Our economy is transforming more rapidly than perhaps ever before; here, I highlight five digital winners that all investors should take a deep look at, suggests Jon Markman, tech sector expert and editor of Pivotal Point.
The digital transformation is playing out in every sector, from finance and healthcare to retail, energy and industrial manufacturing. Here are five that hold promise:
1. Salesforce (CRM) is the quintessential digital transformation company. The San Francisco-based company makes real-time, cloud-based software to help enterprises manage customer service, sales, marketing, commerce and analytics.
It’s the dominant player in the global customer relationship management software sector, a market that is expected to reach $80 billion in sales by 2025.
2. Veeva Systems (VEEV) is like Salesforce, but for the pharmaceutical sector. That distinction might seem slim; however, the pharma and biotech sectors are highly regulated.
The software developed by Veeva includes automated regulatory filing and has become crucial to business efficiency industry wide. In other words, Veeva has built a big barrier to entry.
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3. Sony Corp. (SNE) camera sensors power most of the world’s smartphones, and the Japanese electronics giant is making a bigger push into automobiles, industrial robots and video.
Last month, the National Football League began filming parts of its broadcasts using a small Sony handheld camera connected to a 5G-capable monitor to deliver real-time images.
4. Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) operates the world’s biggest microprocessor manufacturing facility, serving Apple (AAPL), NVIDIA (NVDA), Advanced Micro Devices (AMD), QUALCOMM (QCOM) and even Tesla (TSLA).
The oddity is in a world where globalization is waning, the semiconductor sector is moving more toward outsourcing. TSM, given its scale and technical superiority, is in the best position to capitalize from this game-changing trend.
5. Mastercard (MA) isn’t so much a credit card business as it is a transaction processor. The company has no credit risk. Its sole business is processing tens of millions of transactions every day for a small fee.
The digital transformation play is that, slowly but surely, the world is running away from cash as a method of payment. Mastercard is positioned well to capitalize on that megatrend.
Investors wishing to play the digital transformation megatrend should see any weakness in these companies as buying opportunities.
