Automobile Innovation

Electric vehicle (EV) sales are expected to grow significantly in the coming years. According to a KPMG survey conducted on auto industry executives, EV sales could amount to 52% of total sales by 2030 in the U.S., China, and Japan.

Of the survey respondents, 77% said that mass adoption within 10 years was possible, even without government aid.¹

With more EVs on the road, there’s an increasing need for infrastructure changes (including the addition of charging stations) on a global scale.

According to the Department of Energy, there are 46,000 EV public charging sites currently in the U.S.

With the Biden Administration aiming for EV to make up 50% of total auto sales by 2030, industry insiders say a million more fast chargers will be required. EV sales currently account for just two percent of the market.²

With demand for charging infrastructure growing, the U.S. government is expected to lay out the EV Charging Action Plan. The goal is for the Department of Energy and Department of Transportation to work together to make those EV sale targets a reality.

Cybersecurity

According to PricewaterhouseCoopers’ 2022 Global Digital Trust Insights Survey, 69% of responding organizations said their cybersecurity spending was expected to increase in 2022. A further 26% of the respondents forecast their cybersecurity spending to increase by 10% or more.³

Technology research and advisory firm Gartner forecasts that spending on inflation security and risk management could see a big jump in 2022. It’s expected to be $172.0 billion in 2022, up from $155.0 billion in 2021 and $137.0 billion in 2020.

Cloud Computing

According to analysis by Grand View Research, the global cloud computing market was valued at US $274.7 billion in 2020. In coming years, its expected to see a robust growth. Between 2021 and 2028, the global cloud computing market is expected to grow at a compound annual growth rate (CAGR) of 19.1%, to over $1.25 trillion. Key factors contributing to growth in the global cloud computing market include artificial Intelligence (AI) and machine learning, as well as remote working and workplace transformation.

The software as a service (SaaS) market is also expected to grow rapidly. In 2020, 54% of the global cloud computing revenue was SaaS-related. As per an IT industry survey, 60% of global firms are planning to use SaaS providers’ cloud-managed services in 2022. This figure is twice as much compared to 2018.⁴

Furthermore, acquisitions and mergers among the SaaS-based companies are forecasted to increase. In 2018, 169 SaaS-based acquisitions occurred with a mean acquisition price of $1.3 billion.

E-Gaming

E-Gaming is becoming popular, forcing investors, brands, and media outlets to pay attention.

According to estimates by Insider Intelligence, in 2022, there will be 29.6 million monthly esports viewers in the United States. This would be an increase of 11.5% from 2021.

More eyeballs mean significantly more business. Newzoo forecasts that esports ecosystem revenue could hit $1.8 billion by 2022. Media rights, live event ticket sales, merchandise sales, in-game purchases, sponsorship, and advertising will all play roles in this revenue growth.⁵

5G

Verizon Communications Inc., provides communications, technology, information, and entertainment products and services to consumers, businesses, and governments around the world. This company is at the forefront of the 5G wave in the U.S.

Verizon recently announced that it has exceeded its 2021 expansion targets. The company has installed 14,000 new 5G Ultra Wideband cell sites. Through these newly installed sites it is able to provide phone service to parts of 87 U.S. cities, 5G Home to parts of 65 cities, and 5G Internet to parts of 62 cities. These cities include Atlanta, Chicago, Los Angeles, Athens, Knoxville, and Tacoma.

Verizon’s 5G Ultra Wideband data usage has increased a whopping 750% year over year.

The speed of its 5G network has been a big priority for Verizon Communications. In recent field tests, it noted speeds of 1.5 gigabits per second (Gbps) and 3.0 Gbps, respectively. In a lab study, Verizon Communications and Qualcomm Technologies, Inc. were able to attain a download speed of 7.92 Gbps using carrier aggregation, ultimately suggesting higher speeds of internet could be possible in the near future.⁶

Robotics & Automation

The automation of processes/tasks, and the use of robots are both growing trends. One recent example of this is DHL, a parcel delivery company.

In the 2021 holiday season, the company increased its use of robots. DHL now has 1,500 picking robots at its warehouses around the U.S.⁷

Marvell Technology Inc is an infrastructure semiconductor solutions provider. The company’s net revenue jumped 61% year over year to $1.2 billion for the third quarter of fiscal 2022.⁸

Its non-generally accepted accounting principles (GAAP) net income for the third quarter of fiscal 2022 was $364.0 million, or $0.43 per diluted share. This beat the $0.38 analysts had projected.⁹

According to the company’s own projections for the fourth quarter of fiscal 2022, revenue is expected to be 1.32 billion +/- 3%, and non-GAAP diluted earnings per share are expected to be between $0.45 and $0.51.

FinTech

Merger and acquisition (M&A) activity is robust in the Fintech industry these days. Firms are trying to capture new markets, increase product offerings, and continually innovate.

Mastercard Inc is a financial technology company focused on providing transaction processing and other payment-related products and services in the U.S. and internationally. It offers services under the MasterCard, Maestro, and Cirrus brands.

The company acquired Dynamic Yield from McDonald’s Corporation for an undisclosed amount. Sources familiar with the deal pegged the price tag at $300.0 million.

Dynamic Yield specializes in personalization and decision logic technology. Its tech has been in use at McDonald’s drive-throughs and ordering kiosks in various markets globally. By acquiring Dynamic Yield, Mastercard could expand its product offering.¹⁰

Genomics

Corteva, Inc. is a global agriculture company focused on providing seed crop protection and digital solutions to maximize productivity and enhance yields. Corteva reported that sales grew 27% in the third quarter of 2021 to $2.4 billion. Net income for the quarter amounted to $36.0 million—an increase of 109% year-over-year (EPS $0.05).

For the entire year of 2021, Corteva increased its previously provided guidance. It now expects full-year sales to be between $15.5 billion and $15.7 billion, which represents an annual growth of 10% for 2021. Operating EPS is expected to be between $2.05 and $2.15, which would mean profit growth of 40%.¹¹

Investing in Disruptive Innovation with EDGE ETF

Disruptive innovation gives your portfolio an edge by ensuring you keep up with trends and developments in a quickly changing world, giving you exposure to high-growth industries.

The award-winning Evolve Innovation Index Fund provides access to global companies involved in disruptive innovation across a broad range of industries, including cybersecurity, cloud computing, eGaming and eSports, automobile innovation, 5G, FinTech, genomics, and robotics and automation.

For more blogs like this, insight on investing, and investment products, sign up for our weekly newsletter here.

 

Sources:

1. White, J., “EVs will own half of U.S. market by 2030, auto execs tell survey,” Driving, December 1, 2021; https://driving.ca/auto-news/industry/evs-will-own-half-of-u-s-china-markets-by-2030-auto-execs-tell-survey.
2. Korn, M., “Biden administration accelerates plans for a national EV charging network,” ABC News, December 13, 2021; https://abcnews.go.com/Business/biden-administration-accelerates-plans-national-ev-charging-network/story?id=81719883.
3. Pratt, M.K., “Cybersecurity spending trends for 2022: Investing in the future,” CSO, December 20, 2021; https://www.csoonline.com/article/3645091/cybersecurity-spending-trends-for-2022-investing-in-the-future.html.
4. “Cloud Computing Market Size, Share & Trends Analysis Report By Service (SaaS, IaaS), By Enterprise Size (Large Enterprises, SMEs), By End Use (BFSI, Manufacturing), By Deployment, And Segment Forecasts, 2021 – 2028,” Grand View Research, July 2021; https://www.grandviewresearch.com/industry-analysis/cloud-computing-industry.
5. “Esports Ecosystem in 2022: Key industry companies, viewership growth trends, and market revenue stats,” Insider Intelligence, January 3, 2021; https://www.insiderintelligence.com/insights/esports-ecosystem-market-report/.
6. Lawson, A., and Schulz, K, “Verizon exceeds 5G build plan for 2021; focuses resources on rapid C-Band expansion, “Verizon Communications Inc., December 9, 2021; https://www.verizon.com/about/news/verizon-5g-ultra-wideband-rapid-c-band-expansion.
7. Sasso, M., “DHL doubles robots as humans alone can’t handle holiday crunch,” BNN Bloomberg, December 10, 2021; https://www.bnnbloomberg.ca/dhl-doubles-robots-as-humans-alone-can-t-handle-holiday-crunch-1.1694244.
8. “Marvel Investor Relations,” Marvell Technology Inc, December 2, 2021; https://investor.marvell.com/2021-12-02-Marvell-Technology,-Inc-Reports-Third-Quarter-of-Fiscal-Year-2022-Financial-Results.
9. “Marvell Technology, Inc. (MRVL); Analysis,” Yahoo! Finance; https://finance.yahoo.com/quote/MRVL/analysis?p=MRVL, last accessed January 12, 2022.
10. Thomas, L., “McDonald’s is selling digital tech startup Dynamic Yield to Mastercard,” CNBC, December 21, 2021; https://www.cnbc.com/2021/12/21/mcdonalds-to-sell-digital-tech-startup-dynamic-yield-to-mastercard-.html.
11. “Corteva Reports Third Quarter and Year-to-Date 2021 Results, Affirms Full-Year Guidance,” Corteva Agriscience, November 3, 2021; https://www.corteva.com/content/dam/dpagco/corteva/global/corporate/files/press-releases/11.03.21_3Q_2021_Earnings_Release_Graphic_Version_Final.pdf.

 

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.