The Forever Battery… And 3 Other Tech Investment Trends for 2023

tech investment trends - The Forever Battery… And 3 Other Tech Investment Trends for 2023

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In 1977, British chemist M. Stanley Whittingham created the first rechargeable lithium battery.

It was somewhat impractical, given lithium metal’s tendency to catch fire.

Still, it was only a matter of time before this “miracle technology” became usable. In 1991, Sony (NYSE:SONY) managed to commercialize a lithium-ion battery that used no pure metal in it. And by 2001, researchers had developed 1,900mAh versions that are still strong enough to power the most current smartphones.

Today, electric vehicles (EVs) are creating a new challenge for lithium-based batteries.

Each car requires the power of around 10,000 smartphones, which so far has been achieved by stringing around 10,000 battery cells together.

That’s expensive. Around 60% of a Chevy Bolt’s costs are its batteries alone.

But technologies are improving. And that’s why Luke Lango has been so excited about the “Forever” Battery since 2021. In his research, he’s found a company that promises to change the economics of batteries the way Sony did it for personal electronics.

And InvestorPlace.com readers are finally getting excited about cutting-edge technologies too.

Here are the four “need-to-know” technological trends for 2023 they’re reading right now.

1. The “Forever” Electric Vehicle Battery

Luke dives into QuantumScape (NYSE:QS) in his most recent Forever Battery update.

The San Jose-based firm is working on solid-state battery technology that promises to significantly increases the energy density of lithium-ion cells.

With solid-state batteries, the name pretty much says it all. Take the liquid electrolyte solution in conventional batteries. Compress it into a solid. Create a small, hyper-compact solid battery that lasts far longer and charges far faster because it has zero wasted space.

Shares of QuantumScape have risen 50% this year already (dare I say they’re on fire?).

Analysts have revised their 2025 revenue estimates from zero in early March to $14 million today. They’re essentially pulling commercialization expectations forward by around a year — something almost unheard of in venture capital funding.

Of course, the battery startup has a whole list of risks longer than a Tesla (NYSE:TSLA) self-driving waiver. The firm has been the target of several short-selling reports that allege the technology is further behind than management claims. And these types of “long duration” stocks have profits so far into the future that tiny changes in interest rates can cause valuations to swing.

But investors are still piling in.

And experience has told us that when investors get excited about a technology, the resulting boost in share price can create a self-fulfilling prophecy that funds promising candidates to commercialization.

2. Cybersecurity

InvestorPlace.com readers have also become increasingly interested in “safer” tech bets like cybersecurity.

Last week, Muslim Farooque’s “7 Cybersecurity Stocks to Buy ASAP” notched one of the largest audiences of any piece. It’s a clear-eyed look into the high-growth world of next-gen cybersecurity firms.

It’s easy to see why investors are interested. Cybercrime is expected to cost up to $10.5 trillion annually by 2025, according to the World Economic Forum. And safety-related technologies such as autonomous driving and connected medical devices raise the stakes in this cat-and-mouse game.

That’s why Wall Street analysts expect Muslim’s seven stocks to grow revenues 7x faster than stocks in the S&P 500, and earnings per share (EPS) at 3.4x the speed. And it’s also why investors are suddenly eyeing this high-potential sector once again.

3. Hydrogen

Readers of Smart Money know that Eric Fry has become extremely interested in green hydrogen stocks. A combination of technological advances and the decreasing attractiveness of fossil fuels means that companies in the space are finally reaching commercialization.

Ian Cooper has also been covering the trend on InvestorPlace.com, our free news site. In his most recent report, Ian outlines his seven hydrogen stocks sitting in the sweet spot. It’s an overview of the more established players in the space that includes blue-chip firms like Air Products and Chemicals (NYSE:APD) and Linde (NYSE:LIN) that have existing industrial gas businesses.

But profitable legacy businesses cut both ways. For readers interested in higher-growth hydrogen startups, Eric outlines them here.

4. Fintech

Finally, Josh Enomoto’s piece on SoFi Technologies (NYSE:SOFI) highlights renewed retail interest in fintech firms.

On March 31, rumors began to swirl on social media that SoFi, an online bank and loan servicer, would buy a “top rated mortgage lender and servicer.”

Shares spike 6% on the news, one of its best showings so far this year.

The California-based lender would eventually confirm these rumors after announcing a tie-up with Wyndham Capital Mortgage.

It’s not the only fintech play investors are watching. On Tuesday, Chris MacDonald noted how Bitcoin’s (BTC-USD) halving in 2024 creates a final chance to buy cheap Bitcoins this year.

Lower block rewards will likely lead to “the necessity for price increases to justify mining activity,” Chris writes.

“Using history as a guide, there’s a strong correlation between halving events and a surge in Bitcoin’s price … Accordingly, for those looking to play the odds, this upcoming halving event is the key catalyst to watch. It’s certainly on my radar and one I think should be getting more attention right now.”

AI… Quantum Computing… Solar… Oh My!

Growth investors have seen fads come and go before.

In 2007, solar stocks were all the rage as oil prices climbed. Quantum computing had a brief moment in 2004. And who can forget the dot-com bubble of the late-1990s, when some investors thought that the Flooz e-currency would take over the world?

But these “fads” often come back stronger than before. America now produces almost as much of its electricity from renewables as it does from coal, according to the Energy Information Agency. Quantum computing is finally becoming a reality. And cryptocurrencies are taking share where Flooz failed.

Not every investment fad comes true, of course. Spring spokes for cars never quite replaced pneumatic tires as Popular Mechanics thought they might back in 1914. And I’m still waiting on a self-driving flying car to deliver a quantum computer to my 3D-printed home. Such dreams will likely take a decade or better to achieve.

But the technologies listed in this letter are compelling because each already have a realistic path to commercialization.

Fintech and cybersecurity are more straightforward, since they rely on gradual product improvements. But step-change industries like solid-state batteries and green hydrogen are also beginning to show promise.

2023 began with the promise of generative AI. It will likely finish with more established technologies taking hold.

On the date of publication, Tom Yeung did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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