2021 is now upon us and with it brings many great opportunities for investing. Here’s our top 5 best industries to invest in for 2021.
1. Artificial Intelligence
Firstly, there’s a reason why it feels like everyone is talking about Artificial Intelligence (A.I.). AI has steadily been implemented more and more into our society as it continues to advance. With rapidly growing technology, usually there is money to be made as well and A.I. is no exception.
Big tech giants like Google (NASDAQ: GOOGL), Nvidia (NASDAQ: NVDA), Facebook (NASDAQ: FB), and many more are all aggressively pursuing AI. According to the International Data Corporation (IDC): “spending on A.I. systems will reach $97.9 billion in 2023, more than two and one half times the $37.5 billion that will be spent in 2019″.
Not only on a company scale is there competition for the development of A.I., but there is heavy international competition as well. The United States is spending billions of dollars on their defense project, AI Next. Meanwhile, one Chinese state alone have spent over $5 billion on the development of artificial intelligence. China plans to be the leader of the $150 billion dollar industry by 2030.
As in investor, you may be curious how you can get a slice of the pie. The most effective way would be to invest in individual companies that may lead in the space like Nvidia or Alteryx (NYSE: AYX). However, the most surefire way would be to invest in a strong A.I. ETF like the Global X Robotics & Artificial Intelligence (NASDAQ: BOTZ) fund.
Overall, this industry is still at the cusp of its growth and it’s hard to say when exactly it will completely takeoff. Alternatively, when it does take off, many investors will reap very significant gains from their A.I. investments.
2. U.S. Marijuana
Next, marijuana stocks are steadily been on the rise and will continue to rise as legalization sweeps across the United States. Currently, 14 states have fully legalized marijuana and several others have legalized it partially. The next candidates to legalize are Connecticut, New York, Rhode Island, and Virginia. A nation-wide legalization is very probable as well.
Also, as of January fifth, the democrats officially control the Senate, the House of Representatives, and the presidency. Democratic legislation is extremely easy to pass now as a result. It should come as no surprise if we see legalization occur as soon as 2022. The boat is being loaded for many cannabis stocks in hopes of further legalization.
Moreover, you may be wondering how profitable the marijuana industry will truly be. The U.S. marijuana industry will generate as much as $85 billion in sales in 2030, according to Cowen analyst Vivien Azer. Holders of stocks that become industry leaders and get a large portion of this market cap will be greatly rewarded.
There’s many companies competing for a spot in this industry. One of the most popular contenders Aurora Cannabis (NYSE: ACB) which currently sits on a market cap of $1.93 billion dollars. Additionally, some smaller companies that we see as long-term winners are Planet 13 (OTCMKTS: PLNHF) and Clever Leaves (NASDAQ: CLVR). Furthermore, there’s many ETFs for cannabis for a wider range of marijuana stocks like ETFMG Alternative Harvest (NYSEARCA: MJ).
This industry may boom faster than you expect and chances are it’s in your benefit to get in now.
3. Plant-Based Foods
Thirdly, plant-based foods is easily one of the best industries to invest in for 2021. Veganism is taking the world by storm as society is becoming more health and environmentally conscious. Companies like Beyond Meat (NASDAQ: BYND) and Impossible Foods are at the forefront and are rapidly spreading across the United States.
There has been over a 300% increase in people who identify as vegans in the United States over the past 15 years and that number is growing. With this growing demand, vegan companies are generating revenues from recurring customers faster than ever before. Consequently, this is incentivizing them to expand faster and invest further into themselves.
Studies have revealed the undesirable effects that can occur with consuming meat which is further pushing vegan agenda. Right now, Beyond Meat appears to be the market leader and is rumored to soon have a deal with McDonalds underway. This deal will not only bring in very nice revenues for Beyond Meat, but it will greatly spread their brand recognition as well.
Some smaller players in the market are Tattooed Chef (NASDAQ: TTCF) and The Very Good Food Company (OTCMKTS: VRYYF). Tattooed Chef plans to spend a very hefty amount of money on advertising this year and introduce more products. Alternatively, The Very Good Food Company is still in earlier stages and is currently listed on the OTC Market.
4. Energy Storage/Renewable Energy
Further, energy storage and renewable energy are going to be very hot sectors this year. Biden has made it clear that renewable energy is one of his top priorities and he plans to spend significant money to bolster the industry.
We are becoming more and more environmentally conscious as our awareness on how we impact the world is sharply increasing. The new Democratic wave of government will fund and most likely pass legislation to help renewable energy companies take off.
We have seen companies in the past, like Enphase Energy (NASDAQ: ENPH) take off and continue to rise as they provide new environmentally sustainable technologies for our future. Consequently, either investing in existing, successful energy companies or investing in new innovative ones nearly certainly promises significant gains.
Our all-encompassing play for this industry would be the ETF Brookfield Renewable Partners LP (NYSE: BEP). Also, Star Peak Energy Transition Corp (NYSE: STPK) is soon to merge with Stem, Inc. Star Peak Energy Transition Corp is very promising, but has increased risk.
Next up, genomics is often forgotten when shopping for stocks, but this sector has already started to boom and it’s only the beginning. The likelihood for an individual to get cancer in their lifetime is over 30% and it ranks as one of the top causes of death.
Cancer is rapidly being researched and treatments are aggressively being developed. Due to the complexity of the issue, progress has been apparent, but very slow. Crispr Therapeutics (NASDAQ: CRSP), Illumina (NASDAQ: ILMN), and Genomic Health (NASDAQ: GHDX) have all been been strong, growing genomic companies.
Just by 2027, the industry is expected to grow to $31.1 Billion with a CAGR of 7.7% according to Grand View Research. These numbers could easily be considered conservative as well with how hot the industry is right now.
One of the best investments for the genomic industry is the Ark’s genomic ETF: ARK Genomic Revolution ETF (BATS: ARKG). This ETF has grown over 150% annually and is actively managed by a great team. Genomics clearly has potential and as a result has earned itself a spot in the top 6 industries to invest for 2021.
6. Electric Vehicles
Finally, electric vehicles are a very nice place to put your money in 2021 and watch it grow. This sector has certainly been one of the hottest areas in 2020 and it’s likely that the attention has been for good reason.
CAGR are expected to be as high as 29% with increasing demand and rapid innovation. Tesla (NASDAQ: TSLA) has been on the forefront of this revolution led by Elon Musk who is now the richest man in the world due to Tesla Stock. Nio (NYSE: NIO), often claimed to be the “Chinese Tesla”, is in pursuit of Tesla with plans to release a sedan in late 2022.
By 2030, 50% of China’s vehicles are expected to electric powered and 30% of United States are predicted to be electric. Furthermore, these number can easily be higher with people accepting electric powered vehicles faster than ever.
Currently, Tesla is more on the risky side. It may have a profitable future, but right now is not the ideal time to get in. If you are looking to get in a position in Tesla, it would most likely be in your best interest to wait until it has a correction.
Alternatively, some stocks that will benefit from this industry are ChargePoint (NYSE: CHPT) and XL Fleet (NYSE: XL). Switchback Energy plans to merge with Charge Point who have the largest ownership of charging stations in the United States. Meanwhile, XL Fleet’s business model is different in that they turn gas powered vehicles into electric vehicles. They do not sell their service commercially yet, but once they do there are almost certain revenues to be made.
Best Industries To Invest In For 2021: Conclusion
In summary, 2021 is predicted to be another profitable year for many investors. There are many different profitable industries to choose from and beat the market.
These 6 industries are definitely some of the best industries to invest for 2021 and beyond. By researching the best stocks to invest in, you can beat the market and have very admirable gains.