Investors looking for the most recent technology trends should look no further than the Gartner's Top Tech Trends 2016 list. The research firm has divided the top tech trends in business into several categories and we dove down into a few them to pull out some of the best ones for investors. They include: driverless cars, artificial intelligence, and virtual and augmented reality.
Driverless car technology
IHS Automotive estimates that 10% of all light vehicles sold by 2035 will by fully autonomous (as in, they can drive themselves around everywhere). The group also anticipates that driverless cars will become ubiquitous some time after 2050.
That may sound like a long way away, but there are plenty of ways for investors to benefit now. Alphabet's Google gets a lot of driverless car attention, but there are smaller companies making much more direct bets on the technology.
Israel-based Mobileye (NYSE:MBLY) makes chips and sensors that allow vehicles to see and understand their surroundings and are already being use by 90% of automakers.
The company is also developing mapping technology that will allow other driverless cars to share information about their surroundings with other autonomous vehicles, called Road Experience Management (REM). The REM system will help make drivelers cars a reality and will be used in a new drivelers partnership (link) with BMW and Intel.
There are big ways for investors to benefit from the brains behind autonomous systems as well. NXP Semiconductors (NASDAQ:NXPI) is already a leader in the automotive semiconductors space, with 14.5% market share, and is emerging as a key player in autonomous vehicles. The company debuted an off-the-shelf-driverless car system for automakers, called BlueBox earlier this year, that allows carmakers to essentially add all the hardware and software they need to make a car driverless.
The driverless car technology market is estimated to reach $42 billion by 2025, according to Boston Consulting Group, which leaves plenty of time and opportunity for investors to benefit.
Artificial intelligence and machine learning
Gartner said in its report that evolving technology offers "the potential to deliver autonomous and semiautonomous agents and things, including robots, autonomous vehicles, smart vision systems, virtual customer assistants, smart agents, and natural-language processing.
NVIDIA (NASDAQ:NVDA) is already making big gains in this machine learning space (a subset of artificial intelligence) with its graphics processing units (GPUs). The company's GPUs currently power machine learning systems for Google, Amazon, and Facebook (NASDAQ:FB), with amazing results.
Facebook uses NVIDIA's Tesla M40 GPU accelerators for its Big Sur machine learning computers, which allow the company to build deep neural networking computers that can learn on their own and perform up to 20 times faster than other neural networks.
The broader cognitive computing market (which includes both artificial intelligence and machine learning) will be worth $12.5 billion by 2019, according to Markets and Markets. And NVIDIA is already in a great position to benefit from the growth as Facebook, Google, and Amazon all look to the company for some of their artificial intelligence hardware needs.
Virtual and augmented reality
Gartner believes there will be a digital mesh between our physical world and the digital one, and part of it will come through virtual reality.
"Additional advances allow the virtual world to enter the real world through advanced UI and virtual reality models, as well as physical items created with 3D printers," Gartner says. "This blending of both worlds delivers new insights into the physical world, allowing us to understand it in greater detail, and interact with it in new and intelligent ways."
Facebook is already betting on virtual reality (VR) after its $2 billion purchase of Oculus in 2014. Oculus' Rift headset just went on sale a few months ago and Facebook CEO Mark Zuckerberg has said that virtual reality is a long-term goal (think 10 years) for the company.
But augmented reality (AR) may catch on faster than than VR does. The insanely popular new Pokemon Go game created by Niantic (which is partially owned by Nintendo) lets users catch AR Pokemon characters that look as if they're in the real wold on a user's smartphone. Even though Nintendo doesn't own Niantic outright, investors have pushed the stock up 25% in the days following the game's release.
Gaming is hardly the only application for AR though. Microsoft's (NASDAQ:MSFT) augmented reality Hololens glasses could change how companies train employees in the future. Japan Airlines is already using Hololens to help train its flight crew members with 3D scenarios as they prepare for their co-pilot status.
General Electric is testing augmented reality manuals that allow engineers to see how machinery parts are put together so they can fix industrial equipment more easily. GE CEO Jeffrey Immelt says that augmented reality could be worth up to $50 billion to industrial companies by allowing them to fix equipment right the first time.
Much for investors to look froward to
These aren't the only tech trends to watch, of course. But each has massive potential to transform how we interact with the world and be very lucrative for the companies that are investing in them.
Investors should remember some of the biggest returns will likely come from smaller companies making big plays on these tech trends -- but they'll also be the most volatile. For that reason, it'd be wise to invest in companies that are making a big bet on these new technologies, but that are also well diversified in other businesses as well.