As we discussed a few weeks ago, in late October, 11 states and the U.S. Department of Justice filed an antitrust lawsuit against Alphabet Inc. (NASDAQ:GOOGL) in an effort to break up its Google subsidiary, which holds an 87% share of the American internet search market.

If you thought that was the end of Washington’s efforts to rein in Silicon Valley, now that a new administration will likely be in charge in 2021, think again.

In fact, the fire under Big Tech companies like Alphabet, Amazon.com Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Facebook Inc. (NASDAQ:FB), and Netflix Inc. (NASDAQ:NFLX) — is heating up.

The so-called FAANG companies make up 15% of the S&P 500 Index … and the United States isn’t the only country taking notice of this market dominance.

Last Tuesday, November 10, the European Union brought antitrust action against Amazon, accusing the e-commerce giant of damaging competition by using its size to gain an unfair advantage over the small retailers that sell on its platform.

The latest action against these companies could just be the first of many. As I have mentioned before, the railroads and oil companies of yesteryear could tell you what happens when your market dominance reaches such saturation.

You paint a target on your back.

For example, Joe Biden’s apparent electoral victory could mean more trouble for big social media firms like Facebook and Twitter Inc. (NYSE:TWTR).

Last week, Business Insider reported on some harsh comments from Bill Russo, a top adviser to the president-elect:

“If you thought disinformation on Facebook was a problem during our election, just wait until you see how it is shredding the fabric of our democracy in the days after,” Bill Russo, a deputy communications director on Biden’s campaign press team, tweeted late Monday.

Russo then attacked Facebook over the course of eight tweets for allowing violent and misleading content to flourish on the platform in the week following Election Day.

Indeed, Twitter, along with other big companies that host user-generated content (such as Alphabet’s YouTube subsidiary), are facing harsh criticism. Biden has expressed concerns about Section 230 of the Communications Decency Act, which grants liability protections to tech companies for the things users post on their platforms.

I’m not bringing up our next president’s potentially hostile relationship with Big Tech for political reasons. Rather, I want to make sure you understand the forces shaping the market.

All of this is key to understanding what I’m going to discuss in my next big free event — scheduled for this Thursday, November 19, at 7 p.m. Eastern (reserve your spot here).

So let’s take a closer look …

The Right Way to Pick a Winner

The dominance of the FAANG stocks and the resulting antitrust efforts against them are side effects of the phenomenon that we call the “Technochasm.”

As money flows into these companies, not only do their shares soar … but they become more dominant in the U.S. economy, society, and culture.

Just consider the chasm between Facebook’s or Apple’s influence over all our lives and the current influence of, say, General Motors Co. (NYSE:GM) or Kraft Heinz Co. (NASDAQ:KHC).

That right there is the Technochasm — the wide and growing gap between technology companies … and everyone else.

But Washington’s regulatory “hammer” isn’t now aimed at every tech company, and it would be foolish to abandon the entire tech sector because a few companies are being scrutinized.

Whether you love regulators and believe they keep capitalism honest or you hate them and think they stifle innovation, there’s no denying they are capable of nuanced thinking.

I don’t mean that they’re geniuses coming to save Big Tech from itself … or that I necessarily agree with them. Again, I’m not here to talk politics.

Rather, I think regulators can discern the very real differences between a company like Apple, which has a market cap of over $2 trillion and dominates several tech subsectors, and one of my No. 1 stock for taking advantage of the Technochasm, which has a market cap of less than $2 billion and is growing fast within its tech niche.

Though they’re both technology companies, they’re in different universes. (I’ll tell you a bit more about this small-cap company in a minute.)

It’s important to remember that the companies being targeted with antitrust action — the companies that will likely be subject to new regulations under a Biden administration — are different from other tech companies.

Even Twitter, which isn’t nearly as large as the FAANGs, is subject to scrutiny because of specific circumstances. Like Facebook, it is home to a lot of political speech, news sharing, and discussion, and so, naturally, politicians of all sorts want to regulate it.

If either Trump or Biden decided to bring further antitrust litigation or legislation against the FAANGs, it would likely be focused solely on the FAANGs and a few others.

If the government revised Section 230, it would be to regulate specific big social media companies.

All hope isn’t lost for tech stocks in general.

And frankly, if you were considering investing in one company, hoping for a big payday, the FAANG stocks shouldn’t be at the top of your list anyway.

With those stocks, you’re just trying to pick the one least likely to be targeted by regulators, and that’s a guessing game I’d rather avoid.

Instead, I recommend looking at the companies that fly below the radar … the companies that innovate and develop new technology rather than inconspicuously dominate the competition.

That small-cap favorite of mine I mentioned before is ready to capture market share left behind by a tech firm embroiled in scandal.

And it’s the perfect way to get on the right side of the Technochasm …

A Market-Share Thief

Huawei was, until recently, the undisputed leading provider of all 5G technology.

Considering that 5G is the next generation of mobile broadband that will lay the foundation for technologies like autonomous vehicles, telemedicine, smart factories and the Internet of Things (IoT), Huawei’s position at the top was highly coveted.

By 2050, autonomous vehicles are on track to add $7 trillion to global GDP every year, according to Intel Corp. (NASDAQ:INTC). The IoT will produce additional trillions of dollars of annual economic activity over the coming years.

Typically, an industry measures its growth potential in the billions of dollars, not trillions.

Huawei could have continued leading the pack, but governments all over the world have soured on the Chinese tech giant because of concerns over its ties to the Chinese government.

The Trump administration’s “National Strategy to Secure 5G of the United States of America” report spells out clearly that the U.S. government will guard the domestic 5G rollout against cyberthreats by banning “high-risk vendors” of 5G infrastructure. That language is aimed at Huawei.

The U.K. government banned Chinese suppliers from its core 5G network, and it has limited their market share of the noncore market.

In Australia, Chinese suppliers have been banned from the market.

Huawei was large enough that these countries had to investigate its ties to the Chinese government, and while the FAANG stocks probably aren’t spying for foreign nations, their market dominance means governments will inevitably scrutinize their actions as well.

In Huawei’s case, that’s good news for investors. Legendary investor Louis Navellier and I getting ready for an event outlining the best investments for getting on the right side of the Technochasm. My No. 1 recommendation right now — which I will reveal, for free, at that event (reserve your spot here) — happens to be a Huawei rival.

It operates in a segment that Huawei currently dominates — Huawei has captured 30% of the global market, while this company only has 8%. But that’s all about to change.

And the story here is not simply about this company gaining market share. It is also about the coming growth of the market it serves.

To put it simply, this small-cap company’s products boosts the speed and efficiency of 5G networks. The advent of 5G technology makes such upgrades both essential and urgent, which is another reason why this company’s stock could power higher over the next year or two.

This is just one of the many small but promising stocks that I’ve recommended to help investors get on the right side of the Technochasm.

And if you want to learn more about the hidden opportunities and under-utilized strategies that can get you ready to take on this ongoing phenomenon, join me for my next big event … my first ever with legendary investor Louis Navellier.

That event — in which I’ll reveal a free pick with 10X potential — is scheduled for Thursday, November 19, at 7 p.m. Eastern.

You can reserve your spot here.

On the date of publication, Eric Fry did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Eric Fry is an award-winning stock picker with numerous “10-bagger” calls — in good markets AND bad. How? By finding potent global megatrends … before they take off. And when it comes to bear markets, you’ll want to have his “blueprint” in hand before stocks go south.