Eq: Tech

(New York)

Artificial intelligence is one of the hottest concepts in tech, and one of the most intangible from an investing standpoint. Since “AI” seems to be something that most companies are developing internally, the concept remains difficult to invest in directly for most investors. Those wanting to invest in AI can look beyond Google, Facebook, and the rest of the FAANGs, however. According to one analyst, one should look for specific software companies that have “tremendous expertise in their specific industry, understand their customers’ businesses, and provide highly tailored solutions”. These include Aspen Systems, Guidewire Software, and Veeva Systems.

FINSUM: AI doesn’t have many widely available direct investing opportunities, so these seem like some very interesting picks if you want to bet directly on the technology.

(Los Angeles)

One of the most disruptive technologies in industry might not seem that disruptive—batteries. Yet advances in batteries are about to reshape many areas, not least of which is the power grid. Home energy storage and car battery power are two of the biggest areas of disruption, and investors need to understand the dynamics in play. Better batteries mean less energy costs as power can be stored to smooth out demand-based pricing. It also makes electric vehicles legitimate, and possibly cheaper competitors to gas vehicles. Additionally, improved energy storage makes renewables profitable.

FINSUM: Batteries are going to change the economics of almost everything related to power. Make sure you understand some of the key battles because share prices are going to start reflecting the changes.

(New York)

Increasingly, investing in tech companies means you need to go big or go home. What we mean is that large cap tech companies have been outperforming their smaller peers handily. The S&P 500 Information Technology Sector is up about 14% this year, much better than the index’s 3.7% overall gain, but the S&P 600 Information Technology Sector has only gained 9.9%. That means that the largest tech company are significantly outperforming their smaller peers.

FINSUM: This is not a surprise given the overall momentum the FAANGs have had over the last few years. However, given the worries over regulation, it is odd to see they have outperformed smaller rivals very recently.

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