Two decades ago, e-commerce and cloud computing were relatively novel concepts, but both industries have grown like wildfire. In fact, consumers will spend an estimated $4.9 trillion online this year, and 92{4224f0a76978c4d6828175c7edfc499fc862aa95a2f708cd5006c57745b2aaca} of businesses now rely on cloud services. From an investor’s perspective, both of those secular trends create tremendous opportunities.
Building on that idea, technologies like data analytics, artificial intelligence, and the metaverse are likely to play a prominent role over the next couple of decades, giving investors another chance to make bank. Innovative companies like Snowflake (NYSE: SNOW) and Unity Software (NYSE: U) are set to shape and benefit from such trends.
Here’s what you should know.
Image source: Getty Images.
1. Snowflake
The proliferation of connected devices, applications, and cloud services has contributed to data sprawl, a term that describes the ever-growing amount of information created by businesses. And because that data is often spread across different infrastructures, it’s often difficult to manage and make sense of all the information. That’s why Snowflake created the Data Cloud.
The Data Cloud makes it possible to integrate, analyze, and share data across an organization, creating a common repository that supports a number of different workloads. For instance, Snowflake can replace stand-alone data lakes (storage), data warehouses (analytics), and data science tools (ingestion), supporting all those use cases with a single platform. In turn, it helps business leaders make informed decisions and allows developers to build data-driven applications and powerful AI models.
Moreover, since those features are provided as a cloud service, clients don’t have to buy or maintain costly on-site hardware. That value proposition has helped Snowflake deliver truly impressive top-line growth.
|
Metric |
Q2 2021 (TTM) |
Q2 2022 (TTM) |
Change |
|---|---|---|---|
|
Revenue |
$402.7 million |
$851.2 million |
111{4224f0a76978c4d6828175c7edfc499fc862aa95a2f708cd5006c57745b2aaca} |
Data source: YCharts. TTM = trailing 12 months. Note: Q2 2022 ended July 31, 2021.
There is one more noteworthy aspect of Snowflake’s business. The Data Cloud also makes it possible to securely buy, sell, and share data, and that feature builds a network effect. As Snowflake adds new customers, more data will be loaded into the Data Cloud and made available for exchange. That creates value for customers in several ways, such as facilitating collaboration with partners or accelerating the development of AI models.
Here’s the bottom line: Snowflake simplifies big data and analytics, disrupting a market that management values at $90 billion. That’s how this company is shaping the future of technology.
2. Unity Software
Unity simplifies and accelerates content development. Its platform allows creators to build, run, and monetize 2D and 3D applications across more than 20 platforms. That includes everything from mobile devices and tablets to computers and game consoles. But Unity has also expanded beyond video games, as its software is gaining traction with architects, auto manufacturers, and filmmakers.
Unity breaks its portfolio into two segments. First, Create Solutions is the software engine, which allows developers to build and edit content. Second, Operate Solutions is a suite of products that help clients monetize games with digital ads and in-app purchases; it also includes analytics tools that drive player engagement. As a whole, the breadth of Unity’s portfolio has made it a leader in the gaming industry.
Case in point: 71{4224f0a76978c4d6828175c7edfc499fc862aa95a2f708cd5006c57745b2aaca} of the top 1,000 mobile games were made with Unity, and 94 of the top 100 game development studios are Unity customers. Such scale allows Unity to capture lots of valuable data, reinforcing its strong competitive position. Specifically, its platform logs 50 billion in-app events each day, making its machine learning models more intelligent over time. In turn, that translates into better ad targeting and a more personalized experience for each player.
|
Metric |
Q3 2020 (TTM) |
Q3 2021 (TTM) |
Change |
|---|---|---|---|
|
Revenue |
$710.2 million |
$1.0 billion |
43{4224f0a76978c4d6828175c7edfc499fc862aa95a2f708cd5006c57745b2aaca} |
Data source: YCharts. TTM = trailing 12 months.
The company still has plenty of disruptive potential in the gaming industry. Particularly, its platform is the leading development engine for augmented reality (AR) and virtual reality (VR) applications, both of which should become more popular in the years ahead. And as those technologies evolve, shareholders should expect Unity to play a key role in shaping the metaverse, too.
Unity could also revolutionize live sports. It recently released Unity Metacast, a real-time 3D sports platform that uses volumetric technology to deliver an interactive viewing experience. Put another way, Unity Metacast will make it possible to view sporting events from any angle.
Essentially, Unity streamlines content development, and its platform is relevant across several industries, some of which are in their nascent stages (e.g., AR, VR, and the metaverse). This shows how Unity Software is shaping the future of technology.
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Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Snowflake Inc. and Unity Software Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
