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Introduction to investment in Technology. What options we have?

The technology sector has been one of the most productive sectors in which to invest during the last decades. In the US stock market, it is the largest segment of the stock market, above other typically stock market sectors such as financial or industrial. Without a doubt, the technological sector is synonymous with innovation, progress and the future. And one of the keys of the investment is that the benefits are always in the future.

Technology companies invest large amounts of money in research and development, but they also often have a recurring and solid source of income.

The importance of the technology sector

The advances achieved by the technology sector impact the rest of the economy, since its productivity increase affects everything. Lintrnetos rapid cycles of innovation and development make it a more risky sector in which to invest as companies tend to be more volatile. However, those that manage to survive often experience spectacular growth and produce great returns for their shareholders.

We can divide the technological sector into 4 main categories:

  • software
  • Hardware
  • Internet and networks
  • Semiconductors

Although not all technology companies can be easily classified in these sections, it is a useful way to think about the sector.

software

Computer programs make most things work in the modern world. From our cars and computers to the mobile devices we use every day. Unlike many times in the business world, where size and scale is a great competitive advantage, in the software world, small companies can be tremendously competitive for their specific knowledge and dynamism.

Cloud computing (cloud computing) that has developed in recent years enables companies to develop and provide software application services virtually. This step to work in the cloud has meant an important change in the software companies and in the way in which they develop their business model.

Among the largest listed in the world in this segment, we find Microsoft, SAP, Oracle, IBM or Symantec.

Hardware

Although today hardware does not have as much prestige as in past decades, it is not a subsector as decadent as many believe. Although many functions that were previously assigned to the hardware have been replaced by software, there is still a need to produce machines that can operate all the software that is developed.

Among the most modern and promising business lines in the hardware world, we can highlight the development of virtual reality, as well as the electronic elements that we can wear.

The world leaders in hardware are Apple and Samsung, although some Chinese companies like Xiaomi are opening hollow.

Internet and networks

The emergence of the internet revolutionized the world in many ways. Computer networks can be considered the most important advance in computing since the invention of the microchip. It has also been a revolution for the business world and the economy.

In general, there are two business models: B2C and B2B.

B2C ( business to consumer, translated into Spanish: from the business to the consumer), are those companies that focus their business on the final consumer. While B2B ( business to business. Translated: from business to business) are those companies that focus on offering their services to other companies. Large companies like Amazon, Facebook or Google dedicate time and resources to both.

Semiconductor

The semiconductor is a wide class of substances, in which the concentration of mobile charge carriers is much lower than the concentration of atoms, and may change under the influence of temperature. lighting or a relatively small number of impurities. These properties, as well as the increase in conductivity with increasing temperature, qualitatively distinguish P. from metals. The difference between polymers and dielectrics is conditional, the dielectrics are usually referred to as substances, beats resistance r to-ryh at room temperature

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