"Our meetings with many technology executives generally have pointed to the same handful of fundamental trends to watch in 2020, and this has helped to shape my outlook for the sector, regardless of market direction," says Nidhi Gupta, portfolio manager of Fidelity® Select Technology Portfolio (FSPTX).
Following are 3 long-term fundamental trends Gupta expects will still matter in 2020:
- Digital transformation and the shift to cloud computing seem to be in the mainstream, she says, noting that this trend is early in its multiyear cycle. Gupta says the move to the cloud has continued to benefit some well-known software companies, such as Microsoft (MSFT) and Salesforce.com (CRM).
- Consumer adoption of internet services has continued to grow as well, according to Gupta. She says this partly explains why she added to the fund's stakes in ride-sharing companies Uber Technologies (UBER) and Lyft (LYFT) late in 2019. She says it's early days for both, and she sees these firms as market leaders with revenue opportunities as adoption of ride-sharing services increases.
- Lastly, Gupta says artificial intelligence (AI) and machine learning continue to be a focus for companies seeking to disrupt their industries and create new experiences for customers. For this reason, the fund held a notable stake in Google parent Alphabet (GOOG), which she considers a key innovator in both AI and machine learning.
Learn more about this manager and her fund
Nidhi Gupta is portfolio manager of Fidelity® Select Technology Portfolio, which held securities mentioned in this article on January 31, 2020. As of this date, Microsoft composed 18.02% of fund assets; Salesforce.com composed 2.94% of fund assets; Uber Technologies composed 1.59% of fund assets; Lyft composed 0.65% of fund assets; and composed 1.48% of fund assets.
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