Fiscal Cliff Averted! Business Spending to Boom?
The self-inflicted fiscal cliff crisis has been averted, and now businesses can get back to doing what they do best. Unfortunately, the political uncertainty damaged U.S. business confidence, which is currently hovering near its 52-week low. The good news is that the worst is behind us, increasing the chances that U.S. business confidence has hit bottom for the time being. When businesses get more confident, they are more likely to invest in new technology. Given that non-financial U.S. corporations are sitting on over $1.7 trillion of cash, this confidence boost has the potential to have a positive impact on the global economy.
One winner from today?
If you're looking for one company with a bright future that could benefit immensely from a better business spending environment, look no further than 3D Systems (NYS: DDD) . The company is up over 4% on heavy volume, indicating that short interest is likely waning, perhaps because of the perception that more businesses may invest in additive technology in the coming year. Competitor Stratasys (NAS: SSYS) is also benefiting from the news, having rallied 2% on the day.
Last week, Ford (NYS: F) announced how it used 3-D printing in its EcoBoost engine to develop parts and fully expects 3-D printers to become commonplace in the future. Thinking about 3-D printing as "cloud-based" manufacturing, it allows design and implementation teams to live in other areas of the world, inviting new levels of collaboration once not possible. Each location could have a 3-D printer on site and use digital designs that become prototyped right before their eyes. For Ford engineers, "there is nothing like have a tangible prototype, but it always has been time consuming and expensive to create." Companies such as 3D Systems and Stratasys design the printers that reduce time and expense throughout the prototyping process.
Since 1997, Boeing (NYS: BA) has been an early believer in 3-D printing. Military aircraft benefit from 3-D printed parts and have yet to see any failure. Boeing has used 3-D printing to produce more than 20,000 parts for military purposes, with the main intent being lighter weight. For every 1 kilogram an airplane's weight is reduced, it can translate into $1,300 in annual fuel savings.
New technologies are just one place where business confidence may show up. If businesses begin to release the reins on spending, it could have profound effects on the economy, both at home and abroad. In the context of 3-D printing, it could mean the end of the "made in China" era.
3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell, and receive a full year of analyst updates with the report. To start reading, simply click here now for instant access.
The article Fiscal Cliff Averted! Business Spending to Boom? originally appeared on Fool.com.Fool contributor Steve Heller owns shares of 3D Systems. The Motley Fool owns shares of 3D Systems, Ford, and Stratasys and has the following options: short JAN 2014 $55.00 calls on 3D Systems and short JAN 2014 $30.00 puts on 3D Systems. Motley Fool newsletter services recommend 3D Systems, Ford, and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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