Many tech companies are growing their businesses and could be good long-term investments. But finding tech stocks that are really disrupting their industries and using cutting edge technology to build the future is a whole different feat.
To help you find a few companies that stand out from the rest of the crowd, let’s take a look at how Holdings reached (NASDAQ: UPST), Roblox (NYSE: RBLX), and Shopify (NYSE: SHOP) transform their industries.
Upstart Holdings: an artificially smart lending platform disruptor
For decades, lenders have relied on credit scores to determine who is a qualified borrower and who is not. The problem is that depending solely on these scores does not give lenders the clearest picture of borrowers, and it can often exclude borrowers who would have no problem repaying a loan.
Upstart Holdings aims to solve both of these issues with the company’s artificially smart lending platform. The company uses its proprietary AI to tap into the vast amounts of data available on potential borrowers and uses that data to show lenders which clients are truly the most qualified.
The company says it has 75% less defaults than the big US banks, although it has the same approval rates. He also uses his AI to automate most loans: 71% of his loans are fully automated.
Investors should expect start-ups trying to disrupt industries to generate meteoric growth – and Upstart has it in spades. The company’s revenue soared more than 1,000% in the second quarter of 2021, and the volume of loan transactions from its platform climbed more than 1,600% year-over-year to 2 , 8 billion dollars.
For investors who believe the current lending process is overdue for an overhaul, Upstart Holdings seems like a solid bet.
Roblox: the next evolution of the game
The video game industry is set to nearly double in size over the next few years, according to Global Industry Analysts, growing to a $ 293 billion market by 2027. This is great news for game developers. video and console manufacturers, but it is above all good news for the Roblox video game platform.
Roblox has a unique opportunity to take advantage of the rapidly growing video game market, as the company’s platform not only enables its users to play games, but also helps them create them.
This new approach to the gaming market has been a resounding success for Roblox. The company’s sales jumped 127% and bookings increased 35% in the second quarter of 2021 (reported August 16) and the platform now has more than 43 million daily active users on average.
Roblox’s continued success will be built on its ability to attract developers who create unique experiences for gamers. So far, Roblox has been able to achieve this thanks to its 8 million developers who have achieved 20 million gaming experiences for its users.
Roblox has only been a publicly traded company since March, and with its share price rising a modest 17% since its IPO, perhaps now is the time for investors to jump into this gaming action. disruptive.
Shopify: The future of e-commerce is still being built
It may seem like e-commerce has always been around, but we are still in the early stages of this market. Do not believe me ? Then consider the fact that in the second quarter of this year, only 12.5% of all US retail sales came from online shopping.
As the ecommerce market grows, businesses of all sizes will need a platform to be able to build their own online stores – and that’s where Shopify comes in. Shopify noticed this need years ago and has become one of the best places online. for businesses to develop their e-commerce stores.
Over 1.7 million businesses now use the Shopify platform, up from 1 million two years ago, and the company’s recent quarterly results reflect how well the business is growing. Quarterly revenue recently surpassed $ 1 billion for the first time, up 57% year-over-year, which was partially fueled by a 52% jump in Shopify’s merchant solutions segment.
Shopify has also seen phenomenal share price growth over the past few years, with its price increasing by 1000% over the past three years. And given the company’s strong lead in helping businesses set up their own e-commerce stores – and the fact that the e-commerce market is still only a fraction of total retail sales – there is likely to be plenty left room for Shopify to continue to grow in the years to come.
Worth the wait
As these tech companies use AI, e-commerce, and a gaming platform to build the future of their industries, investors need to be patient.
This means that short-term stock price gains should be celebrated, but don’t get off the ship if these stocks take a while to ramp up or suffer temporary declines. Keeping these stocks for years, not months, will be the best way to take full advantage of these innovative companies.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.