Strategists at Bank of America have compiled a projection of the biggest, world-transforming themes over the next two to five years, and companies that they believe would benefit.
“The future is arriving sooner than investors expect,” Beijia Ma, an equity strategist at Bank of America Merrill Lynch, said in a recent note.
“By 2020E, we see electric and autonomous vehicles, the Internet of Things (IoT), AI and other hyperbolic technologies impacting lives on Main Street. 2023E serves as an inflection point for tectonic shifts including peak labour, the maturing of Gen Y & Z, and grid parity for renewables — while many moonshots [like animal-free meat] come closer to reality.”
The team put together a list of stocks they believe would be the biggest beneficiaries of these trends. All the companies are “buy” rated by Bank of America’s equity strategists, and have “material exposure” to the themes.
Market Cap: $763.64 billion
Themes: Big data, education, future mobility, robots, millennials, smart cities, and virtual reality/augmented reality/mixed reality.
Description: “Seven 1bn+ user platforms, AI leader Deepmind and Google Brain, Waymo self-driving car, online learning (Google Apps, YouTube for MOOCs), moonshots (Google X).”
Market Cap: $465.11 billion
Themes: Big data, bottom billions, robots, millennials, and smart cities.
Description: “#1 China eCommerce retail marketplaces (Taobao, TMail), leading B2B sites (Alibaba.com, 1688.com); monetization driving revenue growth; Largest China retail marketplaces (Taobao, TMall) and leading B2B sties (Alibaba.com, 1688.com), Alibaba Pay (mobile payments).”
Market Cap: $774.80 billion
Themes: Big data, climate change, education, energy efficiency, robots, millennials, and smart cities.
Description: “Leading eCommerce co, leader in cloud and machine learning analytics (AWS), Amazon Alexa (#1 AI-enabled smart speaker), Amazon Prime / drone deliveries (logistics).”