Capitalizations are all the more impressive as these companies are relatively young (Facebook was founded in 2004). These evaluations far exceed those of much older large companies (energy sector, automobile, banks, etc.) The 21st century is that of new technologies.
Tech companies are on the rise. Behind the behemoths mentioned above, many start-ups are taking advantage of the internet and the development of ever more efficient hardware and software solutions (computers, servers, smartphones, micro-conductors, artificial intelligence, etc.) to offer new services. And these new services are completely revolutionizing certain sectors of activity: mobility, housing, entertainment, communications, etc. Tech companies are quick to shake up established industries. We think, for example, of the automotive industry, where Tesla, the company managed by the charismatic Elon Musk, has managed to take significant market share in the niche of electric cars. Traditional builders are now running behind this newcomer.
Many technology companies have taken over a new source of wealth: information (“data” in English). Whether it is to predict consumer purchasing intentions or to develop therapeutic treatments based on health data, “data” is worth gold and new technology companies are at the forefront of taking advantage of it. Data is collected at any time, as soon as Internet users browse the Internet or use applications. These massive amounts of data feed into prediction models pioneered by artificial intelligence, which some describe as the next great economic revolution.
Bet on new technologies by investing in the most promising companies
Given the excellent performance of technology stocks (still + 34.6% for the Nasdaq in 2019!), It is very tempting to make room for technology stocks in its equity portfolio.
Let’s face it, most of the technology stocks are located in the United States of America. It will therefore be necessary to open an ordinary securities account (CTO) to be able to house American equities. In practice, the fees and services associated with the CTO of Bourse Direct garner very positive reviews, being perfectly suitable for buying US stocks.
Positioning on funds that replicate the performance of technology stocks
Choosing which will be the most promising companies of tomorrow is not an easy task, even for investment professionals and specialists in new technologies. For this reason, it can be smart to invest in the new technology sector through investment funds. Among the interesting funds, we can cite index funds (trackers or ETFs) , the objective of which is to replicate the performance of a benchmark index (such as the Nasdaq). This type of fund, by virtue of its mode of operation, makes it possible to limit management fees and thus obtain excellent performance net of fees. There are index funds focused on stocks of technology companies.