The technological sector is still in the spotlight of investors and that is one reason why there is a general pessimism among investors that this is another bubble. Of course whether something is a bubble or not we can never know until the day the market decides. But what we can do is understand exactly what is happening in the technological sector.
For example, Apple recently announced results for the first quarter of 2021 and recorded a 21% increase in sales revenue compared to the corresponding quarter of 2020 and an increase of 72% compared to the fourth quarter of 2020. To report another company, Amazon recorded an increase in revenue by 38% in 2020 compared to 2019.
So if from the above example it is understood that companies of this size can have an average annual growth rate of their revenues between 20% -40%, then it is not realistic to talk about an unreasonable increase in valuations.
But this is only a small part of the overall analysis we need to do. For example, Apple has already announced its entry into the electric car industry.
Electric car industry is expected to reach $ 802.9 billion by 2027, which is an average annual increase of 22%. If we assume that Apple, as a leading company and with a huge brand, acquires at least 5% of this market, then we should expect almost $ 40 billion extra to the company's revenue. After all, Apple is already reportedly investing in the construction of a factory which in 2024 will be able to produce at least 100,000 electric cars.
All the above simply confirms all our estimates that the technological sector will continue to surprise us in the coming years and investors have the opportunity, with the right choices, to have returns that will be above average. It is no coincidence that the technology industry is the one with the biggest weight in the XSpot Growth portfolio.