Every share of stock on a public market is a piece of a living business, one which has customers, employees, and a break room hopefully full of delicious goodies.
Some of the world’s hottest stocks are those that are doing something different, something game changing. Let’s look at some of the most game changing companies on the public stock market.
- Tesla (TSLA) – Tesla is one of Wall Street’s favorite “story stocks,” a company with a promising future, but little in the way of current profitability. Tesla is practically reinventing the American automobile industry. It doesn’t hire unionized workers, it sells its product direct to the customer (skipping dealerships), and its cars are powered by electricity, not fossil fuels. Tesla is interesting to watch because it’s an infant in a sea of established players. The company’s future hinges on two innovations: a cheaper $30,000-40,000 electric sedan, and new battery technology that makes recharging your Tesla as easy as putting gas in the car. If Tesla can make an electric car affordable for the masses, it’s future is limitless, but no one knows if the technology is there to do it.
- Amazon (AMZN) – Jeff Bezos is high on my list of the world’s best CEOs. He’s lasted more than a decade convincing Wall Street that Amazon doesn’t need to make a profit. Amazon is in the business of destroying its competitors, seeking to beat everyone on price in every market. It is currently taking on the cloud companies with low-cost Amazon Web Services, besting brick and mortar retailers with low prices for its online retail business, taking on the cable companies with its video and TV show “rentals,” and hoping to disrupt the publishing business with its Kindle product. The challenge is moving Amazon from a company focused on market share to a company that can make a profit. Can Amazon keep its customers if it raises its prices? That’s the biggest question surrounding its future and its valuation.
- Apple (AAPL) – The growth stock of the 2000s is slowing quickly. The problem? Technology is just too good. Laptops no longer need replacing every few years, desktops can last a decade, and mobile phone upgrades just aren’t so necessary any more. Apple has to prove that it can continue to get people to open their wallets for each new device it brings to the market. For right now, it looks like the company’s fall might happen at the same pace of its rise to greatness. Is technology just too good that we no longer need to upgrade each year?
- Facebook (FB) – Friendster and MySpace are as dead as a doorknob, but Facebook lives on. Is this time different? For the first time, a major social network has attracted everyone from tech savvy 20-somethings to 80-year-old grandparents. Facebook claims more than a billion users, but can it keep its members interested in the social network for years to come? Facebook will also have to walk the fine line between large advertising profits and user privacy. If Facebook can hold on, it will reward investors with billions of dollars in advertising dollars. But if it loses its grip on its userbase, it may just join the social media graveyard of dead tech names.
These four companies are doing something different, but their futures are as uncertain as they come. Investors who watch these four names are sure to see a show – who knows what’s coming next.