware.
Salesforce (NYSE: CRM) is a household name in the industry. It was the first cloud-computing company to reach $1 billion in annual revenue in 2009. And after Apple’s (Nasdaq: AAPL) 2020 stock split, the Dow Jones rebalanced by adding Salesforce stock alongside Amgen (Nasdaq: AMGN) and Honeywell International (NYSE: HON).
Microsoft (Nasdaq: MSFT) is one of the most well-known names in technology. Founded in 1975 by Bill Gates, this disruptive stock is also considered a blue-chip stock. It does it all from manufacturing and licensing to selling electronics and services. The company’s cloud computing software, Microsoft Azure, is often named one of the top cloud computing services.
Are you interested in cryptocurrency? Blockchain technology plays a huge part in the crypto game, and that makes it the next technology in our disruptive stocks list. More and more companies are learning how they can use blockchain technology, and the industry is only expected to grow.
IBM (NYSE: IBM) is one of the top blockchain stocks. It’s a leader in the field and offers one of the leading open-source platforms. Companies in industries like healthcare, supply chain and oil and gas already use IBM’s technology. Founded in 1911, IBM is no stranger to adapting to the times.
Square (NYSE: SQ) is another popular disruptive stock. It’s a payment processing company focusing on mobile payments. Familiar with Cash App? These are the guys behind it. In 2018, Square added Bitcoin to its services. It also created Square Crypto, a team dedicated to bitcoin open-source work. Square stock is newer to the market than some of these other names, but it presents a unique investing opportunity.
If you stayed up-to-date on the IPO market in 2020, it’s no surprise electric vehicles (EV) are listed as a disruptive stock. It was the year of EV SPAC IPOs, and the industry is here to stay. Many automakers are turning towards EV manufacturing as the markets show optimism and demand for an eco-friendly option.
Tesla (Nasdaq: TSLA) is one of, if not the most, popular EV stocks on the market. Known for its autonomous driving, futuristic designs and an eccentric founder, Tesla has dominated the market. Although competition is growing, many investors remain bullish on this household name. And investors expect Musk’s other endeavors, such as SpaceX and Starlink, to be as successful.
Nio (NYSE: NIO) is a Chinese EV manufacturer. It’s often named the top Tesla competitor. In November 2020, Nio delivered 5,291 vehicles, up 109% from the year before. Additionally, Nio doesn’t only manufacture EVs. It’s also started making progress in battery technology.