ARK Invest: Big Ideas 2021
As 2021 moves forward, a number of investment opportunities in disruptive innovation show promise. Here is a look at the biggest disruptive trends that ARK Investment Management sees this year.
Deep Learning AI
As artificial intelligence (AI) gains the ability to learn, adapt, and even create software based on the data it receives (An ability called deep learning), technologies like self-driving cars and medical advancements become possible. Deep learning could add $30 trillion to equity market capitalizations over the next 2 decades.
ARM processors are beginning to take over Intel processors in the processor market By 2030, ARM processors could account for 71 percent of the server market and be the default processor for cloud computing. GPU-driven accelerators should also grow dramatically, at an annual rate of 21%.
Virtual worlds, created by video games, virtual reality, and augmented reality, could grow from $180 billion to $380 billion in the next 5 years, thanks to the growth of in-game purchases, time spent in virtual worlds, and investments from major companies such as Facebook.
In the next 5 years, digital wallets are poised to grow from an average of $250-$1,900 per user to $20,000 per user, an opportunity worth $4.6 trillion. This growth is due to lower customer acquisition costs that enable digital wallets to take market share and users from banks burdened by rising costs.
If all S&P 500 companies were to convert just 1 percent of their cash into bitcoin, the value of bitcoin could increase dramatically, by $40,000. Bitcoin's maturity, stability, and potential make it a desirable portfolio addition, particularly as its trading volume has increased and investor accessibility has improved.
The sale of electric vehicles (EVs) could increase 20 fold in the next 5 years. Due in part to the fall of battery prices, EVs are becoming almost as affordable as gas-powered vehicles, and competing in efficiency and performance. In addition, cell-to-vehicle battery technology is making it possible for EVs to go further while costing less.
Automation could add $1.2 trillion to the nation's GDP in the next 5 years. Automation appeals to businesses looking to cut costs in the face of economic uncertainty, while automation could create economic benefits thanks to the increased productivity it provides, and its ability to monetize previously unpaid labor.
Autonomous ride-hailing could create $1 trillion in profits every year by 2030, thanks to its low cost to the user (about $0.25 per mile) and ability to grow the current ride-hailing market. Tesla's camera-based approach has the greatest potential, and could grow users by 20 percent.
In the next 10 years, drone delivery could create $337 billion in total revenues in delivery, hardware, and mapping. This growth would be due to the improvements in battery technology that make drone flight possible, as well as due to the lower costs and improved convenience of drone deliveries.
Satellites and rockets could deliver $370 billion in annual opportunities, as well as delivering opportunities such as more widespread Internet connectivity, shorter travel times, and human occupation of the moon and Mars.
3D printing could grow at an annual rate of 60% over the next 5 years, thanks to its ability to save time, save money, and reduce waste, and thanks to its many applications and ability to intersect with AI.
Long-Read Gene Sequencing
Long-read gene sequencing's (LRS's) accuracy and features could lead to growth of 82% per year over the next 5 years. The process delivers both accuracy and a comprehensive understanding of the genome, and with costs for LRS decreasing, LRS could be used for many different clinical applications.
Multi-cancer screening using liquid biopsies that can detect dozens of cancers in the early stages could not only grow to $150 billion in the market, but also prevent 66,000 cancer deaths a year. Multi-cancer screening costs are steadily decreasing, making these costs reimbursable and making widespread adoption more likely.
Cell and Gene Therapy
As cell and gene therapies enter the second generation, they could increase the potential market for these therapies by 20 fold. These therapies are beginning to be applied to solid tumors, beginning to be tested on allogenic cells (cells that are not the patient's), and could soon be used to edit a patient's cells without the need to remove them first. With gene therapy trials increasing 5 fold in the last decade, gene and cell therapies have the potential to add hundreds of billions of dollars in revenue in the short term.
There are plenty of ETFs that invest in these trends. Check out our investment ideas for more information.