For more than thirty years, investors often have a innovation that changes games to enlarge their attention and wallets, or the next big thing technology. Perhaps the best example, the emergence and proliferation of the internet in the mid -990s, sending the comparison S&P 500(Snpindex: ^Gspc)iconic Dow Jones Industrial Average(Djindices: ^dji)and growth -oriented Nasdaq composite(Nasdaqindex: ^ICCY) rising.
The Internet paved the way for businesses to go beyond the traditional showcase. He also revolutionized investments and broke the information obstacles that existed between Wall Street and Main Street. Instant access to income statements, balance sheets, management comments and corporate presentations has made more willing to accept valuation premiums for internet -oriented enterprises promising the growth rates that leave the jaw.
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However, the internet revolution was not without speed blows. As the date is constantly shown, Every new technology or trend needed time to mature. More simply, it takes time for businesses to understand how new technologies will be optimized. This leaves the stock market and companies on the front of these tendencies, such as the explosion of the point-com balloon in the early 2000s.
Genome Code -solving, nanotechnology, 3D printing, blockchain technology and final bubble explosion events representing examples of Metaverse, the next big thing was followed by technologies and trends.
Typically, the innovations and tendencies that change games are singular events with a hyper innovation or trend at a time. However, we can also witness history with three potential bubbles.
Probably, because it excites the Internet Wall Street, no technological innovation and the fact that investors love the evolution Artificial Intelligence (AI). Based on estimates from PWC analysts Your award sizeA combination of productivity improvements from AI and the effects on the consumption side can add $ 15.7 trillion to the global gross domestic product by 2030.
Like Powerhousees Nvidia(Nasdaq: nvda) And Palantir Technologies(NASDAQ: PLTR) It has set out in terms of a hardware and application. NVIDIA’s graphic processing units (GPU) are brains that strengthen deciding in high computer data centers. Meanwhile, Palantir’s AI- and Machine learning guided Gotham platform helps federal governments to plan and conduct military duties, as well as to collect and analyze data. Both companies have sustainable trenches and growth rates that reduce jaws with the permission of AI.
Another thing that these AI leaders have is historically laborious values. History tells us that the next major technologies typically reached the summit in the sales (P/s) rates of the priority of public companies.
More importantly, most businesses that have invested aggressively in AI data center infrastructure and AI -supported applications have not yet optimized their hardware or software.
With the emergence of the Internet, it took years when they understood how to use this technology to increase the sales and margins of businesses. This has not yet been with artificial intelligence, which leaves this tendency completely open for a final bubble explosion event.
Image Source: Getty Images.
While artificial intelligence has attracted the attention of investors for almost three years, the rise of quantum information process has been a scorching tendency for about a year.
Quantum calculation is based on the principles of quantum mechanics to solve complex equations and problems that traditional computer systems cannot address. Special quantum computers can help for drug research and development, climate modeling, supply chain optimization and can highly accelerate AI algorithms and potentially accelerate machine education. This sampling of examples of usage is what Boston Consulting Group believes that this technology can add economic value up to $ 850 billion by 2040.
Although some of the members of the “magnificent seven” are developing hardware or platforms that appeal to quantum calculation, pure game quantum information process stocks have increased rapidly. After the year (from the closing bell on 27 August), IONQ(NYSE: IONQ) And Rigetti Calculation(Nasdaq: rgti) He saw that his shares earned 452% and 1.530%, respectively.
Unfortunately, neither Ionq nor Rigetti did not show that operating models were sustainable or scaled. IONQ is expected to report $ 91 million in full -year sales in 2025, but it is worth 12 billion dollars. As for Rigetti, full -year income is expected to fall to only $ 8 million this year, compared to the market value of about $ 5 billion.
In addition, IONQ and Rigetti are not particularly close to making profit, even with rapid sales growth projections in 2026. Similar to Metaverse, this technology seems to be the main current and a long way to be really relevant.
Third potential bubble brewing in addition to steep (and probably unsustainable) climbing in artificial intelligence and quantum calculation Bitcoin(Crypto: BTC) Treasury strategy. This involves using cash to buy Bitcoin to buy Bitcoin’s balance sheets or lending.
The primary charm of Bitcoin Treasury strategy is to fight against inflation. The US continues to expand the money supply, which devalues the dollar over time. In contrast, Bitcoin’s lifetime coin supply is limited to 21 million coins after completely removed. This perceived famine fuel the bull case and Michael Saylor Strategy(Nasdaq: mstr) 632,457 Bitcoin or a circulation of more than 3% of the total coin.
Duzines public company, Bitcoin’s value will continue to appreciate the Bitcoin treasure to form the footprint of the strategy. Although these purchases help to inflate the price of Bitcoin temporarily and artificially, it is not sustainable.
Aside from the strategy, most of the companies adopting Bitcoin treasures are struggling with businesses that lose money and fall on the innovation front. Buying Bitcoin (or any crypto currency) is not a panacea for these struggles. In addition, if most businesses occur if a shock occurs, Bitcoin, which leaves these companies open to the possibility of evacuating their digital assets, is watching shares or some kind of debt to buy.
To add, most Bitcoin treasury companies (including strategy) are traded with important premiums to the net asset value of Bitcoins. Investors pay premiums that can exceed 500% of the actual value of digital assets held by unproven/structurally bankrupt businesses, instead of using Bitcoin directly or to gain Bitcoin exposure.
Based on a decrease of at least 50% since its establishment, Bitcoin seems to be a matter of time to implement the Bitcoin Treasury strategy.
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Sean Williams None of the mentioned stocks have a position. Motley Fool has positions and recommends to Bitcoin, Nvidia and Palantir Technologies. Motley Fool’s Explanation policy.
