Sometimes, I think we all feel like Ron Wayne.
We all feel like we’ve lost out on the one investment that could have made us rich.
But most of us haven’t made a mistake that cost us $72 billion.
Ron Wayne sold his 10% share in Apple (NASDAQ: AAPL) for $500 in 1976. That share would now be worth about $72 billion today.
Of course, it’s possible that all of us would have sold out then because 41 years ago, Apple was nothing more than two bearded longhaired guys tinkering in a garage.
Now, Apple is one of the most valuable companies in the world.
When was the last time you went somewhere without your smartphone? I can’t remember. It’s the first thing I pick up in the morning and the last thing I put down before bed.
Apple has revolutionized tech with its sleek designs and advanced technology. And I'm sure we all wish that we’d invested back when Apple was going for $0.51 a share.
Though we can't go back in time and pick up Apple for pennies, there is still plenty of value and growth in these three old-school tech leaders...
1. Apple Inc. (NASDAQ: AAPL)
Apple may be one of the most valuable companies in the world, but that doesn’t mean it’s without flaws. The death of Steve Jobs in 2011 hurt the company as Jobs was often considered the creative genius behind the new tech. The Apple Watch had a disappointing release in 2015 with Network World writing:
The Apple Watch hasn’t been the kind of revolutionary product many people were hoping it would be. There have been lots of questions about the initial version’s usability and the limited number of viable use cases. And it hasn’t led to spikes in sales for other wearable devices.
Apple stock dropped over the past two years, hitting lows of $90.52 per share in May of last year. But Apple enthusiasts don’t need to fear — Apple isn’t going anywhere. Its stock jumped in 2017 and is currently sitting at $203.10 per share.
Apple is working on something new…
Something that could revolutionize the world we live in… again.
It’s called augmented reality or AR.
AR is different from virtual reality (VR) in that VR completely immerses users in a virtual world while AR is a reality where computer-generated images are added to users’ daily lives.
Apple CEO Tim Cook thinks it will become a part of our daily lives, as ingrained as eating three meals a day.
Apple is so dedicated to the tech that it has put a talented team together to work on AR. Bloomberg writes:
The group includes engineers who worked on the Oculus and HoloLens virtual reality headsets... digital-effects wizards from Hollywood… several small firms with knowledge of AR hardware, 3D gaming, and virtual reality software.
The company is reportedly starting production on AR eye-glasses as early as the end of 2019.
Tim Cook isn’t the only one who thinks Apple has a bright future. Warren Buffett just doubled his investment in Apple, making his shares worth over $18 billion. Buffett has notoriously shied away from tech stocks but, according to Bloomberg, he said: “Apple strikes me as having quite a sticky product and an enormously useful product to people that use it...” It’s possible that the AR advancements are part of his renewed interest and the company’s rising share prices.
2. Microsoft Corporation (NASDAQ: MSFT)
While it’s true that Microsoft’s products aren’t as flashy as Apple, there is a definite reason to invest in its stock. There isn’t a person alive who doesn’t know about the tech giant. MSFT was $0.10 a share in 1986 and has grown into a company with a market cap that's now a staggering $931.46 billion. MSFT does pretty much everything in the technology field from hardware and software for computers to various servers and products such as Office, Skype, and Outlook online.
Lately, Microsoft’s focus seems to be on the profitable field of cloud computing.
So, what is cloud computing?
Ever saved something in Google Drive on your home computer and accessed it on a work computer hours later? That document was saved in the cloud. According to PC Magazine: “In the simplest terms, cloud computing means storing and accessing data and programs over the internet instead of your computer's hard drive. The cloud is just a metaphor for the internet.”
Essentially, cloud computing allows you to access everything stored in it from any computer available. You can see why this has been hugely profitable. Your information is accessible no matter where you are as long as you have the internet. This is big — especially for global companies with bases all over the world. Instead of having to mail docs or programs, everything is available at once, no matter if you’re in New York City or Tokyo.
Research firm Gartner estimates that the market for cloud computing will be worth $383 billion by 2020. That’s a lot of money, so it’s easy to understand why Microsoft wants a piece of it.
Microsoft’s cloud computing system, Azure, is the second biggest — after Amazon’s — in the world. It just reported a second-quarter report that shows how revenue for Azure jumped 93% year over year. And it’s planning to make that bigger with its recent purchase. Wired writes:
Microsoft is acquiring Deis, an open-source software company that helps businesses build and operate massive online applications atop cloud services… The deal is yet another sign that Microsoft is a very different company than it was just three years ago… Microsoft was beginning to reimagine itself around those two very big ideas: open source software and cloud computing…. Microsoft has wholeheartedly embraced them both, fully realizing how much they mean to the future of technology.
With Microsoft placing itself in the position to tap into the wealth of cloud computing, you can be sure that it’s not done making an impact.
3. International Business Machines Corporation (NYSE: IBM)
Some think of IBM as the boring grandpa of the computer group. But they’re wrong. The stock has been in a slump over the past few years and is down to $139.28 a share after highs of $214.93 in 2013. But there’s no need to fear.
First, Warren Buffett is heavily invested in IBM. And as the second-richest man in the world, his stock picks don’t usually go awry. In 2011, he bought $10 billion worth of stock in IBM and has kept buying since. He says:
Incidentally, the company [IBM] laid it out extremely well. I don't think there's any company that's — that I can think of, big company, that's done a better job of laying out where they're going to go and then having gone there. They have laid out a road map… we went around to all of our companies to see how their IT departments functioned and why they made the decisions they made. And I just came away with a different view of the position that IBM holds within IT departments and why they hold it and the stickiness and a whole bunch of things.
In addition to Buffett’s trust in the company, IBM has a solid history of dividends — Buffett has already gained $1.7 billion. IBM has paid out dividends for more than 100 years, and it’s raised the value of its dividends for 21 years, which means that the company cares about its stockholders.
The most exciting thing that IBM has to offer is its foray into AI technology with an AI computer called Watson. You may remember Watson from Jeopardy. He beat two of the biggest winners of Jeopardy ever, Ken Jennings and Brad Rutter.
AI is an incredibly complicated but revolutionary part of our future. MarketsandMarkets estimates that AI will be worth $16.06 billion by 2020 and has an untold potential for security, health, and electronics over the next 50 years. Watson has already been tapped to work with Under Armour for health and fitness, General Motors for its communication systems, and perhaps most importantly, Apple. iOS users will be able to use Watson in-app, and app developers will be able to use it with the creation of their apps.
IBM is also handling customer relations using AI. Researchers at IBM India are working on AI chatbots with more personality, and empathy. The company's projected to address 85% of all customer service related interactions by next year.
With moves into the fields of AR, cloud computing, and AI, these three companies are sure to remain in the forefront of the tech field.