Editor’s Note: The markets and the TradeSmith offices are closed for the Martin Luther King, Jr., holiday, so today we’re sharing a guest editorial from our friend Jeff Brown at The Bleeding Edge that we thought was particularly insightful. We hope you enjoy these predictions for 2021; we’ll be back tomorrow with our own thoughts on the market and the year to come.
Each year, I make predictions about what I see coming in the different areas of technology that I follow. Regular readers are familiar with many of these exciting tech trends: 5G networks, biotechnology, artificial intelligence, and much more.
As investors, we want to have these important topics on our radar. Each of these technologies offers incredible investment opportunities that we don’t want to miss.
And we have a lot to look forward to in the coming year…
1. Self-Driving Cars
The development of artificial intelligence (AI) is one of the most important trends we follow in my research. AI assists in many other different areas of technology. And one key area I’m watching is autonomous vehicles.
We saw incredible progress in this space during 2020. And now, 2021 will be the year that fully autonomous technology is deployed. It won’t be worldwide. It won’t even be nationwide. But we’ll start to see companies like Tesla demonstrate fully functional self-driving cars that can operate in almost any conditions – in bad weather, on city streets, on gravel roads, and so on.
And that leads me to my next prediction…
Waymo is Google’s self-driving technology division. And I predict we will see the first major licensing deal between Waymo and an automotive manufacturer in 2021.
A lot of people believe that Waymo wants to become a carmaker. But that’s nonsense. That’s a resource-intensive business with low margins. Google has no interest in being an automotive manufacturer. Its master plan is really to license its self-driving technology so that it can be used by existing carmakers.
So one day soon, we’ll walk into an auto dealership. We’ll see a new car or truck on display in the showroom. And it will have a sign: “Self-driving technology from Waymo.”
Or perhaps it will be a ride-hailing company like Uber or Lyft. They’ll simply license Waymo’s technology and embed it in their cars. Or perhaps it will be a new entrant that specializes in grocery delivery in autonomous vehicles. You simply plop the groceries in the self-driving car, and it heads off to somebody’s front door.
That’s what’s coming down the line. And I predict the first licensing deal will be sometime in the next 12 months.
I have one more prediction involving a different kind of AI…
One of the biggest breakthroughs of last year involved AI as it applies to computer vision and the ability for a robot to grip an object. This has been a huge bottleneck for manufacturing robots.
Right now, even the best robots are still not as fast or as efficient as a human when it comes to picking or sorting objects. And the reason is that these robots still aren’t great at “understanding” how best to grip different objects.
Is this object slippery? Is it delicate? Do I have to hold this object a particular way? These are things that humans know instinctively. But manufacturing robots still have a tough time.
Right now, it takes about 29 seconds for a robotic arm to “look” at an object and “decide” the best way to get it from Point A to Point B without damaging it.
But a team of researchers out of U.C. Berkeley is solving this problem. The team used a form of AI called deep neural networks to train a robotic arm on the optimal way to move objects around without damaging them.
And get this. After training, it didn’t take the robot 29 seconds to “decide” how best to move an object. It took just 80 milliseconds. That’s an incredible 350x improvement.
This was really the last piece of the puzzle. I predict we will start to see this technology deployed in manufacturing plants, logistics facilities, warehouses, and even laboratories in 2021.
4. 3D Printing
Continuing with the theme of manufacturing, next I want to discuss another important technology: 3D printing (more formally known as additive manufacturing).
Already, 34% of all global installations of additive manufacturing equipment are happening in the U.S. And it’s easy to see why. Additive manufacturing wastes fewer materials, it is much faster, and it’s done at a fraction of the cost.
For example, a company that needed to create molds to produce a propeller for a large air compressor saved $147,000 per mold casting by using 3D printing. And additive manufacturing saved 8 to 11 months on delivery of the mold castings.
And this is having an impact on a lot of different industries.
In fact, it may sound crazy, but I predict the first 3D-printed rocket will go into orbit sometime in the next 12 months.
There’s already a company called Relativity Space. It can 3D-print an entire rocket – including the engine – in 60 days. It can take up to a year to build a rocket using traditional methods.
So yes, I predict a 3D-printed rocket will go into orbit in 2021.
And finally… my last prediction for 2021 may be my most important one…
We are going to see record levels of capital raised from initial public offerings (IPOs) in 2021. Last year, there were 489 IPOs that raised a combined $154 billion.
But I predict that 2021 will surpass even those incredible numbers.
As I’ve written about before, there’s a backlog of IPOs right now. There are so many exciting technology companies that have been staying private for years. All this pressure has been building, and now the cork on the champagne bottle has finally popped.
And this flood of IPOs is great news for investors. Investing early can provide some of the best profits available.
But there’s one big problem…
Lately, these IPOs are listed at a certain price, but when they open for trading, the share price leaps to incredible valuations.
I recently saw this dynamic firsthand when I recommended an exciting artificial intelligence company to readers of my Exponential Tech Investor service when it went public in December.
The stock was priced around $42. But when it started trading, the stock immediately jumped above $100. Investors never had a chance to invest at a reasonable valuation.
And this is happening everywhere. Airbnb, AbCellera, Snowflake… these are all recently public companies. But each time, when the stock began trading, it soared past the original IPO price. Sometimes it starts trading two or three times higher than the original listing price.
At these levels, I can’t recommend any of these companies. The valuations are simply too high.
So what is the solution?
The most obvious answer is to buy shares before the IPO. But pre-IPO shares are typically reserved for large institutional investors. Retail investors have been locked out.
But there is a way to do things a little differently. There is a way to invest in pre-IPO companies from your brokerage account. It’s with something I call a “pre-IPO code.” And it’s open to all investors, accredited or not.
These “pre-IPO code” companies enable investors to essentially get shares in companies before their IPOs.
And no, this is not any type of private deal. The opportunity has been building over recent years, and there are now hundreds of these pre-IPO code companies trading right now.
If anyone wants to find out the full story on this exciting opportunity, there’s good news. I recently hosted my Pre-IPO Code event, where I shared all the details.
And I’m making the replay available for just a short time. If you want to learn more about this unique opportunity, go right here to watch for free.
Regards, Jeff Brown
Editor, The Bleeding Edge