Tech Sector Breakdown

The technology sector is the category of stocks relating to the research, development, or distribution of technologically based goods and services.

Software and Services

Sub-IndustryDescription
Internet Software & ServicesCompanies that develop and market internet software or provide internet services, including online databases or interactive services. This also includes companies whose revenue mainly comes from online advertising.
IT Consulting & Other ServicesCompanies that provide IT services or systems integration services, including IT consulting and information management.
Data Processing & Outsourced ServicesCompanies that provide data processing or outsourcing services, including back-office automation services.
Application SoftwareCompanies that develop and produce software for business or consumer use, including enterprise applications and technical software. This excludes home entertainment and educational software.
Systems SoftwareCompanies that develop and produce database management software and systems.
Home Entertainment SoftwareCompanies that produce home entertainment software, such as video games, and educational software for consumer use.

Technology Hardware and Equipment

Sub-IndustryDescription
Communications EquipmentCompanies that produce communication equipment, including local area networks (LAN), routers, telephones, and switchboards. This excludes companies that make cell phones.
Technology Hardware, Storage & PeripheralsCompanies that produce cell phones, PCs, servers, electronic computer products and peripherals. This also includes motherboards, audio and video cards, monitors, keyboards and printers.
Electronic Equipment & InstrumentsCompanies that produce electronic equipment, including scanner/barcode products, lasers, point-of-sale machines/cash registers and security systems.
Electronic ComponentsCompanies that produce electronic components, including transformers, electronic capacitors and resistors, electronic coils and connection devices.
Electronic Manufacturing ServicesCompanies that produce electronic equipment as an Original Equipment Manufacturer (OEM). An OEM is a company that makes a part or component that is used in another company’s end product.
Technology DistributorsCompanies that distribute hardware and technology equipment to other companies, but do not produce this equipment or sell it to consumers. This includes companies that distribute communications equipment, computers and semiconductors.

Semiconductors and Semiconductor Equipment

Sub-IndustryDescription
Semiconductor EquipmentCompanies that produce semiconductor equipment, including manufacturing raw materials and creating equipment used in the solar power industry.
SemiconductorsCompanies that create semiconductors, including companies that make solar modules and cells.

Technology Growing Trends

  • Mobile Internet (5G): Interfaces, formats, sensors and apps will evolve as mobile computing devices dominate internet connectivity
  • Artificial Intelligence: Machine learning and user interfaces such as speech and gesture recognition technology will advance to increase productivity or eliminate some knowledge work altogether. 
  • Virtual and augmented reality: Virtual reality is a simulated experience that can be similar to or completely different from the real world. Applications of virtual reality include entertainment and education. Other distinct types of VR-style technology include augmented reality and mixed reality, sometimes referred to as extended reality or XR.
  • Cloud technology: Nearly all IT services and web apps could be delivered through the cloud with more enterprises using the public cloud as cyber security improves.
  • Internet of Things: The Internet of things describes the network of physical objects—“things”—that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the Internet.
  • Advanced robotics: Advances in artificial intelligence, machine vision, sensors, motors, hydraulics and materials will change the way products and services are delivered. 
  • Biometric technology: Authorization services for face, voice, eye, hand and signature identification. 
  • 3D Printing: 3D printing could enable unprecedented levels of mass customization and dramatically reduce the cost of supply chains
  • Genomics: Genetic engineering technology will grow with faster computer processing speeds. DNA sequencing technologies and advanced analytics will improve agricultural production, reduce reliance on fossil fuels and extend human life expectancy. 
  • Blockchain: Blockchain is a specific type of database. It differs from a typical database in the way it stores information; blockchains store data in blocks that are then chained together. 
  • Quantum computing: Quantum computing is essentially harnessing and exploiting the amazing laws of quantum mechanics to process information. A traditional computer uses long strings of “bits,” which encode either a zero or a one. A quantum computer, on the other hand, uses quantum bits, or qubits.
  • Gaming and eSports: Esports is a form of sport competition using video games. Esports often takes the form of organized, multiplayer video game competitions, particularly between professional players, individually or as teams. 
  • Edge computing: Edge computing is a distributed computing paradigm that brings computation and data storage closer to the location where it is needed, to improve response times and save bandwidth. 
  • Autonomous Vehicles: A self-driving car, also known as an autonomous vehicle, driverless car, or robo-car is a vehicle that is capable of sensing its environment and moving safely with little or no human input.
  • Cybersecurity: Cybersecurity is the practice of protecting systems, networks, and programs from digital attacks. These cyberattacks are usually aimed at accessing, changing, or destroying sensitive information; extorting money from users; or interrupting normal business processes.
  • Holograms: Real world recording of an interference pattern which uses diffraction to reproduce a 3D light field, resulting in an image which still has the depth, parallax, and other properties of the original scene. 
  • Hyperloop: The Hyperloop is a proposed mode of passenger and freight transportation, first used to describe an open-source vactrain design released by a joint team from Tesla and SpaceX.
  • Space Mining: Asteroid mining is the exploitation of raw materials from asteroids and other minor planets, including near-Earth objects. Hard rock minerals could theoretically be mined from an asteroid or a spent comet.
  • Future of Batteries: Replacement of the dependencies of lithium-ion batteries.

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Ricky Young

My belief is that financial freedom cannot be obtained by just a 9-to-5, but a combination of smart investing and passive income. This is my journey to achieve financial freedom.

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