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3 Stocks Building the World of Tomorrow

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The future belongs to iRobot, Alphabet, and Visa.

It's always fun to look back at predictions made decades ago about what the future holds. Such predictions span the types of technology futurists thought we'd have at our disposal today.

While we're not making such bold prognostications about what precisely the future will bring us, we did ask three Motley Fool investors to identify three companies they believed were actively building the world we'll live in tomorrow. Read on to find out why iRobot (IRBT 1.80%), Alphabet (GOOG -0.27%) (GOOGL -0.21%), and Visa (V 1.16%) are at the cutting edge of an unknown future.

An iRobot Roomba

Image source: iRobot.

The robots are coming

Demitri Kalogeropoulos (iRobot): High-end manual vacuum cleaners are being steadily bumped off the market by an army of small but persistent robots. And the current leader in the space, iRobot, is reaping major benefits from the shift.

The consumer robotics specialist's revenue is up 26% so far in 2017. A big improvement in profitability, meanwhile, has allowed net income to more than double even as the company invests heavily in research and development and in its marketing plan. 

Investor worries over increased competition have pushed iRobot's stock far below the $100 mark that shares touched as recently as early September. And it's true that this young market might see major lead changes as it matures. However, iRobot has a dominant hold on the current installed base, with over 60% of the market under its control last year despite rising competition. 

To hold onto that lead, the company will need to keep pushing the industry forward through innovations over the coming years. But its deep portfolio of tech patents -- and strong track record for product development -- suggest it might be a key player in the smart home of the future that relies on robots for repetitive cleaning and maintenance tasks.

Self-driving car

Image source: Getty Images.

This company's bets could change the world

Keith Speights (Alphabet): Everyone knows about Alphabet's Google search engine. And everyone knows about the company's Android smartphone and tablet operating system, its Chrome browser, and its popular social media site YouTube. But not everyone is as familiar with Alphabet's "other bets" business segment. I think those bets could change what our future looks like.

There are eight primary businesses within the other bets segment. Right now, the Access unit, which includes Google Fiber, and Nest, which markets internet-connected home products, generate most of the revenue -- although it still only represents a fraction of Alphabet's total sales. 

Alphabet also has a couple of units focused on healthcare. Calico is attempting to conquer one of the biggest challenges ever by researching ways to thwart the effects of aging. Verily is working on several initiatives, including developing smart contact lenses that continuously monitor glucose levels and genetically engineered sterile mosquitoes to help stop the spread of disease-causing mosquitoes.

Waymo is a pioneer in the development of self-driving car technology. On a totally different transportation angle, Alphabet's X is working on drones that can deliver everything from consumer goods to emergency medicine.

And if all of this isn't enough, Alphabet has two business units focused on funding start-up companies hoping to change the world: CapitalG and GV. I like Alphabet stock as a long-term investment because the company is definitely thinking long term.

Man meditating in front of dollar signs

Image source: Getty Images.

A brave new world

Rich Duprey (Visa): A cashless world is coming, whether you like it or not, and Visa is at the forefront of the vanguard trying to make it a reality. Earlier this summer, it offered a bounty of $10,000 for every small business that accepts the challenge of declining cash and moving toward a card- and mobile-based payments system.

Called the Cashless Challenge, Visa already processes more payments than rivals Mastercard (MA 0.88%) and American Express (AXP 1.28%), 53% to 22% and 21%, respectively, meaning the payments processor views cash as its biggest obstacle to even greater dominance. Or, as Visa, put it, it is "declaring war on cash."

While there are very large risks associated with society becoming cashless, Visa also faces hurdles in its efforts to convince small businesses to give up cash, if only because of the swipe fees they're required to fork over payment processors like Visa and Mastercard. Yet there are some benefits, too, and according to the Federal Reserve, we're quickly moving in that direction anyway. The use of cash to purchase products has fallen from 40% in 2012 to 32% in 2015.

Visa is also making it easier for people to go cashless, such as enabling payments to be made through Fitbit's (FIT) Ionic smartwatch.

It's a brave new world we're being led toward, and though it's not necessarily one I would endorse being a part of, Visa is at the forefront, and for those who embrace such technological upheavals, it might be a stock you want to consider.

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Stocks Mentioned

Visa Inc. Stock Quote
Visa Inc.
$199.18 (1.16%) $2.29
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,174.75 (-0.21%) $-4.51
Mastercard Incorporated Stock Quote
Mastercard Incorporated
$318.24 (0.88%) $2.76
American Express Company Stock Quote
American Express Company
$140.40 (1.28%) $1.78
iRobot Stock Quote
$37.41 (1.80%) $0.66
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,181.62 (-0.27%) $-5.83
Fitbit, Inc. Stock Quote
Fitbit, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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