The Tech “Disruptors” Remain in The Driver’s Seat

Does artificial intelligence (AI) or, say, cryptocurrency seem mysterious to you? Futurist and sci-fi novelist Arthur C. Clarke once wrote: “Any sufficiently advanced technology is indistinguishable from magic.”

Clarke wrote the novel 2001: A Space Odyssey, on which Stanley Kubrick’s epic 1968 movie is based. So yeah, Clarke’s words have something to teach us.

Below, I’ll explain how the application of ultra-sophisticated technology is the “magic” by which investors can spin profits. One sector I’ll highlight is cryptocurrency, which racked up massive gains last year and is on the cusp of a new bull run.

Despite weakness earlier this week in the technology sector, the stock market has stayed aloft.

Indeed, after pulling back in recent days, stocks came roaring back Thursday and closed sharply higher, with the tech-heavy NASDAQ leading the way:

  • DJIA: +1.18%
  • S&P 500: +2.11%
  • NASDAQ: +2.96%
  • Russell 2000: +0.96%

That said, the benchmark 10-year U.S. Treasury yield (TNX) continued its worrisome climb, rising +0.05% to close at 4.32%, compared to its level at the beginning of February when it was below 4%. Inflation fears have not completely abated. But in a positive development, the CBOE Volatility Index (VIX) dipped about 5.22% to close at 14.5, indicating less stress in the markets.

The bullish factors…

Fourth-quarter 2023 earnings have taken center stage this week, and therein lies bullish news. After the closing bell Wednesday, chipmaker Nvidia (NSDQ: NVDA) reported operating results that beat on the top and bottom lines, underscoring the continued ascendancy of companies involved in disruptive technology.

Nvidia’s results provided fuel for the company’s stock, the tech sector, and the broader market.

Nvidia posted Q4 earnings per share (EPS) of $5.16, for a whopping year-over-year growth rate of more than 769%, blowing past consensus expectations for EPS of $4.55. The Silicon Valley juggernaut also raised its guidance. Small wonder that NVDA jumped 16.40% on Thursday.

Nvidia’s valuation has soared more than 40% to $1.9 trillion since the start of the year.

The following chart illustrates the riches that proactive investors can reap, when they pick the right technology investments:

As the above chart shows, $5,000 Invested in Nvidia in 2000 would be worth $4.7 million today.

Nvidia is at the forefront of the “Magnificent Seven,” a group of mega-cap technology stocks that have been driving the broader market for several months. In addition to AI, Nvidia is heavily involved in developing blockchains, the ultra-fast ledgers that form the backbone of cryptocurrency.

WATCH THIS VIDEO: Will The “Magnificent Seven” Ride High in 2024?

Looking ahead in 2024, I anticipate a broadening of market leadership beyond the tech giants, with sectors that have lagged making up ground, supported by Federal Reserve interest rate cuts.

That said, the tech innovators remain in the driver’s seat of the stock market. In addition to AI, transformative technologies include collaborative workplace software; electric vehicles and “green” transportation; renewable energy (e.g., solar and wind power); fifth-generation (5G) wireless; virtual/augmented reality (VR/AR); space exploration and satellites; robotics; nanotechnology; the Internet of Things (IoT)…it’s a Brave New World and the opportunities for wealth-building are vast.

What’s in YOUR wallet?

One disruptive sector that’s poised for outsized gains in 2024 is cryptocurrency.

Crypto represents a lasting revolution in finance, investing and consumer behavior. Consider this: Bitcoin (BTC), the leading “blue chip” cryptocurrency, gained a whopping 156% in price in 2023. This bullishness has extended throughout the crypto segment and the momentum is likely to continue throughout 2024.

According to research firm Statista, revenue in the cryptocurrencies market reached an estimated US $37.9 billion in 2023. This revenue is expected to show an annual growth rate (CAGR 2023-2027) of 14.40%, resulting in a projected total amount of US $64.9 billion by 2027.

Never in the history of currency has such a disruptive technology emerged with the ability to empower individuals by giving them greater control over their finances.

Crypto challenges traditional institutions like banks and governments and allows people to manage their money independently. Crypto is here to stay.

Every portfolio should have some sort of exposure to crypto. But you need to be informed, to make the right choices. Start receiving our FREE e-letter, Crypto Investing Daily. Click here now!

John Persinos is the editorial director of Investing Daily.

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