Four Next-Gen Sectors to Watch
Next-Gen stocks – companies in innovative growth sectors including biotechnology, renewable energy, AI, blockchain technology, electric vehicles (EV), and others – are attracting the attention of investors with their potential for long term gains.
The original Next-Gen stocks, Facebook (Nasdaq: META), Amazon (Nasdaq: AMZN), Netflix (Nasdaq: NFLX) and Google (Nasdaq: GOOG), famous for their impressive growth, lack of volatility and superior rates of return, have dominated investor buying demand.
For those looking for high-quality growth stocks outside the original tech bubble, there are plenty of options. Companies focused on innovation and disrupting and improving established industries can have enormous upside potential.
Here is a list of four Next-Gen sectors, and related stocks, to watch:
EV – Inspiring the adoption of sustainable energy
Lucid Group (Nasdaq: LCID)
In April 2023, Lucid began testing its Gravity SUV on public roads throughout the US as part of its goal to “inspire the adoption of sustainable energy by creating advanced technologies and the most captivating luxury electric vehicles”. While EV giant Tesla (Nasdaq: TSLA) has the advantage of scale and financial capacity, smaller players such as Lucid and Rivian (Nasdaq: RIVN) are worth considering as long-term plays as the EV market continues to expand.
Security – Building a world where identity belongs to you
Okta (Nasdaq: OKTA)
As cybersecurity becomes one of the most important industries globally, companies like Okta and Ping Identity(NYSE: PING) are taking center stage. Industry analysts are also watching a new wave of startups, including privately-held Netskope, Wiz, and Snyk, that are beginning to take market share from industry leaders. Grandview Research is forecasting annual growth of 10.9% in the global cybersecurity market from 2021-2028, pointing to excellent growth potential.
Education – Improving the return on investment in education
Chegg (NYSE: CHGG)
The Covid-19 pandemic saw students across the globe turn to online learning. As the academic world has navigated significant change in the past three years, a number of promising education stocks have thrived. Industry pioneer Chegg is creating a digital education platform for US-based high school and college students. K12 (NYSE:LRN) offers a virtual alternative to local public schools or homeschooling in the US and New Oriental Education & Technology Group (NYSE:EDU) is the largest provider of private educational services in China.
Retail – A next-generation retail market
Stitch Fix (Nasdaq: SFIX)
Three-quarters of US consumers have shopped for items online, according to Statista, and the number of retail e-commerce sales is set to grow by 14.6% in the US between 2022 and 2025. Spurred by the pandemic, Stitch Fix has been busy disrupting online shopping with its curated selections of products. A number of other apparel stocks are worth considering as an addition to a balanced portfolio, including Farfetch (NYSE:FTCH), which anticipates strong double-digit revenue growth in 2023, The TJX Companies (NYSE:TJX) and Skechers (NYSE:SKX).
Next-Gen stocks offer the potential for long-term gains and an opportunity to be on the frontline of world-changing innovation. Which Next-Gen companies will be the ones to drive high-powered growth?