- Morgan Stanley says new technologies are feeding into a surge in productivity that will help the economy for years.
- Strategist Adam Virgadamo says the pandemic will speed up that change, and investors don’t have to buy tech stocks to reap the rewards.
- He’s compiled a list of innovators that have been outperforming and look like they will continue to do based on their strategies and investments in their businesses.
- Visit Business Insider’s homepage for more stories.
New technology has permeated so many industries and transformed business. But when investors want long-term growth, they’re mostly buying the same mega-cap tech stocks.
That’s stayed true even as some experts have warned about the sky-high prices of those same stocks, raising the spectre of the dot-com bubble 20 years ago and the dominance of a handful of giant stocks that hit record levels.
Whether there’s a bubble or not, Adam Virgadamo, a US equity strategist at Morgan Stanley, says investors need to be aware of the alternatives. He writes that technology is contributing to growth and bolstering economic productivity, feeding a secular bull market that dates to 2011 and didn’t end with the coronavirus crash.
“We are in the early innings of a technology-driven, decade-long investment cycle centered on data and digitalization that allows businesses to gain insights and improve productivity,” Virgadamo wrote in a note to clients.
He adds that the pandemic and its after-effects are only going to speed up that shift as companies look for ways to save money.
“[The recession] is a wakeup call to accelerate this digital transformation as companies with a greater digital presence are showing more resiliency in the wake of the pandemic,” he wrote. “We see a clear mindset shift at the executive level from viewing technology as supporting the business to technology becoming the