The Biggest Industrial Trend Tesla and Others Are Following

Technological advancements have made it more difficult to classify stocks as solely industrial -- take Tesla (TSLA 4.96%), for instance. Considering its innovation in and adoption of different technologies, would the electric vehicle pioneer be better classified as a tech stock? In this episode of "Motley Fool's Metal and Power Half-Hour" on Motley Fool Live, recorded on Jan. 25, Fool.com contributor John Bromels discusses how Tesla isn't the only company in this position.

John Bromels: One of the big trends in industrials, generally speaking, has been automation and has been the adoption of technology to the point that it's sometimes hard to figure out whether a certain stock should be classified as an industrial stock or a tech stock, because you're seeing companies merging the two. Just a great example that, of course, easily comes to mind, Tesla is that an industrial stock? Because what they do is make cars or is it a tech stock? Because it's really invested in self-driving, electric engines. No, he's not Lidar. [Elon] Musk doesn't want to use Lidar. The self-driving technology without Lidar, and of course, Tesla also has its toes in the water of solar and other clean energy things. Where do you put that? Do you put that as a car company and now many other car companies are developing similar technologies. Is that industrial? Is that tech? There's this merging, and we see this with many, many companies. For example, Generac (GNRC 1.22%), which for years they made backup generators and generators to generate electricity for your home, your business, backup generator in case of power outage, that kind of thing. And then all of a sudden, I want to think about two years ago, Generac announces that it's getting into the battery technology, power storage, and that they are introducing products that will allow you to take a Generac generator and attach it to your rooftop solar display or rooftop solar array and have power and be able to store that power so you can use it even when the sun isn't shining. Well, all of a sudden their stock takes a big jump. Well, they're still an industrial company. They still are making generators, but this area that has caused such a big share price boost for their stock is decidedly what we would consider to be a tech application. Here again, forklifts, solidly industrial. Warehouses also industrial. But we're looking at remote technology with things that are being deployed today in drone technology, and we're looking at remote telecommunication stuff. It's very interesting to me that the classifications that we have used for so long to describe what box a certain company falls into. This is an industrial company, it's in this sector. This is a car company, it is in that sector. There's a lot of blurring of the lines, I think, lately.