The global pandemic has illustrated that our global economy and its symbiotic trading ecosystem is more delicate than corporate America initially thought. US businesses are now looking towards automation to reduce both their risk abroad and long-term marginal costs.
According to CPB’s world trade monitor, global trade fell by 12.5% in Q2, the largest plunge since the data collection began 2 decades ago. With staggered economic lockdowns across the globe, supply chains have been in disarray, and enterprises are beginning to rethink their operations abroad.
Automation is popping up in the most unlikely places, like hospitality businesses with automated bartenders and robotic servers. The marginal cost to maintain staffing during duress times has been made apparent amid this pandemic as the government mandates bars and restaurants to limit capacity and completely close their doors in some cases.
I will breakdown a couple of well-positioned stocks set to dominate the automation space in the roaring 20s.
I have been touting Twilio as a buy since it was trading below $100 earlier this year. Today the stock is sitting at $265 per share and poised to go higher. Since its Q1 earnings release in May, TWLO has appreciated 115%, and analysts continue to raise their price targets on this revolutionary stock.
Twilio is a cutting-edge automation company that leverages artificial intelligence (AI) to help companies provide the most effective customer service. Twilio’s unmatched AI capabilities, embedded in its remarkable customer engagement platform, could mark the end of foreign call centers.
Twilio is a platform-as-a-service (PaaS) company that provides businesses with a cloud-based programming platform, aka application programming interface (API), for digitalized communication. This interface gives developers the ability to add voice communication, messaging, video, and communication-based security to any mobile application, website, or other digital platform.
Twilio’s AI-powered PaaS is trusted by many enterprises that rely heavily on customer satisfaction for continued growth. Companies like Uber (UBER), Lyft (LYFT), Airbnb, DoorDash, Twitter (TWTR), and countless others depend on Twilio’s smart platform to keep their customers happy.
There is a good chance that you have interacted with this exceptional PaaS at some point in your recent life. Twilio’s capabilities are only going to improve, and its adaptation will continue to grow.
According to Twilio’s most recent annual report, the cloud-based “platform serves over 180 countries today, making it as simple to communicate from São Paulo as it is from San Francisco”. The company has over 200,000 active customer accounts, as of June 30th, more than tripling its clientele in only a year and a half.
18 out of 22 analysts are calling TWLO a buy today, with price targets sitting around $300 per share, representing an over 13% upside even after its crazy drive this year. Over the next decade, I am confident that this stock will push past $300 and towards the stratosphere as its leadership in this growing niche, but essential space continues to stimulate demand.
Taiwan Semiconductor Manufacturing Co. (TSM)
TSMC is leading the fourth industrial revolution from behind the scenes. TSMC is the largest semiconductor manufacturer in the world (54% share) with a market positioning that is multiples ahead of its competitors. A world run by automation will need the highest quality chips and TSMC’s control of the manufacturing positions it to be a primary driver of the roaring 20s looming automation tsunami.
This is another stock that I have been hyping as an excellent buy since last summer. This stock had been trading below $50 as recently as the end of May.
Building for The Future
TSMC creates 85% of the world’s semiconductor prototypes. Its Open Innovation Platform supports start-ups and enterprises alike by reducing design barriers and improving first-time integrated circuit (IC) success.
TSMC has seen more semiconductors than any other company in the world. They are not only working at the largest scale but also with the most state-of-the-art technology to improve a firm’s “design time, time-to-volume, time-to-market, and ultimately, time-to-revenue,” according to TSMC investor relations site.
The most trusted tech names in the world turn to the most trusted semiconductor foundry on the globe for their manufacturing and innovative needs. TSMC’s customers include companies like Intel (INTC), Nvidia (NVDA), Broadcom (AVGO), Qualcomm (QCOM), and even Apple (AAPL).
More and more tech companies are turning to foundries for their IC production needs as the technology required to compete becomes impossible to produce in-house. For example, Samsung and TSMC recently teamed up in the development of 5-nanometer transistors, which would give it the ability to put 30 billion transistors onto a chip the size of your fingernail.
This company has an enormous amount of growth ahead of it. Its realized economies of scale have rippled through the company’s financials, positioning it to reap the benefits from the next wave of hyperscaling, AI development, as well as the implementation of 5G technology. All these revolutionary technological developments are going to propel the necessity of automation as technology becomes cheaper, faster, and more effective than human capital.
Every recession ends with increased automation, and 2020’s medically induced economic coma is far from an exception. This most recent economic downturn has catalyzed economic digitalization like we have never seen before. Automation will be a centerpiece of the roaring 20s, and these two innovation-driven enterprises will be leading its development over the next decade.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.