Tech stock investing has taken a bit of a battering of late. The high-stakes momentum of 2020 has seen some names getting run by bulls to staggering new heights. But a number of selloffs in this space has highlighted the ratcheting risks of overvaluation. However, from stocks with “comeback charisma” to trends that could outlast the pandemic, some big, bold growth theses are bigger and bolder than others.
A choppy tech stock space
It’s been a mixed couple of weeks for the electric vehicles space. Die-hard Tesla fans are unlikely to be deterred, though. After all, Tesla is more than a car — it’s also a network, a software, a lifestyle, and a philosophy. It’s arguable that Tesla satisfies some of the criteria of a tech stock. And it certainly exhibits some of the volatility, as well as the sudden momentum, of that asset class.
The digitalization of logistics is another popular area of tech stock investing. It could also be a contender for post-pandemic growth potential. For this, consider such names as Descartes Systems Group. Descartes is a lower-volatility play in the global shipping space custom built for investors going long on quality.
When it comes to media dominance, Rogers Communications is another key stock to watch in this space. Due to report earnings imminently, Rogers may be best known as a wireless and comms play. But it’s of interest here as the biggest sports media name in the country.
A return of roaming fee revenue could also boost this name in 2021. In the meantime, while Rogers isn’t what most observers might consider a tech stock, it’s beginning to resemble some names in that space. Given the media hegemony commanded by Rogers, there’s something of a Netflix-adjacent play to this stock. There’s also the 5G angle — a growth thesis right on the verge of coming to fruition.
Looking for long-term upside?
But if it’s 5G and satellite communications exposure you’re after, you could do worse than NASA-partnered Maxar Technologies. Best known for Earth imaging and robotics applications, the Maxar name is also pertinent to data analytics and artificial intelligence growth theses. With missions to the Moon and Mars in the cards, Maxar is well positioned for space industry investing.
Indeed, backing AI itself is a high-stakes investing strategy. There are a few stocks in the AI space that have become household names. Some are generic and suit a range of tech plays. For instance, Microsoft is a catchall for everything from hardware to edge network upside. Others, though, such as the semiconductor play Nvidia, are more focused, and could have big upside.
Investors can pick and mix from tech stocks, optimizing a focused portfolio segment for either long-term wealth generation or near-term capital gains. However, one way to reduce risk is to diversify across the many growth areas that tech investing has to offer. From the high-concept Maxar to the EV revolution, there are plenty of tech trends with years of growth potential just waiting to be tapped.
