As we transfer into 2023 and past, we anticipate to see main technological traits proceed to shift the way in which we expertise and work together with the world. The digitization of the financial system is continuing at a brisk tempo, and enterprise leaders all over the world at the moment are taking full benefit of the more and more broad set of automation applied sciences out there, from improvements in software program and the cloud to developments in robotics and machine studying.
We consider these traits will present funding alternatives associated to 5 key themes, every a possible secular beneficiary, which will assist traders make the most of cyclical market weaknesses.
Top 5 Technology Trends for Investors to Watch in 2023:
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Liquid Biopsy Will Enable Early-Stage Cancer Detection |
Autonomy Will Redefine Mobility |
Now Entering a World of Connected-Care |
AR/VR Will Break Barriers Between the Physical & Digital Worlds |
Reshoring Will Drive an Automation Revolution |
ROBO Global presently provides three revolutionary index portfolios to permit traders to capitalize on these 2023 know-how traits, together with our Robotics & Automation Index (ROBO), Healthcare Technology & Innovation Index (HTEC), and Artificial Intelligence Index (THNQ). To study extra, go to our web site at www.roboglobal.com.
Webinar Transcript:
Lauren Hein:
Hi all people. Thank you for becoming a member of us this morning for our Disruptive Trends to Watch in 2023 dialog. I’m Lauren Hein. I’m the pinnacle of Advisor Relations at ROBO Global. I’m right here with our analysis staff, our esteemed trade consultants, Jeremie Capron, my director of analysis, Lisa Chai, our senior analysis analyst, and Zeno Mercer, our analysis analyst. And we’ll cowl the applied sciences that actually excite us going into the brand new yr. First issues first. You can obtain this report at roboglobal.com, and they need to have been emailed out to you at registration as properly. So they need to be sitting in your inbox if you would like to observe together with our dialog. Our 5 traits to observe this yr within the order that we’ll focus on them at present. Number one, liquid biopsy will allow early-stage most cancers detection. Number two, autonomy will redefine mobility. Number three, now getting into a world of related care. Four, AR/VR will break obstacles between the bodily and digital worlds. And our closing thrilling development for 2023 is reshoring will drive an automation revolution. So the primary query I assume is open to all people, then we’ll begin with the liquid biopsy dialog with Zeno. How did you guys arrive at these 5 traits for the yr?
Jeremie Capron:
Well look, at ROBO we expect robotics, AI, and healthcare applied sciences are a set of applied sciences that may be utilized to so many industries, very very like the web over the previous 20 years, and in the previous few years we hit an inflection level and we have seen machine intelligence considerably widen the vary of doable purposes. So a decade in the past was primarily about robots automating the manufacturing of automobiles. But in the previous few years we noticed robots popping out of the manufacturing facility and discovering large purposes in so many areas, warehouses, logistics, now we have flying robots, now we have robots driving automobiles and vehicles, now we have surgical robots, now we have automated techniques throughout us, in labs, in transportation. So there have been so many areas to select from. And so we slender it right down to these 5 traits as a result of we consider they’ll have an vital impression on funding methods over the subsequent few years.
Lauren Hein:
And I did have a look at the 2022 traits report, and there is some continuity there from what you guys had been enthusiastic about final yr for positive. Zeno, I’m going to begin with you. Talk to us about liquid biopsies early-stage most cancers detection, and stroll us by this primary section of the report.
Zeno Mercer:
Right. So one of many first development that we highlighted for 2023 is the idea often called liquid biopsy, which is basically the flexibility to detect most cancers within the blood, the purpose being to detect it earlier and fewer value invasiveness to stop the unfold from stage one to stage two, stage three, stage 4 most cancers, and in the end present an outlet, a capability for extra folks to get remedy for most cancers. So I feel one factor to consider right here is first, what’s liquid biopsy? Essentially it is detecting tumor DNA within the blood. This builds upon years and years of know-how development, each {hardware} and software program, that has allowed firms to exit and market merchandise, get FDA approval, actually, after which get insurance coverage reimbursement from offering these companies as a result of they validated the medical efficacy of this. But in the end, liquid biopsy is a know-how that we actually consider will take off in 2023 with new approvals and elevated uptake of individuals using this going ahead.
Lauren Hein:
Do you’ve any particular firms which might be inside any of our indexes that excite you on this know-how? What would you say is possibly the publicity inside any of our indexes by share foundation? Give us some recommendation right here.
Zeno Mercer:
Okay. So I’ll begin together with your second query right here. So our publicity and the way we have a look at the subsectors, if you’ll, that now we have related to liquid biopsy. It could be remiss to speak about liquid biopsy with out speaking concerning the Genomic house. And now we have about 11% uncovered to the Genomic house by firms corresponding to Illumina. So Illumina actually is a pioneer of DNA sequencing, which is really enabling the liquid biopsy house to behave and work. So Illumina additionally pioneered one of many first… They weren’t actually the primary to market with a liquid biopsy, however that they had an attention-grabbing story the place primarily they had been doing non-invasive prenatal testing in 2013 on ladies who’re pregnant, to detect if their kids, their infants, they had been nonetheless within the womb, had any genetic ailments, NIPT, non invasive prenatal testing. What they discovered although was that they really detected most cancers tumor DNA within the samples they obtained.
And they realized that, hey, we’re discovering most cancers in ladies and a few of these folks won’t know they’ve it. So they really went out and reached out to all of the those who had submitted samples, and so they truly found that sure, many certainly had no indication, no signs, no analysis, something. And so what they realized is that, hey, we’re onto one thing right here and we are able to truly detect most cancers in blood like that. Now, they don’t seem to be the one ones who’ve completed this. In reality, one other firm referred to as Guardant Health had truly already been a little bit additional alongside in progressing their Guardant 360 system or assay, actually, which may detect most cancers early as properly. So these are two totally different firms that now we have. There’s additionally a 3rd, Vercyte which has a lot of merchandise which might be detecting particular cancers corresponding to lung most cancers, thyroid most cancers, and prostate most cancers, which might be already available in the market at present and out there to folks to be used and getting for utilization.
So medical doctors are prescribing this if they’ve any signs or if they seem to be a excessive danger inhabitants. Back to Grail although, which is the corporate that Illumina spun out. Essentially Grail has a pan most cancers take a look at that may detect over 50 several types of cancers. And that is out there to most people now, nevertheless it’s presently about $850 a take a look at. And it isn’t coated by insurance coverage. So that’s of their pipeline to attempt to get coated within the subsequent a number of years. But, for instance, you thought you may need most cancers or it was uncertain a physician might truly prescribe this take a look at. So there could be an out-of-pocket pay for $850 presently. But if you concentrate on how a lot cheaper that will be than ready years to detect and discover a later stage most cancers, you may actually begin to see the profit right here of how early most cancers detection, at that baseline value, if it will get coated, could possibly be very impactful for the healthcare ecosystem and people’ lives.
Lauren Hein:
Is there a world that you simply envision within the close to future the place we’ll go in for routine blood work and begin doing a little commonplace most cancers screenings at that time?
Zeno Mercer:
Yes. So sooner or later, liquid biopsy will in all probability be part of yearly or bi-annual screening for folks. It might rely, possibly there is a particular most cancers that’s greater danger for a person, and if that take a look at had been cheaper, possibly that will be the take a look at that will be opted in for. But in the end, as the price of sequencing goes down, as this know-how improves and scales out and so they can have improved economies of scale from the fee construction, you may undoubtedly begin to see liquid biopsy, extra of an annual screening, and most cancers detection charges would technically go up, however the stage at which most cancers is detected will go down, which might enhance the survival charges of many, many individuals. You have disparities of 5, 10, 20x survival charges for a lot of cancers, and plenty of of these, which haven’t got a correct or established protocol for detection. So that is actually sport altering know-how that we consider could have speedy adoption ramping up within the subsequent a number of years.
Lauren Hein:
So to tie this again to our HTEC index, primarily these firms you take into account within the genomic subsector, are there different secondary subsectors which might be touching this?
Zeno Mercer:
Yeah, so whereas I began with Genomics because the core, we even have the Diagnostic subsector, which is 15% of our index and the Process Automation. So if you concentrate on how the liquid biopsy course of works, you’ve firms which might be constructing particular assays that may go and both acquire or detect the most cancers itself, however there’s additionally Lab Process Automation. It must be collected, it must be securely transported again to a lab. It’s not being completed on web site, usually talking. And then one other secondary market that we even have publicity to here’s a Precision Medicine aspect. So whereas earlier most cancers detection is a good factor and may present higher outcomes, on the opposite finish of the spectrum the precise remedy protocols in place are being tremendously enhanced by the event of precision medication with CAR T therapies, CAR NK therapies and different precision medication that may goal the most cancers with out extra of a shock and strategy like chemotherapy and different strategies.
So we’re actually enthusiastic about seeing early detection, met with extra exact medication, having an enabling impact at decreasing most cancers mortality charges and the general value and burden of most cancers from each an financial and alternative value for folks.
Lauren Hein:
Awesome. Zeno, undoubtedly one thing that touches all people. So thanks a lot for that outlook. Jeremie, I’m going to pivot over to you. Let’s speak about autonomy redefining mobility. And truly that is an extension of two of the themes from final yr’s report that robots are coming to avoid wasting the provision chain and {that a} manufacturing facility automation tremendous cycle is right here. So possibly a very good place to begin is speaking concerning the greatest progress alternatives in mobility and related autos within the subsequent upcoming yr.
Jeremie Capron:
Sure. Well look right here, the important thing phrase is autonomy, and autonomy is the subsequent step of improvement for machines. And so till just lately, automation was actually about programming machines and computer systems to do repetitive issues in a really systematic means, very quick and precisely. Now, with the appearance of machine intelligence, we’re in a position to push it to the subsequent stage, which is autonomy and techniques that may make selections primarily based on their atmosphere and the way it adjustments. And in order that’s been enabled by large progress by way of computing energy, by way of gathering robust knowledge units and working machine studying onto them. And then by way of actuation and the way these machines are in a position to react actually quick. So in fact we’re all speaking about autonomous automobiles, and that is the holy grail on the market. And frankly talking, we’re getting shut. We’ve seen the beginning of the primary ROBO taxi companies, business companies, being launched within the United States during the last couple of years, in order that’s coming actually quick.
But we expect that is simply the tip of the iceberg. And in actuality, autonomous mobility is gaining a whole lot of traction in areas that you could be not pay attention to. And one of the vital promising areas, in our view, is absolutely within the warehouse. So it goes again to what you had been saying decrease and about warehouse automation. In reality, there are a whole lot of 1000’s of autonomous cellular robots working at present in distribution facilities for e-commerce and in different areas of the provision chain. We suppose that is in all probability the faster-growing and most enjoyable piece of autonomous mobility from an investor’s perspective at present. There are a whole lot of firms concerned on this space, lots of that are within the ROBO Index.
Lauren Hein:
I need to ask you subsequent concerning the firm particularly within the ROBO Index, however do you envision a world sooner or later the place warehouses are totally autonomous with none people current there in any respect? Maybe not in 2023, however additional out?
Jeremie Capron:
Yeah, that is actually the course we’re taking. And if you concentrate on how manufacturing has turn out to be very a lot automated areas like automotive and client electronics and issues like that, these producers are tending in the direction of, what we name, the sunshine out manufacturing facility the place you mainly can flip off the lights as a result of there is not any one in there. And we’re not fairly there but at present. But I feel the purpose for provide chains and warehouses and distribution facilities may be very comparable. But at present we’re so removed from that. In reality, right here within the United States, now we have greater than 17,000 warehouses, and a low single-digit share of these are automated at present. So there is a great distance by way of adopting all kinds of automation gear first after which transferring to autonomous cellular robots, and in the end the lights out the warehouse.
Lauren Hein:
So simple segue to firms which might be going to profit as we do extra autonomous techniques with logistics and manufacturing automation. So what are a few of your favourite firms? I’m assuming most of those are within the ROBO Index particularly.
Jeremie Capron:
Yes. We suppose provide chain optimization and warehouse automation and real-time stock administration are the true focus right here, and you will find within the ROBO Index, many firms concerned in warehouse and logistics automation. You’ve acquired all kinds of various enterprise fashions. You’ve acquired firms like Zebra Technologies right here within the US that do real-time asset monitoring, the monitoring, and tracing of elements of parcels in a provide chain. You’ll discover firms like KION in Germany which does logistics automation options for the large gamers, or Daifuku in Japan, that is the world chief in materials dealing with gear. You’ll discover software program companies like Manhattan Associates, that is a US-based software program firm that does warehouse administration techniques, or I can consider Auto Store that is primarily based in Scandinavia and does very compact automated storage techniques. That’s gained a whole lot of traction and that went public final yr.
Lauren Hein:
I’m going to tug you again actually shortly to autonomous autos. Maybe let’s first cease with electrical autos. Do you see a transition within the close to future until all of the automobiles on the roads will probably be electrical after which the subsequent step will probably be autonomous autos? Then I need to speak about firms which might be going to profit from progress in these areas, particularly.
Jeremie Capron:
Yeah, we actually suppose that electrical autos supply a whole lot of benefits over conventional combustion engine-based autos. And the advantages are so huge that the market goes to shift naturally towards that. The large query mark is over the tempo of this transition, and we are able to debate round that, however the development may be very clear and really highly effective. And if you happen to have a look at investments being made by OEMs, we have seen a dramatic shift over the previous two to a few years by way of allocating to EVs. So that development is firmly in place. And it is vital as a result of an electrical automotive is basically a a lot less complicated automotive than a combustion engine-based automotive. There are fewer transferring elements, the upkeep is simpler, and the design is simpler, however you want very vital investments by way of manufacturing belongings to ship these.
In phrases of the beneficiaries of the extra electrical and good automobiles, we see rather a lot across the semiconductor trade and the businesses that ship the chips which might be used for the computing aspect or for the pc imaginative and prescient aspect. And in ROBO, you may discover firms like Ambarella that does pc imaginative and prescient on a chip, and whose know-how is embedded within the subsequent era of autos, otherwise you’ll discover firms like Qualcomm and Nvidia, and Hexagon additionally in Europe.
Lauren Hein:
Okay. Something within the report that we’ve not talked about but is drones, drone know-how, particularly for a last-mile supply answer. Is that one thing you suppose is life like? Is that one thing we expect is inexpensive? And do now we have any drone publicity inside ROBO?
Jeremie Capron:
Yes. Drones, we regard as flying robots, and we expect there’s an enormous market potential for this sort of know-how. Today it is nonetheless extra of a distinct segment, however all the large gamers are experimenting with drones, from supply purposes to stock administration indoors. We suppose, proper now, on the business aspect, there’s an awesome alternative to make use of drones for monitoring and surveillance, and surveying outdoor. It will be public infrastructure, it may be energy utilities, it may be utilized in mining and building, and agriculture. And that is the place autonomous drones are gaining traction proper now. So by way of publicity inside ROBO, it is as soon as once more going to be on the chip aspect, and corporations like Nvidia and Analog Devices are concerned there, Ambarella and Qualcomm or key suppliers of chips which might be being utilized in drones, and particularly autonomous drones.
Lauren Hein:
Is the FAA on board with this, and are we truly doing any drone supply within the US at this level?
Jeremie Capron:
This stays all experimental at this stage, particularly within the US the place now we have robust regulation of airspace. But we began to see some firms get hold of authorization to function autonomous drones past the visible line of sight, which implies that you do not want a pilot on the bottom with a line of sight onto the drone. And in order that’s a big milestone that we have simply crossed, and so that you’re in all probability going to see much more deployments going ahead.
Lauren Hein:
Very cool. All proper. Thank you. Jeremie. We’re going to come back again to you in a bit, however first, Lisa, let’s speak about how we’re getting into a world of well-connected care. We’re going to speak rather a lot concerning the web of issues on this part, so possibly additionally speak, outline the web of issues earlier than we actually get going, and speak about healthcare purposes for the IoT.
Lisa Chai:
Oh, undoubtedly. I feel primarily what you are actually seeing is that the healthcare trade is absolutely going by this main transformation pushed by rising prices, doctor burnout, lack of nurses, and sufferers undoubtedly demanding simply higher well being care. Who likes their healthcare course of and their plans? So we’re actually seeing developments proper now in healthcare know-how. And we expect that subsequent yr is known as a robust yr for areas like customized medication and areas like IoT that you simply talked about. So medical IOT, we’re tremendous bullish. We suppose proper now these medical gadgets which might be wearable and transportable are actually wanted. They’re non-invasive, and it offers real-time monitoring, and enhancing affected person expertise round entry to healthcare knowledge, and join them to healthcare suppliers. So we’re actually bullish as a know-how that has actually improved by higher cloud applied sciences and higher wifi connectivity and adoption of AI. AI is lastly right here in healthcare. So we now have gadgets you could put on, which might be wearable sensors, that monitor real-time well being care knowledge. So physicians can control you as you permit the hospital or the physician’s workplace.
Lauren Hein:
Very a lot listening to an extension of final yr’s theme that knowledge analytics and AI are going to drive efficiencies in well being care. It feels like that was fairly spot-on final yr. Talk to me a little bit bit about firms inside the well being tech index. I’m assuming there’s additionally some crossover with the unreal intelligence index, however firms which might be actually integral to this house, to this growing know-how.
Lisa Chai:
Yes. Within the healthcare know-how innovation technique, now we have two subsectors the place that actually seize this publicity. One space is in Medical Instruments. So these are firms that not simply present surgical instruments, but in addition the IoT gadgets. And then the opposite subsector could be Telehealth. And these two subsectors actually seize this bullish development that we’ll see in 2023 with an amazing quantity of progress behind it. Some of the index members which might be actually main this transformation are firms like Dexcom. Dexcom has developed a transmitter system that you simply put on that measures and sends real-time glucose knowledge wirelessly to the doctor. So you needn’t have this painful fingerprint that is very invasive. They’ve actually modified the sport.
Index members like iRhythm, Abbot, and Medtronic, are additionally firms which have actually led the revolution transformation round cardiac monitoring gadgets. So whether or not it is utilizing cardiac screens or sure kinds of pacemakers, you are undoubtedly seeing the cardiovascular market actually remodeling, the place it is non-invasive, they’re transportable, and also you’re in a position to talk together with your physicians, and so they might control you as you permit the hospital for surgical procedures. So these are actually game-changing in our minds, and we expect that HTEC technique actually captures many of those firms which might be actually remodeling healthcare.
Lauren Hein:
So I’m listening to that these appear to be proper now utilized in extra post-care aftercare affected person follow-up purposes. Is there a world the place we use extra medical IoT in diagnostics, or do you’ve any ideas about that?
Lisa Chai:
Yes, I feel you are going to see each of those wearables that provide you with biosensing applied sciences. So it might measure your heartbeat and alert and provide you with detection on whether or not you might be about to have some healthcare points. So you are undoubtedly seeing a world converging of that diagnostic giving that real-time alert. And then the AI actually enhancing and serving to the analytics aspect. And now as a result of the cloud has actually improved, and the wifi connectivity has actually improved, we’re in a position to get the information actually shortly and get the medical assist that you really want. So you bought the diagnostic aspect and clearly on the post-surgical aspect, and that is essential as a result of that actually permits you to have much less hospital keep, and you’re going to have a greater affected person end result. And additionally the insurers and healthcare firms are additionally going to see decrease bills for our sufferers and people.
Lauren Hein:
I simply need to verify additionally for everybody, the applied sciences for what you’ve got spoken about, medical IoT gadgets particularly, are usually not one thing we’re discovering on our smartphones at present, not one thing that is simply mass-produced at this level with the rings or a watch. They’re extra specialised healthcare gadgets.
Lisa Chai:
Yes, undoubtedly. I feel what you are going to see going ahead, we’ll see extra options and applied sciences and innovation round patches, wearable patches that might launch a sure kind of remedy, and that is going to hook up with possibly your smartwatch going ahead, or additionally together with your diagnostic answer. So we’ll have a world the place we’ll have all this knowledge that is going to tie in and combine it, and it will ship that real-time alert to your medical suppliers.
Lauren Hein:
And then lastly, once more, to tie it again to the HTEC Index, what subsector do you suppose this usually falls into? Maybe it is a few subsectors. We’ve talked about a few firms already particularly, however the place do you classify that inside well being tech?
Lisa Chai:
You would discover this within the Medical Instrument subsector, which is considered one of our greatest subsectors inside the HTEC technique. You would additionally see a few of these firms have the presence wanted for Telehealth. And Telehealth, we anticipate that subsector to develop over time as we see all this innovation occurring, as we get extra knowledge and analyze this knowledge, after which additionally have the ability to allow a few of these customized therapies and medication to the people and sufferers.
Lauren Hein:
And we’re seeing some bleed over into the AI index as properly.
Lisa Chai:
Yes, precisely. So inside the THNQ Index, now we have, as , an intensive quantity of AI scoring by way of purity of AI income. So many of those firms which have the healthcare publicity, they might not have the AI income publicity, however now we have a very good checklist proper now the place we’re actually being thorough, by way of what firms will make it to the index. But presently, now we have a number of firms which have healthcare publicity, firms like Butterfly, that is acquired robust AI revenues.
Lauren Hein:
Very good. Zeno, we’ll pivot to you, if that is okay. Let’s speak about breaking obstacles between the bodily and digital worlds. Augmented actuality in digital actuality. Maybe begin with some definitions there, after which let’s speak by why you suppose that is an thrilling theme for 2023.
Zeno Mercer:
Right. So clearly, to take a step again right here, it was a giant yr final yr when Meta rebranded Meta as a part of the metaverse. So I feel simply throw that on the market. And then pondering ahead, we have got augmented actuality and digital actuality. So augmented actuality could be an overlay know-how or visible display, there are a variety of several types of modalities this might happen, possibly in your dashboard, contact lenses or glasses, or a headset, however primarily it is augmenting actuality. It’s a digital overlay. It could possibly be audio, it could possibly be visible, however in the end it is an understanding, a digital understanding of what is occurring round you and the flexibility for that to supply insights which might be custom-made to you. Virtual actuality could be extra in a siloed sense of simply being in its personal digital world, so probably not having something to do with what’s round you.
And that might have many alternative purposes, however in the end it does not require as a lot, there’s a whole lot of processing to create these digital worlds, nevertheless it does not require actual time processing of the world round you. Right now you are seeing in all probability one of many greater Christmas vacation present objects could be virtuality headsets from Facebook or Meta and from Microsoft. And principally for gaming proper now. And so proper now, I feel lots of people consider AR/VR as simply the proxy for a brand new type of gaming, however there’s actually much more to it.
Lauren Hein:
Do you need to take a stab at defining the metaverse?
Zeno Mercer:
Sure. I feel it is a phrase that goes means past the simplified single phrase, metaverse, that we use. But primarily there are two totally different types of the metaverse. There is the augmented actuality metaverse, which truly incorporates and understands the true world, that is physics, chemistry, what merchandise and objects are and the classification of these objects, and the way they work together with the world. And then there’s the pure metaverse type that possibly Meta and Zuckerberg would think about, which is simply residing and interacting purely on this digital world, which I feel is horrifying to some those who we’ll be this matrix drone society. But if you concentrate on how we already talk and have developed this society. People have been glued the TVs and PCs, cellphones, and now we have got smartwatches. They’re actually simply methods of portray, speaking and sharing, and having totally different experiences, throughout totally different life phases and totally different types of leisure or studying.
So I feel if you happen to’re wanting ahead, beginning subsequent yr, you are actually going to begin to see extra information bulletins of know-how that will probably be approaching board. Even just lately, there have been rumors going round that Apple’s engaged on glasses, augmented actuality glasses, which we might in all probability guess could be a little bit bit higher than Alphabet’s Google glasses that had been launched, at this level, over a decade in the past now. So I feel it is actually not hit folks but that in a decade from now, folks won’t be carrying cell telephones anymore. We’re going to have a distinct tech modality that is actually introduced in by the infrastructure and software program and many alternative industries colliding to create a extra seamless expertise that higher integrates into our lives. The common grownup Google searches three to 5 occasions a day. That data could possibly be extra real-time and synced to your day by day life, and actually profit folks, each youngsters, and lecturers, in addition to the getting older inhabitants on easy methods to navigate the world and get assist in real-time. So we’re actually excited concerning the constructive advantages that may happen from the utilization and uptick of this house.
Lauren Hein:
So the traits report does a very nice job of laying out a whole lot of purposes for augmented and digital actuality applied sciences. It feels a little bit bit at present possibly we expect that it is all simply gaming, after which we think about ourselves residing in a completely digital world sooner or later, however there’s actually a spectrum. Do you need to speak about another purposes for this know-how which might be relevant extra at present?
Zeno Mercer:
Yeah, positive. So I feel one of many extra direct segues from gaming could be schooling. If you concentrate on how every individual learns, they go to a classroom, in the event that they’re fortunate, they get tutoring, in the event that they’re even luckier, they’ve entry to know-how and issues that may perceive how they study, what they know, the place they progress. And that is each from a testing aspect and a studying aspect. So I feel you may see throughout quite a few disciplines, arithmetic, physics, and historical past, there are going to be an increasing number of methods of personalizing this schooling to allow them to perceive how every particular person learns. This may increase by sports activities and different bodily studying corresponding to golf or what have you ever, the place it may well perceive the way you’re stroking. You’ve acquired, as we coated earlier about wearables, you may see wearables additionally apply to this augmented and digital actuality the place it may well actually provide you with visible and voice cues which might be automated that can assist you learn to do issues higher, possibly even cooking.
So I actually like schooling, studying, and training. There’s additionally collaboration. Right now we’re on this name, we’re all somewhere else, however technically we’re right here collectively proper now, and the viewers right here, even when they’re right here watching this later, they’re right here on this second. In the long run, this collaboration, every considered one of us is taking a look at possibly a TV display or a monitor and look right into a digicam. In the long run, it will be even higher. You’ll have extra customized dashboards, extra data will probably be popping up in your display that immediate you and provide you with visible cues. And so even working collectively, every individual will have the ability to work in their very own type, however every individual on the opposite aspect of it is going to even have their very own distinctive angle with out impacting the others’ expertise. So this customized buyer expertise will actually enhance organizational collaboration.
And then in the true world, going again into the augmented actuality aspect of issues, take into consideration simply navigating a metropolis or a brand new expertise. Maybe you pull out your cellphone and work out easy methods to go on Google Maps. In actuality, you may have this augmented actuality headset. You can do that now with Google Maps the place you maintain up your cellphone and it may well present you which ones course to go, however you are still not arms free. And I feel that the subsequent step is that this hands-free, seamless integration of know-how that’s designed that can assist you. Let’s hopefully keep away from the Meta world the place it is simply flooded with ads and it is truly helpful know-how that is supplying you with the data that you really want and want in real-time.
Lauren Hein:
So this explicit dialog feels very particular to suppose THNQ, the AI index. You can right me if I’m incorrect on that, however are there any explicit firms that you simply’re actually enthusiastic about?
Zeno Mercer:
Yeah, I feel I’ll shortly add one other space you talked about. This is certainly very AI-focused, AI is empowering the know-how to create, perceive, and implement this, the infrastructure and utility aspect. But there is a idea often called digital t win, which is basically recreating, and I alluded to this, nevertheless it’s recreating the bodily world and digital world. This might even be for the human physique. So suppose healthcare. So there are many purposes already presently being developed and deployed, corresponding to navigating surgical, the surgical house of understanding and doing pre-op, customized implants which might be made utilizing 3D era software program that matches the person. And so we’re already seeing actual impression from this, it simply hasn’t been referred to as essentially AR/VR, which is extra of how we might be utilizing it. So some firms that I’m actually enthusiastic about that now we have publicity to at ROBO could be, on the infrastructure aspect, none of this is able to be doable with out superior AI semiconductor chips.
So firms like Nvidia making AI chips. They’ve just lately been within the information and a part of international commerce wars about how highly effective these chips are as a result of they actually allow a quick understanding of deep studying and the way issues work. They’re sooner at crunching these numbers. They’re sooner at real-time processing, which is vital for these purposes. I feel it is also vital to notice that Nvidia is not only a {hardware} firm. They even have software program that they are actually diving into deeply. And for instance, they’ve just lately launched a 3D modeling platform, which primarily permits you to kind in textual content and it will provide you with 3D mesh modeling that you can truly implement within the video games or different experiences. So we’re actually seeing huge progress within the AI house and the way it can apply to the totally different subsets of society right here. So there’s semi, the subsequent step could be the networking and different infrastructure that goes into place, like safety.
So as an instance you’ve this AI, you’ve this augmented actuality, you’ve this. How does all of it join? How does it perceive what you are seeing? You must have sensors and real-time processing. So you’ve got acquired huge knowledge storage. If we’re going mainly from a textual content to picture to video to actual time 4D society within the digital, huge knowledge scalability is required and networking capabilities. So you’ve got acquired firms like Pure Storage and Arista Networks which might be actually highly effective performs right here. On the opposite aspect, you are going to have, pc imaginative and prescient for augmented actuality. So firms like Ambarella, which we have talked about in different traits. I feel that is one factor to focus on actual shortly is that whereas we’re speaking about these traits, we attempt to discover firms which might be already highly effective and market leaders and have nice know-how, however they’re truly in a position to play into totally different mega traits that might see huge trillion greenback, 5 trillion greenback markets that aren’t in existence at present, actually.
I needed to briefly spotlight that. So we have got now Network & Security. On the safety aspect, we even have cybersecurity. As an increasing number of of our interactions are digitized, because the companies that we work together with are automated, our identification and safety are essential. Back within the day, and I’m saying this virtually facetiously, you’ll go to a financial institution in individual, there’d be a safety guard there, and possibly there is a gold vault. Well, now it is extra about defending your digital identification to just remember to’re the individual accessing it by yourself accord. And that all through the journey of accessing and transmitting knowledge and cash that there is not any third celebration accessing this knowledge or manipulating it. And so the cybersecurity element with firms like CloudFlare, Gen Digital, and CrowdStrike, are essential and can turn out to be much more vital as this progresses. I feel it could even be remiss to not speak concerning the firms which have already been constructing within the 3D house for a while.
This could be firms like Dassault, Autodesk, and Adobe, who’re mainly pioneers and leaders within the digital 3D house. But I feel I’ll additionally briefly speak about, I’ve talked about Meta on this name, and we truly do not maintain Meta. They’re actually a really consumer-focused promoting firm, and that is the core of their income. We would somewhat maintain Microsoft as a metaverse play, and on the whole AI play, as a result of we consider they’re making a lot better strikes as an AI firm within the metaverse play with their partnerships with Open AI for enabling these newer applied sciences to really be within the arms of people and shoppers in a extra constructive, impactful means. So now we have Microsoft in our AI (THNQ) index. I feel that covers many of the subsectors right here, however I’ve to say that the majority of them in a roundabout way will come to play into this house in some unspecified time in the future in time.
Lauren Hein:
All proper. The final query I’ve for you, then we’ll transfer again to Jeremie and speak about reshoring. This explicit part of the traits report does have a whole lot of deal with enterprise capital investing in these startups during the last yr or actually two years possibly. Do you see our index constituents making acquisitions? Do you see firms truly IPOing into this house that could possibly be potential index constituents? Any type of traits you are looking forward to subsequent yr?
Zeno Mercer:
Yes. So in the end across the startups on this house and metaverses, 3D imaging modeling, all of it comes down to actually AI. AI is the element that is going to present these firms a leg up or benefit in growing and deploying these applied sciences. That is also wanting on the infrastructure performs, the connectivity to permit real-time connections between the gadgets that we’ll be carrying, and the backend cloud infrastructure. In phrases of acquisitions, we’re already seeing M&A within the house throughout safety, and throughout AI. There are a whole lot of startups which might be growing this house, however I feel folks additionally low cost, and possibly worry on the identical time, what firms like Nvidia are able to doing. With their current 3D modeling mesh improvement they only pushed out, which in all probability simply knocked a whole lot of startups out of the competitors by itself. So I feel it is vital to take a look at which firms even have actually defensible tech that will probably be acquired by these large tech firms as a result of they’ll look to quickly develop and keep share because the world switches over to this new paradigm.
Lauren Hein:
Which is why market and know-how management are key in our constituents’ funding course of. All proper, Jeremie, let’s speak about reshoring. Reshoring is the ultimate of our themes that we’re taking a look at for 2023. We’ve talked about semiconductors rather a lot right here at present, and we have truly had the CHIPS act handed in 2022. That will probably be reassuring a whole lot of semiconductor manufacturing. But speak usually concerning the reshoring development that you simply see for the subsequent yr.
Jeremie Capron:
Okay. Well look, I feel one of the vital vital turning factors within the international macro is concerning the finish of globalization, and actually a change in that development that has peaked during the last 5 years or so. And so began a number of years in the past with the business commerce warfare between the US and China. We had the pandemic. Now now we have geopolitics coming to the forefront, and so our view is that the development of reshoring goes to realize traction, and there is more and more clear proof of that. So you talked about the CHIPS Act, that is one, however a sequence of main US insurance policies enacted previously few months are actually pointing in the direction of that. And we expect that this development will create a significant tailwind for robotics and industrial automation. And it isn’t like automation wants a booster within the present atmosphere, as a result of when you concentrate on the issues we’re dealing with at present, the labor shortages, inflation, and rising prices throughout the board, the one clear reply to that from a enterprise chief’s perspective has been automating.
And so companies have began investing at a a lot sooner tempo, over the previous two years. In reality, demand for automation at present is at document highs and it is rising, and there is extra demand for robots and automation than suppliers can provide. But along with that, these macro adjustments round globalization or the top of it are going to have a vital impression. This is protectionism, deglobalization, we are able to name it French shoring or reshoring from China into the upper value places in Europe. In the US you’ve the getting older of the inhabitants, the restriction of migration, the impression of world local weather change, and cyber warfare, as Zeno simply touched on cyber safety. All of that’s actually resulting in a way more aware effort to fabricate regionally. And robotics automation is the enabler of that, the enabler of aggressive manufacturing. And once more, we’re already spending unprecedented quantities on that. In reality, within the second quarter of the yr, robotics orders in North America had been up 25%, yr on yr, and within the first quarter, they had been up 28%. So we’re off to a really, very robust yr in 22. We suppose that traits will proceed into the subsequent few years.
Lauren Hein:
Major firms benefiting from that development? And then the subsequent query I’m going to ask you, are any particular industries you actually see leaning into reshoring?
Jeremie Capron:
Yeah, so the beneficiaries are a few of the traditional suspects, just like the main robotics firms like Fanuc, or Yaskawa in Japan, ABB, Sweden, Switzerland. You have KUKA, additionally one of many prime gamers in industrial robots. But you even have the businesses that take part in automation management techniques like Rockwell Automation right here within the US, you’ve the pc imaginative and prescient gamers like Cognex. Collaborative robots, firms like Teradyne, that owns Universal Robot. That’s acquired the highest market share in collaborative robots that may work alongside people within the workshop. So these are a few of the apparent one, however there’s a sequence of secondary beneficiaries. You take into consideration the actuation, you concentrate on the management system, the software program layer that Zeno additionally talked about.
Lauren Hein:
Any particular industries that you simply see reshoring? The development actually accelerates within the close to time period, clearly, it feels like mainly all the things could possibly be impacted, however within the close to time period, possibly in 2023?
Jeremie Capron:
Yeah. So the obvious one to everyone seems to be semiconductors, as a result of we simply had the CHIPS Act handed, and that is earmarking 40, 50 billion {dollars} in the direction of home manufacturing of chips. And instantly following this announcement by the White House, we have seen main bulletins for Micron and Qualcomm, and Taiwan Semiconductor, all constructing new multi-billion greenback vegetation. And so all of the infrastructure goes to help this, is coming alongside as properly. Then we had the 2021 Infrastructure Act that is additionally allocating billions of {dollars} to high-tech infrastructure throughout the nation. There’s a significant push in the direction of electrical autos that we already talked about. And it is vital for traders to know that the manufacturing of electrical autos implies much more automation than conventional automobiles. And that is due to the depth of the usage of robotics to govern batteries, for instance, the entire electrical powertrain manufacturing requires extra robots and extra management techniques. So that is one other main tailwind right here.
Lauren Hein:
Yeah, feels like this excessive conviction theme goes to be heavy within the ROBO Index with some crossover once more, into possibly AI particularly.
Jeremie Capron:
Yes, I agree. ROBO has very direct publicity to all we simply talked about, from industrial automation to manage techniques, pc imaginative and prescient, actuation, however there are additionally going to be some AI parts to it. So you may discover some extent of publicity within the AI index as properly.
Lauren Hein:
Well, I need to break as a result of I need to open up the ground to questions. Also, I need to remind everybody listening that if you would like to obtain common updates from us, you may join our publication. But man, Jeremie, Zeno, Lisa, thanks for being right here. We’re going to let the viewers take it from right here.