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Could US tech stocks be eclipsed by a new wave of emerging market (EM) challengers? We think that’s a key question for the coming months and years as China and India pick up the pace in their adoption of new technologies.
We note, for example, that China has some 40% of the world’s artificial intelligence (AI) scientists as well as five of the 10 most highly valued tech ‘unicorns’.*
Global internet usage and e-commerce statistics paint a similar picture. In 2015, for example, India displaced the US as the second largest internet user population. India is also building a global lead both in its number of smartphone users and the number of e-commerce sales transacted on mobile phones.
We think this highlights an important point. For all their status as the darlings of Wall Street, the current crop of US tech leviathans face a serious challenge. As EMs create their own centres of expertise, we believe investors may be well served by looking beyond the narrow confines of Silicon Valley to a wider world of global innovation.
Drew Guff – Siguler Guff, a BNY Mellon company
* Unicorns’ are defined as unlisted tech companies with a valuation above US$1bn.