They say we’re now living in an “age of acceleration” when technological advances are coming at us at breakneck speed. Not long ago, science fiction films and novels depicted a future when we would speak to computers and they would speak back, people would take a pill each day to remain thin and private companies would shuttle astronauts and supplies into space. Well, all of those once-imagined technologies are now a reality. The rate at which change is occurring and the achievements once thought impossible even a decade ago is startling. From supercomputers spewing out medical innovations and self-driving taxis riding along city streets to aerial drones dropping off packages on our doorsteps and artificial intelligence (AI) writing student essays for them, the future has arrived.
The unsettling part is that there has been barely any time for most of us to comprehend its implications. In this fast-paced environment, clear winners have emerged among companies and their stocks. The share prices of the most innovative companies are thriving right now while most others stagnate. Here are seven cutting-edge stocks that could change humanity as we know it.
Eli Lilly (LLY)
The big market drivers this year have been artificial intelligence and weight loss drugs. The hype surrounding the new class of prescription drugs that help people dramatically lose weight without diet or exercise is building to a fevered pitch as U.S. pharmaceutical company Eli Lilly (NYSE:LLY) awaits approval of its drug Mounjaro by the U.S. Food and Drug Administration (FDA). Weight loss meds, including Ozempic, are being called “miracle” drugs that not only help with weight loss but also diabetes, heart disease and kidney disease.
Mounjaro, already approved to treat diabetes, had sales of nearly $1 billion in this year’s second quarter. The market for obesity drugs has been forecasted to reach $100 billion within a decade. Understandably, Eli Lilly is pulling out all the stops to be ready to begin selling Mounjaro for weight loss the moment the FDA gives it the green light. In the meantime, LLY stock has been a juggernaut this year, having gained 67% and pushing its five-year growth to 444%.
In the late 1970s, the rock band The Clash was called “the only band that matters.” Here in 2023, it seems that microchip and semiconductor company Nvidia (NASDAQ:NVDA) is the only stock that matters. Nvidia’s technology and advanced microchips enable everything from cutting-edge AI applications to the world’s most advanced supercomputers. Year-to-date, NVDA stock has increased 218%, trouncing the performance of nearly every other security in the market. Over five years, Nvidia’s share price is now up nearly 700%.
So great has Nvidia’s sway become that when the company reported a Q2 earnings beat at the end of August, the entire stock market rallied in response. Going forward, Nvidia’s chips and semiconductors are expected to help propel humanity forward in critical areas ranging from self-driving cars and space exploration to medical breakthroughs and increasingly connected electronic devices. The only real question analysts seem to be asking is whether Nvidia can keep up with the sky-high demand for its products.
When it comes to generative artificial intelligence, Google’s parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is the hands-down leader. The company’s DeepMind research division is, by most accounts, a driving force for the advancement of AI technologies, both in theory and practice. In fact, Alphabet was ahead of its competitors when it came to AI but was slow to release the technology and applications it developed. That is until privately held OpenAI launched ChatGPT a year ago.
Now, Alphabet is quickly catching up and integrating AI into nearly all of its technologies. The company just announced it is cascading AI across its suite of digital assistants and smart home devices. People using Google assistants will now be able to give them voice prompts to carry out increasingly sophisticated tasks such as setting timers and making hands-free phone calls. That is only one small area where Alphabet is expected to advance AI. The company’s stock is up 54% year-to-date and 153% over five years.
Intuitive Surgical (ISRG)
Another medical company pushing us into new areas is Intuitive Surgical (NASDAQ:ISRG). The company makes robotic surgical equipment that is bleeding edge technology, pushing the medical field into new areas. The company’s robotic da Vinci Surgical System is used in procedures ranging from heart and urologic to children’s and general surgery. Sales have been brisk and accelerating since the Covid-19 pandemic ended, and the backlog of elective surgeries started to unwind.
While ISRG stock is flat this year, it has gained 44% over the last 12 months and is up 63% over five years. The company continues to drive the sales of the surgical instruments and accessories used with the da Vinci system for various medical procedures. Barclays (NYSE:BCS) bank currently holds a Buy equivalent rating on ISRG stock and a high price target of $383.25, implying a 40% upside from current levels. That is a cutting-edge stock investors should consider buying before it takes off.
Another leader in AI looking to take us all into the future is Microsoft (NASDAQ:MSFT). The famed software company is arguably the furthest along when it comes to the practical applications of AI technologies. Having invested $10 billion in OpenAI, Microsoft was out of the gate with the cutting-edge technology first, integrating it into its search engine. Now, Microsoft is adding AI to its video game and cloud computing divisions, as well as in applications such as its Teams video conferencing platform and Outlook email.
Now there is talk that OpenAI is planning to begin making its own AI microchips, a development that would further benefit Microsoft as one of the privately held company’s top backers. Media reports say OpenAI is evaluating several microchip and semiconductor designers as potential takeover targets as it moves to produce its own AI chips and resolve a shortage of expensive chips needed to power its, and by extension Microsoft’s, technologies. Microsoft has made the further development of AI a top priority. MSFT stock is up 37% this year.
Tesla (NASDAQ:TSLA) is a lot more than an electric vehicle (EV) manufacturer. Under the leadership of Elon Musk, the increasingly diversified company is also developing batteries, solar panels and even advanced supercomputers that AI models can be trained on. Musk has made clear his interest in AI (he was an original founder of OpenAI) and desire to push Tesla into new areas. In the future, Tesla might be known as more of an integrated tech company than an EV maker, similar to the way Amazon (NASDAQ:AMZN) has moved beyond e-commerce.
Musk has already proven himself a visionary and has many other companies leading humanity in new directions, from private space travel through his company SpaceX to social media with X, formerly known as Twitter. Bringing these technologies together and further integrating them certainly isn’t out of the realm of possibility. In the meantime, TSLA stock remains volatile but has proven itself to be a long-term winner. This year, TSLA stock is up 132%. Through five years, it is up nearly 1,349%.
Taiwan Semiconductor Manufacturing (TSM)
Few companies are as important to the world right now as Taiwan Semiconductor Manufacturing Co. (NYSE:TSM). As the globe’s largest microchip and semiconductor foundry, Taiwan Semiconductor is responsible for making over 60% of the world’s supply of advanced microchips, semiconductors and processors. Companies ranging from Nvidia to Apple (NASDAQ:AAPL) rely on Taiwan Semiconductor, as do most of the governments around the globe.
Without the chips that Taiwan Semiconductor makes, we may not have iPhones or surgical robots — ditto for self-driving cars, video game consoles and digital assistants. Taiwan Semiconductor supplies the technology that makes the modern world run. For this reason, some governments, including in the U.S., have identified Taiwan Semiconductor as a strategically important concern. That puts the company in a very unique position. TSM stock is up 22% this year and has risen 135% over five years.
On the date of publication, Joel Baglole held long positions in LLY, NVDA, GOOGL, MSFT and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.