Not too long ago, 3D printing was the talk of the town … in a good way.
When 3D printing technology was first thrust into the public’s consciousness, there was a vision that one day the appliance would eventually move beyond the realm of nerdy hobbies and become commonplace in our homes.
If we needed new jewelry or a new figurine or new hardware parts, we’d simply use a template to make it ourselves, layering plastic and other materials.
Since then, it’s become increasingly evident that such ubiquity likely isn’t in the cards for 3D printing. At this stage, imagining everyone owning a 3D printer sounds a lot like imagining riding around on segways.
Here’s the thing, though: Even a technology like segways ended up finding its market — even if it fell dramatically short of the original hype. And while the two innovations may seem miles apart, segways and 3D printing have that in common.
The New Frontier for 3D Printing Stocks: Manufacturing
3D printing stocks like Autodesk (ADSK), 3D Systems (DDD) and Stratasys (SSYS) have been downright slaughtered so far this year … in part because there was so much hype around their market debuts. The idea of the next big consumer technology gets investors giddy and when it doesn’t pan out, there’s panic.
But 3D printing is simply in the middle of a transition to an enterprise focus. Which is why recent declines are growing pains — not death knells.
Because ADSK, DDD and SSYS have already suffered such dramatic damage and are also heavily shorted, there’s plenty of chatter about a continued demise. Just about any 3D printing headline can be construed as a nail in the coffin, including the recent announcement that smaller rival Carbon3D — which focuses heavily on the manufacturing sector — secured $100 million from Google (GOOG, GOOGL).
But increased competition in this case is promising, as it’s further evidence of the shifting application and real market for 3D printing products that have a manufacturing focus.
This was evident when I recently spoke with Dylan Reid, the CEO of 3D printing startup Matter — a company that’s based in Brookyln and focuses on small-scale manufacturing specifically. Reid noted the gap between innovation and application that has hounded big names in the 3D printing space. The founding team of Matter was working in the 3D printing space at MIT just a few years ago and Reid recalled that people would talk about all the innovation happening in 3D printing and then pull a 3D-printed Yoda head out of their pocket as proof.
“That technology is useless without an application,” he added.
The large gap between innovation and application helped Matter hone in on its focus. Like the 3D printing giants, it began by focusing on consumers via custom jewelry but eventually transitioned to small-scale, web-based manufacturing.
Matter’s story is a microcosm for the broader market, including the companies that you and I can actually invest in. While there will likely be more bumps to come as the technology expands, matures and finds its market — especially considering there’s both an application and business model transition taking place, as the CEO of Autodesk noted in its most recent earnings call — the long-term prospects are solid, despite the bloodbath.
If you’re willing to wait out the rockiness, 3D printing stocks could be a great bet when it comes to cashing in on a truly transformative technology.
Alyssa Oursler is based in San Francisco and writes about technology, investing, gender and entrepreneurship. Her work has appeared on Forbes, Business Insider, MSN Money and more. You can follow her on Twitter here or check out her personal site here. As of this writing, she did not hold a position in any of the aforementioned securities.
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