Changing Trends In Tech Sector - What To Watch Out For?
In May this year, Alphabet Inc. GOOG unveiled a "total reimagining of search" with the launch of AI mode – the chatbot-style search engine feature that would let users converse with the search engine; besides using AI agents to execute tasks on behalf of the user. This announcement follows the launch of features like AI overviews that make Google Search a ‘Zero Click' affair. In search engine parlance, zero click refers to those internet searches that do not require the user to click and visit a webpage in order to get their questions answered. With AI overviews answering questions right on the search result pages, there is little incentive for search users to actually click and visit webpages to find their answers. This presents an existential threat to organizations that have built their business on top of Google's search engine platform. Ironically, Google's steadfast adoption of AI into their search engine is itself propelled by the existential threat presented by the emerging dominance of new-age search engines like ChatGPT, and Perplexity. Earlier this year, educational resource company Chegg Inc. (CHGG) sued Google claiming that their AI Overviews was driving publishers out of business. Prior to this, a class action lawsuit was filed against Google in 2023 accusing the company of theft of American personal and creative data for AI modeling. The introduction of AI and the subsequent lawsuits have made the online economy quite volatile and in a constant state of flux. While this may be good for intraday or swing traders, long-term investors may continue to stay wary. However, this is not bad news. The AI economy is still in its infancy and this presents investors with profitable opportunities to take advantage of. In a recent report, Envato identified 8 emerging digital marketing trends that are likely to shape the future of the online economy. These trends offer us a glimpse of technology that is proliferating the internet landscape, and will potentially grow to be million dollar opportunities for investors. Identifying the companies that make these technologies possible and investing in them can be a profitable investment strategy. At the top of the list are businesses that build the infrastructure to enable the adoption of AI. This includes companies like NVIDIA Corporation (NVDA), Taiwan Semiconductor (TSM), Advanced Micro Devices Inc. (AMD) to mention a few. The rationale behind investing in these stocks is clear – AI is expected to continue growing for the next several years, which means that the hardware necessary to keep this momentum growing is continuing its upward trajectory too. Regardless of how hot NVDA may be at this point, it is expected to keep going up in the long term. These are companies that you invest in and do not touch for the next many years. If investing in one stock sounds risky, you could consider sector-specific ETFs focusing on AI hardware manufacturers. The Envato study predicts that videos will continue their upward trajectory through 2025 and beyond. Unlike text or even images, videos consume a lot of bandwidth, and their growth signals the continuation in the growth of networking and infrastructure providers. This would mean upward movement for stocks like Akamai Technologies (AKAM), and Cloudflare, Inc. (NET). There are of course other players in the industry that may benefit. For example, Amazon AWS, Microsoft Azure, and Google Cloud provide the cloud infrastructure necessary for video usage to grow. However, since these are part of bigger organizations, their fortunes are tied to multiple parameters and so it won't be prudent to make a more educated guess on the fortune of these stocks. Currently, the internet landscape is mostly made of unstructured data (text, images, and video). However, as we move towards Generative AI, and AI optimization, we are seeing a rise in structured data that enables content to be more organized and machine-readable. This is critical to drive search, automation, AI, and analytics. The rise in the use of structured data would also contribute towards an increase in the adoption of standards and formats, data wrangling, ETL tools, and databases. Stocks that would benefit from this adoption include Snowflake, Inc. (SNOW) which is a dominant player in data lakes and warehousing, Oracle Corp. (ORCL), a market leader in relational databases, MongoDB (MDB), Palantir (PLTR), and DataDog (DDOG). Analytics is a major gainer in the growth of structured data. Tableau, which is owned by Salesforce Inc. (CRM), and privately owned Qlik are expected to be winners here. Generative AI has unleashed a wave of hyper-personalization across the online landscape. Traditional Google search is being replaced by AI-driven search answers that bring in a great deal of personalization in the search answers. This technology is also being replicated across different spheres of the online economy with the help of AI agents. AI agents are online tools that make use of Artificial Intelligence (AI) and integration to do tasks on behalf of humans. For example, businesses can make use of AI agents to interact and engage with customers without the need for canned responses, or even regular chatbots. Such productivity enhancing software tools are driven by personalization engines operated by companies like Adobe Inc. (ADBE), while Microsoft, Amazon, and Google power the other parts of the infrastructure that drives this personalization. One of the key drivers of personalization is digital identity. Understanding who your user is, and tracking their online behavior is vital to building a personalization engine. There are several technological tools that enable this. One of the most popular tools in this space is Okta, Inc. (OKTA) that delivers identity and access management tools. LiveRamp, Inc. (RAMP) is another big player with a stake in digital identity – they are a data connectivity platform who help unify customer and prospect data. With growth in AI-driven personalization, these tools are likely to see increased growth. The world is in a very volatile state at the moment, and the movement towards greater AI adoption is being driven by some of the biggest corporations of our time. This could mean heavy lobbying in favor of keeping AI relatively less regulated. However, Generative AI brings with it concerns related to deepfakes and cybersecurity frauds. As such, the time is ripe for heavy regulation in terms of who gets access to such tools. While growth in AI-driven technologies is expected to continue unfettered, it is important to acknowledge the risks posed by regulations and how this could dampen this growth. Benzinga Rankings give you vital metrics on any stock – anytime. © 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Jul 10, 2025 | www.benzinga.com
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