Technology stocks, almost by definition, are disrupting the way things get done. They upset the status quo and become the new standard for how the world operates.
However, although you might hear a lot of companies claiming they’re at the forefront of the revolution, just a few are truly changing how the future will be perceived and how we’ll interact with it. The two tech stocks discussed below are not only building the future, but are also transforming their businesses, their industries, and the way we will live.
Meta Platforms (META -4.58%) wants to move far beyond Facebook and Instagram as ways in which hundreds of millions of people interact with one another; it is intent on building a world in which we socialize, work, and play virtually.
It is trying to lay the groundwork for the social aspects of the metaverse by proclaiming it’s a virtual space in which we can “live.” However, other companies have competing visions based on their own needs, such as Microsoft, which is developing capabilities that relate to the workspace.
While no one has really been able to come up with a good, workable definition of the metaverse just yet, analysts suggest it could become an $800 billion industry within just two years and might even blossom into one worth $8 trillion over the long haul.
Meta Platforms is an early adopter of the concept and spent some $10 billion last year to start building it, working to develop the world’s fastest supercomputer to assist in facilitating the virtual world. It’s looking to monetize it by selling participants the gear they’ll need for it.
Admittedly, I’m not fully convinced the world is ready to part with actual reality yet, but many companies are plowing headlong into the venture and spending considerable sums to be a part of it. As a first mover in the space, Meta Platforms stands to reap the benefits if it actually becomes viable.
In that same vein, C3.ai (AI -7.97%) is applying artificial intelligence in the business world for individually configurable data and network security, customer engagement, fraud detection, and supply chains.
A lot of its business is in the energy field, where Baker Hughes sells C3’s technology to the oil and gas industry on a co-branded basis. Chairman and CEO Tom Siebel has noted that Shell, LyondellBasell, and Koch Industries have touted their ability to achieve anywhere from $1 billion to $3 billion in “economic value” by standardizing on this AI company’s software.
C3.ai also has strategic relationships with Amazon.com‘s cloud services arm, Alphabet‘s Google, Microsoft, Raytheon, and others, but it does carry risk in that just two customers account for nearly half of its total revenue.
Its stock has been beaten down because of the lumpiness of revenues, but Siebel says C3.ai is aiming to “generate sustainable positive free cash flow within eight to 12 quarters.”
It was hard to be excited about C3.ai’s valuation soon after its IPO in December 2020, but having lost nearly 90% of its value since then makes this AI stock an investment in a business building the future.