Cyber ​​Security, Artificial Intelligence, and Cloud Computing: Check Out 3 Tech Stocks to Buy Now

Hello and welcome to Estrada do Futuro, where we talk weekly about the intersection between investments and Technique.

Last week, I wrote about 3 tech company sub-sectors you should avoid right now, even with a long-term investment horizon.

In a quick recap, I suggested avoiding financial technology (especially digital banks and payment companies) and marketplaces (E-Commerce service aggregators such as Uber and its peers) and finally companies whose mission is to save the world.

Especially with regards to the last category, believe me … There are still a lot of them, offering such benefits as “slipper day” and a ball pool in the office.

Today, I want to take a completely opposite approach and talk about three subsections in technology where I think there are huge long-term opportunities.

Of course, in each section, I will also mention what my favorite actions are.

cyber security

The war between Ukraine and Russia highlighted what we have known for some time: 21st century wars will be more (or more) intense in the virtual world than in the real world.

Most people have a Hollywood view of hacking and cyber security. That cliched image of the man in the hoodie, in the bedroom, alone, at three in the morning, breaks through one of the largest banks in the world.

According to Okta (Nasdaq: OKTA), the most relevant company in the market for login security, more than 90% of hacks happen through credential leaks.

In other words, in most cases there is no super-complex algorithm that circumvents security systems; Only one distracted employee clicked the wrong link, or entered their details on a fake page that mimics a site they use often.

A tragicomedy about security in the world of technology

A 2016 study by the University of Illinois, USA, illustrates the tragic comedy of this situation.

Researchers left 300 flash drives in a campus parking lot. The idea was to measure the number of flash drives that would be connected to computers, among the flash drives.

The result is to lose faith in humanity: 48% of USB disks were connected to computers and there was an open file!

Any “malware” (or viruses) installed in these applications can contaminate the device immediately.

People are putting their data, access and passwords at risk because of a flash drive they have no idea what it contains!

Also, there is no point in using this face: I know you use the same password in many applications…

Hackers know too, and this only increases the potential payoff if they get a leak from you.

Not only do we need tools that protect our data (and protect us from ourselves, as mentioned above), but a new generation of cybersecurity companies, capable of not just remediating, but anticipating, harm.

The new generation is called “cloud security”

New generation companies are completely different times when you open your antivirus and leave the scan running for hours, only to find that it won’t be able to solve anything.

Modern cyber security companies are doing flow Of all your computer activity to the cloud, compare your patterns to those of millions of other devices and apps on your network, and discover in real time how new malware is tackled.

Among these new companies, my favorite is Crowdstrike, which is traded overseas ribbon “CRWD” – and on B3 via BDR “C2RW34”.

Artificial intelligence

This is something everyone talks about, but only half a dozen companies actually do it (Crowdstrike is one of them).

Artificial intelligence (AI in the future) could be many different things, but the most general and applicable concept today is manual process automation, where an algorithm learns to repeat repetitive operations.

Artificial intelligence is increasingly present in the advertising sector. Meta (Facebook) has grabbed a lot of headlines lately due to its massive investment in construction data centers Focus on artificial intelligence.

Meta is about to change its structure engine of advertising, moving away from traditional “similar” audience models and towards a probability model.

More “future” uses for this technology lie on stakes such as self-driving vehicles, drones, and even the development of software Without human interaction.

For example, Waymo, Google’s self-driving car, operates in many mid-sized US cities, such as Phoenix, where you can call a self-driving car for a ride, such as Uber.

Which tech giant is behind all this?

Behind all these different uses is a certain company, Nvidia!

Known for its line of RTX graphics processors (GPU) for gaming, Nvidia is the undisputed market leader in AI GPUs.

For example, when I compare Nvidia’s revenue distribution in 2013 to 2021, I see that the “data center” (AI GPUs) segmentation has gone from 4.8% to 39.4%.

In absolute numbers, the jump is from $200 million in GPUs in 2013 to over $10.6 billion in 2021!

Nvidia’s position has been solidified by more than 10 years of investments in a suite of software and AI applications complementing its GPUs.

In my opinion, Nvidia shares are trading offshore under ribbon “NVDA” and B3 via BDR “NVDC34” is the best way to familiarize yourself with this.

cloud infrastructure

The Amazon AWS story is relatively new. I think in 2008 Netflix started migrating to the cloud, but only in 2016 did it complete the migration.

For many years this was the “us against the world” story.

For years, AWS has focused on launching more and more products into its infrastructure.

Basically all big projects open source From the market, like MongoDB, Elastic, Confluent, and many others, they got a version on AWS similar to open software, but hosted in the cloud.

The logic was very simple: Amazon was on a mission to offer all possible services on its platforms and earn recurring revenue from them.

Most of these services, once in production, offer a highly anti-breakage structure: they are cheap to maintain in the event of failure (low or no dependent), and although they require an ongoing investment in case of success, economics It’s often great, as customers consume more and more of a product as they become more digital.

Obviously, with so many well-qualified engineers, AWS has gone beyond copying and contributed to these ecosystems, in addition to launching many of its own products.

Amazon is in direct conflict with the tech industry

In the “Risks” section of every tech prospectus, there was a reference to Amazon. Something like “My friend, these guys might go into the industry and destroy my product.”

An army of young Davis is horrified at the size of this Goliath.

Some episodes became popular. MongoDB, which is a database open sourceNASDAQ-listed and valued at more than $26 billion, it was the first company to change its terms of use in 2018, creating barriers for AWS (as well as Azure and Google Cloud) to monetize its products without proper involvement.

Soon after that, Elastic’s role was the biggest engine A search engine for corporate services in the market and also a product open source. When you’re looking for a movie on Netflix or a stay on AirBnb, Elastic does the work of finding it.

Elastic has accused AWS for years of embezzling its site softwarebuilt its own AWS version and was making significant financial gains while the community sucked its thumbs.

From enemy to partner

Then things started to change. AWS has got it right, one by one, with the big companies players for the ecosystem open source.

If I understand it correctly, it is a little. Increasingly, they turned from enemies into partners. This is just the tip of the iceberg.

Recently, in Snowflake’s “Investor Day”, the flagship data warehouse In the market, there was a whole session dedicated to exploring contracts sold in partnership with AWS.

Snowflake is one of the fastest growing companies in the software industry and they’ve gone through a similar story: Amazon has a competing product (“redshift”), and they’ve gone from enemies into close friends.

More than 50% of this year’s projected Snowflake guidance will come from contracts signed through AWS in partnership.

In many cases, AWS has proactively reached out to its customers to deliver not their own solutions, but “best of all” solutions to their partners.

In many releases, earnings calls, and investor events, I see company after company extolling how AWS will be one of the great growth channels in the coming years.

If you told me this in 2018, I wouldn’t believe it.

Increasingly, it (such as Microsoft Azure) is focusing on winning customers with infrastructure and storage, and designing solutions for customers that include a number of independent partners (who often return the favor).

Undoubtedly, Amazon’s stock is another must-see in its technology portfolio.

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