GRA:CC - Better Tech Trend for Investors: AI or Graphene?
2023-09-22 13:15:00 ET
It’s common for investors to seek out the “next big thing” — i.e., a trend, technology, or product that’s gaining rapid traction, and business/stocks associated with it rapidly shoot upward. It’s a good way to benefit from several years’ or even a decade’s worth of growth in a single year or even a few months.
It happened with marijuana, e-commerce, and, to an extent, even the mining stocks focused on battery metals. Currently, the chief contender is artificial intelligence (AI), but it’s not the only tech/innovative trend worth considering. There is another that has yet to deliver on its promising potential.
Graphene
Graphene is one of the most versatile metals on earth, and even though it’s highly coveted for its properties, it hasn’t become mainstream yet.
The supply and demand cycles haven’t fully matured yet, but it’s already being used in a wide range of industries, including water filtration and a comprehensive range of electronics. It also improves the quality of Lithium-ion batteries, which makes it important for rapidly growing renewable energy as well.
Another promising breakthrough that included graphene is in hydrogen production. Graphene-based membranes can make hydrogen production cheaper and more efficient.
The upshot is that if graphene’s demand rises to a significant level, companies like NanoXplore ( TSX:GRA ) may experience powerful growth.
It’s a high-volume producer of graphene powder with low-cost production (powered by a patented process) as its primary selling point. It’s also among the largest global producers of graphene (by name-plate capacity). The company has 10 facilities in three countries.
The stock has already exhibited its potential for rapid growth in a favourable market. It grew over 400% in just over a year in the post-pandemic market. Considering its production capacity, it is likely to be among the top players to benefit from a rise in graphene’s global demand.
Artificial intelligence
AI is transforming the world in unprecedented ways, and we may be in the early years of a shift similar to the one the internet triggered in the world. Companies like Open Text ( TSX:OTEX ) are already leveraging AI to improve their tools/products. Even though it’s not a pure AI play, Open Text is a good way (especially on the TSX) to invest in AI because its business model/platform is well positioned to incorporate AI.
Open Text’s core business is information management, and since AI thrives on data/information, Open Text can leverage it to enhance the services and solutions it provides to its customers.
This strength is not reflected in the stock’s performance yet. However, Open Text has historically been a decent growth stock, and it’s one of the few dividend stocks in the tech sector, which makes it a good pick, even if we disregard the AI connection.
The stock returned over 215% to its investors in the last decade. It’s modest compared to some other tech stocks but highly sustainable, and if its AI connection pays off, the returns in the coming decade may be far more compelling.
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Foolish takeaway
Right now, AI seems to be the stronger of the two technological breakthroughs that can help uplift your portfolio. However, a significant shift in the graphene market may change these dynamics in the future. But it’s also important to realize that AI is currently in its infancy, and AI companies may experience unprecedented growth in the coming years.
The post Better Tech Trend for Investors: AI or Graphene? appeared first on The Motley Fool Canada .
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2023