General Overview

Innovation is the lifeblood of progress, often heralding transformative shifts across industries. From the reimagining of transportation with electric vehicles to the fortification of cybersecurity infrastructure, disruptive innovations are shaping the contours of our technological landscape.

A new study from Stanford University underscores the sustainability gains that are possible through electric vehicle (EV) battery recycling. The discovery of sabotage within a key piece of code underlying the internet serves as a reminder of the perpetual battle against cyber threats and the imperative of innovation in defense mechanisms. And the convergence of artificial intelligence (AI) and sovereign data storage heralds a new era of tailored solutions and heightened data sovereignty.

Similarly, advancements in genomics, fintech, robotics, automation, and 5G technology continue to push the boundaries of possibility, promising unparalleled efficiencies and capabilities across diverse domains.

In this era of disruptive innovation, each breakthrough underscores the march toward a future defined by unprecedented efficiency, security, and connectivity.

Sector Specific Updates

Automobile Innovation

A new analysis by Stanford University researchers found that electric vehicle (EV) battery recycling, such as that done by leading U.S. battery recycler Redwood Materials, is shrinking EVs’ environmental footprint and producing up to 80% fewer emissions than the traditional EV battery supply chain.

While the superior efficiency and fuelless nature of electric motors result in a 70% reduction in total emissions over an EV’s lifespan, there is room to improve. In the U.S., EVs take around 41,000 kilometres to break even with traditional vehicles, for example, assuming all materials end up in landfills.

However, EV batteries are too valuable to landfill, so an industry of EV battery recyclers has emerged, becoming instantly profitable and able to recover over 95% of critical minerals, significantly reducing emissions. The Stanford University study showed that Redwood Materials’ recycling process emits 80% fewer CO2 emissions than traditional methods, shortening an EV’s environmental break-even point to around 24,000 kilometres. EVs with recycled batteries that are charged from renewable energy sources could eventually break even on emissions within a matter of months.¹

Cybersecurity

The cybersecurity industry was shocked in April when a German software developer employed by Microsoft accidentally discovered deliberate sabotage in the latest version of the critical open-source program XZ Utils. Open-source software like XZ Utils underpins much of the internet, as such programs are free, offering transparency and flexibility for programmers. This sabotage, if undetected, could have provided hackers unauthorized access to countless servers across the internet, opening them to ransomware and other forms of cyberattack.

Security analysts emphasize that the fortuitousness of this detection (discovered, as it was, before widespread deployment) averted a potential cybersecurity catastrophe. This near-miss has served as a critical wake-up call to the vulnerability of open-source software.

U.S. government officials, including Assistant National Cyber Director Anjana Rajan, have highlighted the necessity of fortifying open-source software against such threats, with the Cybersecurity and Infrastructure Security Agency advocating for increased support and contributions from tech companies. This sabotage incident has also instilled a sense of unease within the open-source community, prompting calls for greater safeguards.²

Cloud Computing

In April, Oracle’s CEO, Safra Catz, reported robust growth in cloud infrastructure contracts and a 25% increase in cloud revenue year over year. The company anticipates AI will have a more pronounced impact on its revenue starting from FY25.

Oracle is also focusing on specialized areas like sovereign AI cloud services, which cater to countries wanting to store AI data within their borders, positioning itself as a leader in this emerging field. Further, a partnership with Nvidia aims to deliver sovereign AI solutions globally.

These strategic moves have been well-received, with analysts from Wedbush Securities and JPMorgan noting Oracle’s potential for significant growth and increased IT spending in AI across the software landscape.³

E-Gaming

In the second edition of Newzoo’s annual PC and console report, the gaming industry reflects on a year marked by highly anticipated game releases and significant layoffs. Nevertheless, optimism prevails, fueled by emerging markets attracting new players and gaming becoming increasingly mainstream.

The forecast predicts a conservative yet steady growth trajectory, with the market expanding by an estimated $13.4 billion from 2023 to 2026. Console gaming is expected to drive most of this growth, buoyed by factors such as the game-as-a-platform model and the anticipated launch of a new Nintendo device.

Newzoo forecasts a Compound Annual Growth Rate (CAGR) of 1.6% for PC players, reaching 909 million, and 3% for console players, reaching 664 million by 2026. Despite challenges and market shifts, the report underscores opportunities for adaptation and growth in the evolving landscape of PC and console gaming.⁴

Genomics

AstraZeneca announced that a combined therapy using its cancer drugs Truqap and Faslodex received a positive recommendation for European Union approval in treating adult patients with estrogen receptor (ER)-positive advanced or metastatic breast cancer after a successful Phase III trial. In this trial, the combination of Truqap and Faslodex slashed the risk of disease progression or death by 50% compared to Faslodex alone. With breast cancer remaining a significant cause of cancer-related deaths in Europe, affecting over 550,000 new patients yearly, this recommendation signifies a potential breakthrough with widespread application.⁵

Fintech

PayPal’s cross-border money transfer service, Xoom, has unveiled a new feature allowing U.S. users to send money abroad using PayPal USD (PYUSD), a U.S. dollar-denominated stablecoin. Xoom’s initiative simplifies the process for U.S. users, allowing them to seamlessly utilize PYUSD as a funding source for sending money abroad. Upon selection, Xoom converts PYUSD to USD within the user’s PayPal Cryptocurrency Hub without incurring crypto sale fees, ensuring recipients in 160 countries can receive funds in their chosen fiat currency.

This move aligns with consumer demand for cost-effective cross-border payment solutions, especially considering the World Bank’s Q3 2023 report indicating a global average cost of over 6% for sending $200. By leveraging USD converted from PYUSD, Xoom offers a more economical option for international transfers.

Users can access these services via the Xoom or PayPal mobile app or through the companies’ websites.⁶

Robotics & Automation

Keyence (held by the Fund) has debuted an AI-driven code reader lineup, the SR-X series, tailored to decode challenging, damaged codes in automated scanning environments. The series comprises five models, all featuring CMOS sensors and autofocus capabilities.

Powered by an advanced AI decoding algorithm, these readers excel at deciphering tough-to-read and damaged codes. They support various barcode formats, including QR, DataMatrix, and GS1 Composite, with a maximum reading distance ranging from 47mm to 1000mm.

Compact in size with IP65/IP67 ratings, the readers withstand diverse environmental conditions, operating between 0°C to 45°C and 35% to 95% humidity. Tailored for tasks like reading codes on plastic pouches, vinyl covers, and cardboard boxes, the SR-X series offers a reliable solution for industries requiring precise code reading capabilities.⁷

5G

Cradlepoint unveiled its NetCloud SASE platform, merging 5G-based cellular SD-WAN with security features like zero-trust and remote browser isolation. Addressing the challenges of dynamic environments, the platform secures shifting locations, IoT devices, and remote employees, leveraging 5G technologies to support agile operations.

Cradlepoint emphasized the platform’s simplicity and integration, stating it unifies cellular, SD-WAN, and security functionalities. They stressed the importance of zero-trust security in dynamic networks, ensuring consistent policies follow users and devices.

The solution includes NetCloud Manager for cloud-based management and utilizes cellular and Ethernet networks for connectivity. Options for local deployment include NetCloud Exchange Service Gateway. Following Cradlepoint’s acquisition of Ericom Software, the platform incorporates Ericom’s secure service edge solutions. Early access to NetCloud SASE is now available, with general availability slated for late Q2 2024.⁸

EDGE ETF: Investment in Innovation

The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5G, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/. Give your portfolio an EDGE.

Portfolio Strategy and Activity

For the month, Microchip Technology Inc made the largest contribution to the Fund, followed by PayPal Holdings and Keyence Corporation. The largest detractors to performance for the month were Evolve Automobile Innovation Index Fund, followed by Evolve Cloud Computing Index Fund and Evolve Cyber Security Index Fund.

 

Sources

1. Randall, T., “Battery Recycling Shatters the Myth of Electric Vehicle Waste,” Bloomberg, April 24, 2024; https://www.bloomberg.com/news/articles/2024-04-24/battery-recycling-shatters-the-myth-of-ev-battery-waste
2. Satter, R., “Why a near-miss cyberattack put US officials and the tech industry on edge,” Reuters, April 5, 2024; https://www.reuters.com/technology/cybersecurity/why-near-miss-cyberattack-put-us-officials-tech-industry-edge-2024-04-05/
3. Chiang, S., “Oracle boosts its generative AI capabilities as cloud competition heats up,” CNBC, April 29, 2024; https://www.cnbc.com/2024/04/29/oracle-boosts-generative-ai-capabilities-as-cloud-competition-intensifies.html
4. “The PC & Console Gaming Report 2024,” Newzoo, April 2, 2024; https://newzoo.com/resources/trend-reports/pc-console-gaming-report-2024
5. “Truqap plus Faslodex recommended for approval in the EU by CHMP for patients with advanced ER-positive breast cancer,” AstraZeneca, April 29, 2024; https://www.astrazeneca.com/media-centre/press-releases/2024/truqap-recommended-for-eu-breast-cancer-approval.html
6. “Xoom Enables PayPal USD as a Funding Option for Cross-Border Money Transfers,” PayPal, April 4, 2024; https://investor.pypl.com/news-and-events/news-details/2024/Xoom-Enables-PayPal-USD-as-a-Funding-Option-for-Cross-Border-Money-Transfers/default.aspx
7. “Keyence Launches AI-Powered Code Reader Line,” Vision Systems Design, April 22, 2024; https://www.vision-systems.com/factory/article/55020046/keyence-launches-ai-powered-code-reader-line
8. Dubie, D., “Cradlepoint unveils 5G SASE platform for mobile, distributed environments,” Network World, Apr 24, 2024; https://www.networkworld.com/article/2095089/cradlepoint-unveils-5g-sase-platform-for-mobile-distributed-environments.html

Header Image Source: Getty Images Credit: Yuichiro Chino

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