The future of technology is already here as rapidly growing tech companies disrupt how business is conducted and people interact with the world around them.
While a lot of companies proclaim they're at the forefront of the change we're witnessing and the technology we'll be using tomorrow, the three tech stocks below are truly building the future. Let's see how they're transforming their businesses, their industries, and the way we will live.
Global electrical vehicle purchases are forecast to grow fivefold to 10 million by 2025, and with major carmakers like Ford and GM promising to have most or all of their fleets electrified by the middle of the next decade -- not to mention fully EV manufacturers such as Tesla ramping up production -- the need for the charging infrastructure ChargePoint Holdings (CHPT 2.04%) is deploying will be critical to future travel.
ChargePoint just went public earlier this year through a merger with a special purpose acquisition company (SPAC). But it has been in operation since 2007 and has a leading presence in North America and Europe, though the U.S. is its primary market with 89% of its revenue generated here. It plans on further global expansion and is in the process of acquiring German charge station software provider, has.to.be eMobility.
Revenue is growing rapidly, up 61% last quarter from the year-ago period, but with networked charging revenue 91% higher. It's an impressive growth story, and though competition in the space is fierce, it's the only one of its major rivals that seems to be spending on future innovation.
ChargePoint spent $69.5 million on research and development in 2020, while EVgo and Blink Charging show no R&D expenditures at all. ChargePoint seems to be driving headlong into the future today.
Square (SQ -0.51%) made a name for itself by developing point-of-sale devices for merchants, a business that still has tremendous growth prospects because of the ecosystem Square has created through the addition of analytics and even small business loans. But arguably the future could well be decided by the build out of Square's peer-to-peer payment platform Cash App.
Square has enhanced the system to be more than just a simple way to transfer money among friends or pay for goods and services -- users are now able to invest through Cash App.
Earlier this year during the meme stock trading frenzy, Cash App was one of the biggest beneficiaries of the Robinhood brokerage limiting trading of stocks like AMC Entertainment and GameStop. So angry were investors at being blocked from trading that they opened up new accounts elsewhere, primarily on Cash App.
Both channels are generating enormous profits for Square. In the second quarter, its seller segment grew gross profits 85% to $585 million while Cash App delivered 94% growth to $546 million.
With its acquisition of Tidal, a global music and entertainment platform, Square is positioned to build out another revenue and profit stream for the future.
Upstart Holdings (UPST 4.80%) is another tech stock that's putting a new spin on the familiar for the next generation of users. The fintech is updating the online loan application process with artificial intelligence to make lending opportunities more accessible to greater numbers of people at lower cost.
Most of Upstart's lending has been in unsecured personal loans, a field that could represent significant risk of default. By running the applications through its AI decision-making process, they are measured against over 1,000 data points. Upstart is also beginning to use the system to make auto loans, and wants to get into student loans, credit cards, mortgages, and home equity lines of credit.
That could offer significant rewards for Upstart because it says the rigorous vetting process it puts applications through lowers loss rates for lenders. That seems to be borne out by the loans it's made. While the fair value of its loans increased over 5% last quarter, expected credit losses only rose a little more than 3%.
Overall, revenue rocketed 1,018% higher last quarter from the year-ago period, with fee revenue jumping 1,300% on loan originations through its bank partners, rising more than 1,600% year over year.
AI, machine learning, and deep learning are revolutionizing the way decision-making is made. Upstart Holdings is applying that to the loan generation process, which looks to be the way all such decisions will be made in the future.