Insights

Which companies will survive the 2020s?

By Paul Reid

21 February 2024

3149 which stocks

On 26 January 2024, the iconic tech giant Intel watched its stock (INTC) plummet 12.90% from $49.45 (USD) to $43.07 in less than two hours. The explanation for this crash was that Intel had delivered a disappointing sales outlook for its current quarter. The company lowered revenue expectations by 3.4% from $19.5 billion to $19.2 billion. 

In the following days, that revised revenue projection reduced Intel’s market cap by $56.28 billion. That’s all it took — changing its revenue projection.

Interestingly, rival NVIDIA Corp also revised revenue expectations down by 3.6%, more than Intel, yet NVDA stock has consistently stayed bullish throughout the first quarter. 

Some might say this is because NVIDIA’s AI is leading the tech world into a new era. Meanwhile, Intel is perhaps just treading water, busy making smaller chips that are still way bigger than IBM’s and microarchitecture that barely keeps up with its competitors. One seems to have a future, and the other does not.

In a nutshell, a long-term company outlook has made a conglomerate hyper-sensitive to short-term signals. This brings us to the question: which big names will weather the coming storms of the 2020s, and which will sink at the first sign of trouble?

Companies looking to the future

Going through the list of stocks, the below companies have products or services that align with current technological trends and consumer demands, indicating a potential for long-term growth:

Tesla Inc. (TSLA): With its focus on electric vehicles and renewable energy solutions, Tesla is well-positioned for growth in the green energy trend. Although Musk and Tesla are not the flavor of the month right now, Tesla’s technology is primed for survival, which means TSLA may well be a fantastic opportunity nobody’s counting on.

Advanced Micro Devices, Inc.(AMD): AMD has made remarkable strides in the CPU and GPU markets, challenging long-standing competitors with its high-performance processors. Its products power personal computing, gaming, and data centers, all areas that continue to see robust growth.

NVIDIA Corporation (NVDA): NVIDIA is renowned for its GPUs, which are essential not just in gaming but also in professional visualization, data centers, and AI. NVIDIA's technology is at the forefront of AI and deep learning, making it a pivotal player in these rapidly expanding fields.

Alphabet Inc. (GOOGL): Alphabet's broad portfolio, including AI, cloud computing, and autonomous vehicles, places it at the leading edge of technological innovation. It’s hard to imagine a world without Google, and the company may well outlive us all.

Amazon.com, Inc. (AMZN): Amazon's e-commerce platform, cloud services (AWS), and ventures into AI and logistics technology show strong growth potential. People and society want to shop online, but they need cloud services. No other company is in a place to threaten Amazon’s dominance, so expect AMZN to be on your 2030 trading watchlist.

Taiwan Semiconductor Manufacturing Company (TSMC): As the world's leading semiconductor foundry, TSMC is crucial for advanced chip production, benefiting from the global demand for electronics and computing power. A political cloud hangs over Taiwan, and the situation may change radically, but for now, TSMC has a solid place in the 2030s.

Companies that may face challenges

These companies may feel the pressure of market shifts, technological advancements, or the evolving nature of consumer preferences:

BlackBerry Ltd (BB): Once a leader in secure communications, BlackBerry has struggled to compete in the smartphone market and now seeks to reinvent itself in cybersecurity and software. It already reinvented itself once. If it doesn’t do so again, this 40-year-old company might not make it to the 2030s.

International Business Machines Corporation (IBM): Despite its efforts in cloud computing and AI, IBM faces stiff competition from more agile companies and needs to continue evolving to stay relevant. IBM is an iconic company, but some might say it’s already considered a company of the past generation.

Exxon Mobil Corporation (XOM): As the world shifts towards renewable energy, oil and gas companies like Exxon Mobil face long-term challenges adapting their business models. But switching from fossil fuels to renewables is a long process, so don’t expect anything shocking any time soon.

eBay Inc. (EBAY): Faced with intense competition from other e-commerce platforms and changing consumer shopping habits, eBay needs to innovate to retain its market position. If nothing changes, we may see the end of eBay, starting with some outsized reactions to releases.

AT&T Inc. (T): With the telecommunications industry rapidly changing and the advent of 5G, AT&T faces challenges in adapting to new technologies and competition from more focused service providers. AT&T is in the middle of a technology race, but it isn’t innovative. It will get left behind if it doesn’t venture into unfamiliar territory.

Conclusion

Assuming that a company has the right technology, service, or product to take them into the future strong is unreliable. Companies innovate, merge, or repurpose. Blackberry was once a respectable mobile phone brand, but now it’s a cybersecurity company.

The example of Intel stock crashing because of a weak report while other companies with worse data remain untouched reminds us that the market has an immeasurable amount of known influences and likely some very potent ones outside public view.

Nevertheless, that logic is worth adding to your experience and knowledge. The next time you hear about a disappointing revenue report, ask yourself if the company is forging a path through society or struggling to keep up with the times.


This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Author:

Paul Reid
Paul Reid

Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.