10 Best Growing Industries To Invest in for 2024
Fast-growing industries often lead to profitable stock trades. The faster a company can grow earnings, the more investors are willing to pay for it, propping up stock values. While some industries, particularly in the technology world, are seemingly always on the list of the fastest growing, others rotate in and out of the top spots.
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What’s important to remember is that when it comes to investing, valuation also plays an important role. While fast-growing companies are generally valued above the average stock, there can be times when enthusiasm is too high, making even rapidly growing stocks a poor value.
In other words, some of these companies are high-risk, high-reward, and not the safest investments to own. Take the time to research the real potential earnings growth of a company or industry versus its valuation before you decide to take the plunge — and always stick to stocks that remain within your risk tolerance.
What Is an Emerging Industry?
As the market evolves and certain technologies start becoming obsolete, new companies and organizations with innovative products and services tend to appear. When a small group of businesses in the same sector are centered around a specific new concept or technology in an early development stage they form what we know as an emerging industry. Investing in emerging industries could potentially give your portfolio both diversification and growth.
This is not to say that all fast-growing industries are necessarily emerging. Some industries that have been around for years or even decades may not truly be “emerging” any more but may either be undergoing a temporary growth spurt or may simply be constantly evolving, changing, and growing rapidly. Whatever the reason, these are the types of companies that can give you some extra bang for your buck when it comes to your investments.
Top 12 Emerging Industries To Invest in for 2024
For those looking to diversify your portfolio in 2024, here are the top 12 fast-growing industries to keep an eye on:
1. Cloud Computing
The remote working trend has gained massive popularity in the past decade — however, the global circumstances brought by the pandemic have expedited the transition into it since 2020. As remote workers and companies need ways to facilitate their daily operations, cloud computing technologies have come to the rescue.
Even though the pandemic is now in the rear mirror, the cloud computing explosion has taken hold and continued to grow. The worldwide cloud computing market size is expected to reach $1.44 trillion by 2029, compounding at an annual rate of 16.4%. Some of the best stocks to invest in cloud computing are:
Salesforce
Amazon
Adobe
Snowflake
Alphabet
Oracle
2. Biotechnology
Biotechnology has always been a cutting-edge industry. While individual companies often go boom and bust in this field, winners can post big numbers for investors. Biotechnology companies are continually researching and developing world-changing products and will always be in demand. The global biotechnology market size is forecasted to reach $3.88 trillion by 2030, representing a CAGR of 13.96%. Some of the best companies to invest in within this fast-growing sector are:
Eli Lilly
Novavax
Regeneron Pharmaceuticals
Vertex Pharmaceuticals
Novo Nordisk
3. Data Analytics
This emerging industry has become the core of business success across all sectors. Companies are now prioritizing data gathering and research as a vital business operation that serves as a guiding axis for building solid strategies in product development, customer satisfaction and more. In fact, the global data analytics industry is expected to grow to $280.69 billion by 2029, putting their CAGR at 23.63%. Some of the best stocks to buy in data analytics this year are:
Snowflake
Splunk
Elastic NV
Alteryx
Datadog
4. Artificial Intelligence
To the delight of many sci-fi enthusiasts, AI is everywhere these days. This industry has placed many sectors under a new light by allowing them to automate many of their essential tasks and providing them with state-of-the-art technologies. No wonder why the global AI market size is expected to reach a compound annual growth rate of 31.22% by 2029. Some of the stocks you could add to your AI repertoire are:
C3.ai, Inc.
Nvidia
Microsoft
Alphabet
5. Real Estate
These are uncommon times, and the current level of high interest rates and home unaffordability has left many wondering if investing in real estate is worth it in 2024. However, with inflation coming under control, it does appear the Federal Reserve will indeed be lowering interest rates by the end of 2024 and into 2025, perhaps bringing lower mortgage rates that can make real estate more accessible.
This could end up pushing both residential and commercial real estate prices even higher, as more buyers jump into a lower-rate market. Those who want to jump into the market in advance may consider a real estate investment trust, relying on managers to pick the choicest properties that can benefit from both capital appreciation and income. Here are some popular options in the sector:
Kilroy Realty
Park Hotels & Resorts
Boston Properties
Ventas
Vanguard Real Estate ETF
6. Renewable Energy
The renewable energy industry is a volatile, politically driven field. It seems like every time the industry takes two steps forward, it’s pulled one step back. Electric vehicles, for example, exploded in popularity in the early 2020s, but now dealers are finding it hard to clear some of them off their lots.
The changing political environment can also be a headwind for the industry, as various parties fight for their own agendas. However, there’s no denying the industry has seen explosive growth, and it seems likely to become entrenched into American society at some point – although it’s hard to state when that day will arrive. For now, renewable energy is projected to grow at a CAGR of 7.09% over the next five years, but those estimates may vary considerably. Here are some renewable energy stocks to keep on your radar.
FirstSolar
NextEra Energy
Brookfield Renewable Corp.
Tesla
7. Pharmaceuticals
The pandemic shone a bright light on how important pharmaceutical companies are to everyone’s daily life and health, but the truth is, this industry has always played an important role in society, even when it worked mostly behind the scenes. There will always be a demand for cutting-edge technology that saves, extends and improves the quality of lives. In turn, the pharmaceutical industry will continue to innovate to those ends. The Pharmaceutical Manufacturing Market is expected to reach $967.12 billion in size by 2029, representing a CAGR of 12.14%. Here are some of the biggest names in the industry:
Johnson & Johnson
Bristol Myers Squibb
AbbVie
8. Internet of Things
Nowadays, consumers want smart everything, and that’s where the IoT industry comes in. Its heavy integration in the electronic market has massively increased this sector’s chances of growth. The global market for IoT solutions is expected to reach $2.37 trillion by 2029, marking a compound annual growth rate of 15.12%. Some promising stocks in this emerging industry are:
Cisco Systems
Dexcom
Qualcomm
Amazon
9. Information Security
With the increasing demand for IoT systems, cloud computing and other internet-dependent tools, the rise of the cybersecurity industry is imminent. The cybersecurity market size is forecasted to reach $314.28 billion by 2029, recording a compound annual growth rate of 11.44%. The top cybersecurity stocks to buy this year are:
CrowdStrike Holdings
A10 Networks
Okta
Palo Alto Networks
Akamai Technologies
10. Sustainable Industries
Businesses and individuals are increasingly showing their commitment to leaving a cleaner and fairer world for the new generations. As the consumer reflects on the impact of the products and services they purchase, they’re beginning to look for eco-friendly, socially responsible brands. That’s why businesses that focus on environmental and social causes are rising in popularity.
The worldwide green technology and sustainability market size is expected to grow from just $28.6 billion in 2024 to a whopping $134.9 billion by 2030, representing a compound annual growth rate of 29.5%. The top ESG — which stands for environmental, social and governance stocks — to buy this year are:
Nvidia
W. W. Grainger
Applied Materials
Levi Strauss
Accenture
Target
11. Content Intelligence
More and more people are getting news and other information from their devices these days, meaning content intelligence is booming. As the internet continues to grow, and the digital transformation of the world takes control of everyone’s daily lives, an enormous volume of data is being produced. The total Content Intelligence market, estimated at $1.55 billion in 2024, is expected to grow to $5.62 billion over the next five years, for a CAGR of 29.38%. Although many of the leaders in the Content Intelligence market are still private, here are some you can invest in:
Adobe
OpenText Corporation
Meta Platforms
Alphabet
12. Online Gambling
While not everyone’s cup of tea, there’s no denying that the online gambling world is exploding. The compulsion to generate short-term gains is one of the reasons for the growth in this market, although convenience and entertainment also play a big role. Whatever the attraction, investors can capitalize on the rising earnings that well-managed companies in this industry generate. The U.S. online gambling market is expected to grow from $5.12 billion in 2024 to $10.98 billion in 2029, a compound annual growth rate of 16.52%.Top companies and funds in this industry include:
Flutter
DraftKings
Roundhill Sport Betting & iGaming ETF
Daniela Rivera-Herrera contributed to the reporting for this article.
Data is accurate as of May 17, 2024, and is subject to change.
This article originally appeared on GOBankingRates.com: 10 Best Growing Industries To Invest in for 2024
