In today’s Money Morning…‘next level’ battery tech…Big Tech’s tentacles either touch new industries or get chopped off…here’s where to invest in 2021…and more…
Warren Buffett still holds around $156 billion in Apple Inc [NASDAQ:AAPL] shares.
He held more shares until around November, where he pivoted to major drug companies like Merck and Pfizer (the company that won the vaccine race).
So, will the legendary investor be pleased with Apple’s efforts to enter the automotive industry?
A lot depends on whether Apple’s Project Titan can actually get off the ground.
The automotive arm of the tech behemoth has struggled to find its feet since its inception in 2014.
Key to its success though, could be ‘next level’ battery tech.
These would use a:
‘Unique “monocell” design that bulks up the individual cells in the battery and frees up space inside the battery pack by eliminating pouches and modules that hold battery materials…Apple’s design means that more active material can be packed inside the battery, giving the car a potentially longer range. Apple is also examining a chemistry for the battery called LFP, or lithium iron phosphate, the person said, which is inherently less likely to overheat and is thus safer than other types of lithium-ion batteries.’
If you’d told someone you were into batteries 15 years ago, you would be labelled a nerd.
These days, you would be called a savvy investor.
Now the proposed ‘iCar’ most likely won’t be around until 2025 at the earliest, and the new battery tech could be Project Titan’s lasting legacy — not the car itself.
Here’s the bigger picture though…
That is, Big Tech is no longer comfortable with the confines of the business models that turned them into the biggest companies in the world.
Big Tech’s tentacles either touch new industries or get chopped off
There’s Alphabet Inc’s Waymo, with robo-taxis that carry people in a driverless ride-hailing service.
Then there’s Amazon Care — the healthcare platform that may be expanded beyond just their employees.
Meanwhile, Microsoft has quickly shifted gears to crush Slack’s business model with their Teams application.
The point is, Big Tech’s tentacles are expanding into new industries, all backed by a heap of cash.
It’s a legitimate question to ask, if these are no longer tech companies but conglomerates?
This kind of expansion may be checked though, with antitrust murmurs becoming tangible cases in a collection of US states.
The tentacles could be chopped off if these cases advance to their natural conclusion.
Which is why Big Tech is trying to install acolytes in various parts of the new Biden administration (via Reuters):
‘The Biden transition team has already stacked its agency review teams with more tech executives than tech critics. It has also added to its staff several officials from Big Tech companies, which emerged as top donors to the campaign.
‘Now, executives and employees at tech companies such as Alphabet Inc-owned Google, Amazon.com Inc, Facebook Inc, Microsoft Corp are pushing to place candidates in senior roles at government agencies, according to four sources with knowledge of the matter.
‘The agencies many of these executives are aiming for include the U.S. Commerce Department, Office of the United States Trade Representative, the Office of Information & Regulatory Affairs — a key agency under the White House Office of Management & Budget which drafts policies impacting the tech industry, the State Department and the Department of Defense, according to the sources.’
However, regardless of what happens on the antitrust front, the cash will remain and it has to go somewhere.
Here’s where to invest in 2021 in light of Big Tech cash…
For regular Money Morning readers this may come as little surprise.
AI into healthcare strikes me as the primary recipient of Big Tech cash.
Which is why we’ve got the ‘Health Revolution’ theme in our stable of stocks in Exponential Stock Investor.
But as I told readers of Exponential Stock Investor just recently, there are at least two other industries out there that could benefit from a break-up of Big Tech or its further expansion.
I’m thinking about AI therapy/telehealth and a big data collision with agriculture.
Imagine if you could do Google-style data analytics on food supply chains, or even bring robotics to farms?
It’s already happening, with Brazilian pig farms now using robotic feeding machines that play classical music to the animals.
You’ve seen the iCar from Apple, but have you seen the iPork machine?
It’s wacky and weird, but the future is here.
You can invest in it or sit on the sidelines while the world passes you by.
For Money Morning
Lachlann is also the Editorial Analyst at Exponential Stock Investor, a stock tipping newsletter that hunts for promising small-cap stocks. For information on how to subscribe and see what Lachy’s telling subscribers right now, please click here.