A few days ago investment company ARK Invest published a pretty hefty tome offering investors its regular assessment of the future technologies that deliver the greatest potential. Entitled “Big Ideas” and covering no less than 153 pages, the report shines a light on a raft of mega-trends, from the electric car through molecular cancer diagnostics all the way to AI and bitcoin. In all, the experts analyse 14 disruptive technologies whose value could appreciate by 40% a year until 2030. According to ARK, this will in turn have an enormous influence on the capital markets. The fund boutique anticipates that these markets will account for the greater part of global stock market capitalisation by the end of the decade.
That ARK is not shy about optimistic expectations is evident from the forecast for Bitcoin. “Bitcoin’s long-term opportunity is strengthening,” says the latest Big Ideas issue. The management team reckons the price of the cryptocurrency will rise to USDmn 1.48 by 2030 in a bullish scenario. This corresponds to a compound annual growth rate (CAGR) of around 70%. Star investor and ARK founder Cathie Wood is somewhat more cautious in the case of a bear market, but still predicts a value of USD 258,500, which would be equivalent to a CAGR of 40%. One of the positives identified by Wood is that heavyweight institutions remained positive towards the asset class last year, when cryptos were suffering a significant correction. BlackRock, for instance, embarked on a partnership with Coinbase in June with the aim of giving institutional clients direct access to Bitcoin. Together they could pour trillions of dollars into the asset class over the next few years. In November 2022 Fidelity officially launched retail bitcoin and ether trading accounts enabling investors to trade and custody them on its platform.
The ARK strategists led by Yassine Elmandjra divide the 14 disruptive technologies into five overarching investment themes which they predict will undergo a rise in market value of 41% p.a. on average to reach over USDtn 200 by 2030 (see graph). Alongside the public blockchains behind cryptocurrencies, these include artificial intelligence, robotics, energy storage and the multiomics sequencing of digitalised biological data. One of the aims of the last of these is to identify cancer reliably at an early stage. Multiomics testing, which includes other circulating tumour signals such as DNA fragmentation patterns, is the key to success here. The addressable market for molecular diagnostics is valued at some USDbn 95 in the USA alone. The molecular cancer diagnostics segment, according to estimates, is set to jump by more than a fifth each year to pass USDbn 24 by 2030. The ARK team believes manufacturers should be able to increase the value of their companies at a comparable rate.
One of the overarching themes is artificial intelligence (AI). This technology also reaches into other disruptive innovation platforms such as robotics. Intelligent machines, say the ARK experts, could permanently alter both infrastructure and the way in which products are made and sold. Take autonomous logistics, for example: the projections are for earnings in this sector to rise from almost zero today to USDtn 1 to 2 by 2030. One of the key elements is the autonomous delivery of food and parcels. The big techs, such as Alphabet with its “Google Wing” and Amazon with “Prime Air”, are already on the starting blocks with their self-developed drone and robot delivery solutions. Food and parcel drones could bring in revenue in excess of USDbn 700 by 2030. “The adoption of artificial intelligence should transform every sector, impact every business, and catalyze every innovation platform,” says ARK’s short and sweet summary of the potential of AI.
Source: ARK Invest
