The Next Big Investment: Unlocking The Power Of Ai

With the world of investing constantly changing, it can be difficult to predict what the next big thing will be. However, there are a few areas that are expected to be good investments in the coming years.

One of the most popular areas is electric vehicles (EVs). With most developed countries looking to reduce their carbon footprint, switching to electric cars is an easy solution. This represents a roughly $1.6 trillion annual sales opportunity for automakers, and investors don't want to miss out on this expected double-digit growth.

Another area that has the potential to make a big splash is artificial intelligence (AI). AI has the ability to handle tasks that would usually be undertaken by humans and, as it has utility in almost all sectors, its economic impact could be in the trillions.

Other good investments for 2024 include REITs, small-cap stock funds, high-yield savings accounts, and long-term corporate bond funds.

Electric vehicles

The debate around electric vehicles has shifted from demand to supply. Based on Wright’s Law, ARK forecasts that EV prices will decline and sales will increase more than 7-fold, or 50% at an annual rate, from roughly 7.8 million in 2022 to 60 million units in 2027.

A Reuters analysis of 37 global automakers found that they plan to invest nearly $1.2 trillion through 2030 in electric vehicles and batteries. This includes companies such as BMW, BYD, Ford, and GM, all of whom are spending billions on electric vehicle development and production.

Some of the best electric car company stocks are:

• Tesla: The industry leader, Tesla delivered more than 1.3 million vehicles in 2022.
• NIO: A Chinese electric car maker that has been publicly traded since September 2018.
• Rivian: An electric vehicle company that went public in late 2021 and raised almost $12 billion.

Other companies in the electric car space include QuantumScape, Blink Charging, Hyliion, and Luminar.

Artificial intelligence

When it comes to investing in AI, there are a few different approaches to consider. Firstly, investors can look at the companies responsible for the technology itself, which can range from smaller, pure-play companies to large, diversified mega-caps. Secondly, investors can look further down the supply chain and consider companies that make components such as semiconductor stocks. Thirdly, investors can focus on companies that have already started to integrate AI into their business, as these companies may have a competitive advantage moving forward.

Some of the top AI stocks to consider for 2024 include:

• Nvidia (NASDAQ:NVDA): Nvidia has emerged as a leader in AI technology, particularly in the data centre GPU market. Their graphics cards have become the standard in data centres worldwide, and they have also developed hardware and software platforms for self-driving cars.
• Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL): Alphabet has been preparing for the AI revolution for years, acquiring the AI research lab DeepMind in 2014. They are also leaders in autonomous vehicles through their Waymo subsidiary.
• Microsoft (NASDAQ:MSFT): Microsoft has been investing in AI start-up OpenAI and has incorporated AI features across its product portfolio, including Azure, Edge, and Office. They see AI as the next major computing platform and are committed to leading the transition.
• Amazon (NASDAQ:AMZN): Amazon uses AI in almost every aspect of its business, from Alexa and Amazon Go to its Amazon Web Services Sagemaker. They have also introduced Bedrock, a service for building generative AI applications on their cloud computing platform.
• Arm Holdings (NASDAQ:ARM): Arm Holdings designs power-efficient CPU chips that are licensed to companies like Nvidia and cloud infrastructure hyperscalers. Their chips are in high demand for AI applications due to their power-efficient architecture.

While these companies present potential investment opportunities, it is important to note that the AI landscape is still developing, and competition is increasing. Therefore, investors should carefully consider their investment strategies and conduct thorough research before making any decisions.

Biotechnology

From 2019 to 2021, VC funding in therapeutic-based biotech companies globally amounted to over $52 billion, with two-thirds of that going to start-ups with platform technologies. Six platform technologies, in particular, are generating substantial investor excitement:

• Cell Therapy 2.0: This technology can more precisely address diseased tissues or cells or target a broader range of diseases, including solid tumours.
• Next-Generation Gene Therapies: These therapies can edit and modulate DNA and RNA, offering the potential to cure genetic diseases.
• Precision Medicine: This approach can diagnose conditions earlier and tailor therapies to patients' specific genetic profiles.
• Machine Learning-Enabled Drug Discovery: ML can expedite the discovery and development of new drugs by analysing vast data sets.
• Strategies for "Undruggable" Targets: These strategies focus on hard-to-hit proteins and challenging-to-treat diseases that have eluded conventional drug modalities.
• New Delivery Methods: Novel delivery techniques can ensure that novel therapies reach the entire affected tissue safely and accurately.

In addition to these platform technologies, other areas of innovation in biotechnology are attracting significant investment. These include:

• Artificial Intelligence (AI): AI has the potential to revolutionise the biopharma industry by accelerating drug development and improving drug design and optimisation. While the field is still maturing, with most companies at the preclinical stage, interest in AI is rapidly growing.
• Regenerative Medicine: This field focuses on using cell therapies to tackle complex degenerative conditions such as chronic liver and kidney diseases.
• Scalable Allogeneic Therapies: Biotechs are exploring diverse cell types with limited immunogenic profiles to develop off-the-shelf treatments, addressing the challenges of expensive and time-consuming production processes associated with current autologous cell therapies.
• Precision Control and Persistence: Start-ups are working on improving the binding specificity and persistence of cell therapies, powered by significant funding, to address the risks of toxic immune responses and the difficulties in treating solid tumours.
• Gene and Oligonucleotide Therapies: This field has witnessed several approvals over the past decade, including viral vector gene therapies for diseases such as hemophilia B, retinal dystrophy, and spinal muscular atrophy. The success of mRNA vaccines in curbing the COVID-19 pandemic has further accelerated interest in this area.

While public funding for biotech remains uncertain, the commitment of venture capitalists to the sector indicates that biotechnology could be the next big investment opportunity. The advancements and breakthroughs in these key areas of biotechnology highlight its potential to drive the next wave of innovation and create long-lasting impacts on drug development and human health.

Clean energy

The clean energy sector is expected to receive a massive investment of over $150 trillion over the next three decades. This is largely driven by rising demand, falling costs, and government support for renewables. The US Inflation Reduction Act, for example, will drive $369 billion in energy security and climate change investments.

There are many ways to invest in clean energy, from individual stocks to renewable energy ETFs. Here are some of the top renewable energy stocks for 2024:

• NextEra Energy (NEE)
• Brookfield Renewable (BEP)
• Clearway Energy (CWEN)
• First Solar (FSLR)
• SolarEdge Technologies (SEDG)

These companies are well-positioned to benefit from the clean energy transition, with impressive track records of creating shareholder value and strong balance sheets.

However, investing in individual stocks comes with risks. A safer option may be to invest in renewable energy ETFs, which offer immediate diversification. Here are some of the biggest renewable energy ETFs in early 2024:

• Invesco Solar ETF (NYSEMKT: TAN)
• First Trust NASDAQ Clean Edge Energy Index Fund (NASDAQ: QCLN)
• Invesco WilderHill Clean Energy ETF (NYSEMKT: PBW)

Real estate

Rental Housing

Rental housing can be a great investment if you are willing to manage your properties and deal with tenants. With interest rates expected to fall this year, it may be a good time to finance the purchase of a new property. However, an unstable economy may make it challenging to manage rentals. It is important to carefully consider your ability to manage the responsibilities of being a landlord before investing in rental properties.

REITs are considered one of the most attractive ways to invest in real estate. They offer diversified exposure to real estate without the hassle of managing properties. REITs pay out substantial dividends, making them attractive for income-focused investors. After facing challenges due to rising interest rates in previous years, REITs may be poised for a strong performance in 2024.

Housing Market Predictions

The housing market is expected to improve in 2024, despite high mortgage rates and home prices. As mortgage rates slowly decline, more buyers and sellers are predicted to enter the market, leading to a stabilization of housing prices. This could be a good opportunity for those looking to buy or sell properties. However, it is important to note that a significant decline in mortgage rates may need to occur before we see a substantial increase in housing market activity.

Impact of Hybrid Work Schedules

The popularity of hybrid work schedules is expected to impact real estate trends. With more people working remotely, there may be a decline in the demand for office spaces, particularly in urban areas. This could result in a decrease in property tax revenues for cities, affecting the quality of life and potentially leading to a decline in urban populations. On the other hand, suburban areas with robust public transit systems and ride-sharing options may become more attractive to those who no longer need to commute daily.

California Housing Market

The California housing market is expected to experience a rebound in 2024, with a predicted increase in home sales and prices. This positive outlook is largely due to a projected decrease in mortgage rates, slower economic growth, and cooling inflation. However, it is important to note that California has some of the most expensive housing in the country, and affordability remains a significant challenge for many prospective buyers.

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