How to Invest in The Two Hottest Tech Trends I've Ever Seen

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Last week, I told you the "Mobile Wave" was one of the biggest profit opportunities that I'm following for you.

I even shared a potential "double-your-money" profit play that the "experts" seem to have missed.

But as good as the "Mobile Wave" story might sound, it's not the only hot sector that can substantially bolster your net worth.

Today I'm going to tell you about two other high-tech trends that I'm following – and each one represents the double-your-money profit opportunities that I'm always hunting for.

And I'll give you a stock to watch with each one …

How to Invest in the Top Tech Trends

The trends that I'm talking about are "Big Data" and "Cloud Computing" and each is an example of the "unstoppable trends" that I search out in my Five Rules of High-Tech Wealth that I've been talking to you about over the last few weeks.

Let's look at each of these two powerful developments.

And we'll start with Big Data, a term that refers to technologies that make massive data sets – once inaccessible – available for analysis and use in decision-making.

According to a recent study by IBM, we now create 2.5 quintillion bytes of data each day.

But it's what we do with all that data that truly matters.

And today Big Data has reached critical mass thanks to a confluence of forces: Ultra-fast computers and sophisticated mathematical formulas called algorithms are making it possible to use the data to solve some of our more complex challenges.

We're talking about better storm warnings, tracking climate change, reducing crime, lowering energy use and solving the riddle of complex and lethal diseases just to name a few.

With so many avenues of discovery available to us, the Big Data trend is the definition of high growth and big profits. Analysts say that 90% of the data we work with was just created in the last two years alone. Forecasts call for this sector to grow tenfold to reach $50 billion between now and 2016.

Investment opportunities here range from hardware and software. Thus, I see lots of profit opportunities in this field.
That's why I'm glad to tell you about Silicon Graphics International (Nasdaq: SGI). You may have heard of this small-cap tech leader in the past because it did the computer work needed to create the dinosaurs for the hit movie Jurassic Park.

Today, the company has gone through a restructuring that allowed it to focus heavily on Big Data tech. SGI sells ultra-fast computers and networking gear organizations need to crunch through massive amounts of data.

SGI's high-performance products power such applications as design for aircraft and autos, modeling of new drugs, weather simulation and data analysis.

Over the last three years, SGI has averaged a growth rate of 31%. Just last quarter, it showed a 64% improvement in earnings per share (EPS). Not bad for a company with a $498 million market cap that trades at around $14 a share.

How to Invest in "Cloud Computing"

Now then, if they don't know about it directly, a lot of investors are already making use of the third big trend I want to tell you about.

It's called Cloud Computing. It's a euphemism for "hosted services," in which the software you use or the data you're saving sits out on the Internet, instead of on the hard drive of your computer.

And it's becoming more of a mainstream technology.

If you back up your computer data with an online service, or store your digital photos online, then you have already started using "the cloud" as an integral part of your life.

But backing up data is just the start …

The Web hasn't just opened up global computer networks to Google searches, Amazon purchases and YouTube videos. It's a game-changer that allows companies, government agencies and other organizations to save on their computer costs across the board.

They do so by tapping the power of the Cloud, which means using either the Web or off-site data centers hosted by third parties. These moves allow organizations to avoid the cost of building and running their own server farms, which are really just big rooms filled with computer servers.

Tapping into the cloud also allows corporate IT departments to boost worker productivity without buying and running their own computer servers and related gear.

That's why cloud computing is a huge tech trend. Consider that the respected research firm Forrester predicts cloud computing is going to increase from about $41 billion in 2011 to $241 billion in 2020. That's an increase of roughly 487% in just about a decade.

Now you know why tiny Datalink Corp. (NasdaqGG: DTLK) is investing so heavily in the cloud. This is the kind of small-cap firm I tell tech investors to try and find. The firm still has plenty of room to grow sales, earnings and its stock price.

Datalink greatly simplifies the movement to the cloud, a fact that appeals to risk-averse information technology managers. The firm's On Demand Labs lets potential buyers design and test a cloud before they make any major investments.

Customers receive a highly detailed analysis of the conversion that includes lots of data about what to expect when they switch to the cloud. That simple message is helping it pick up lots of new clients.

With a market cap of about $210 million, the stock trades at about $11 a share. It has a forward Price/Earnings (P/E) ratio of just 9. The PEG ratio that measures growth prospects come in at just .5. Anything below 1 shows a high potential for growth.

In this year's first quarter, earnings were off by more than 40% due to the costs associated with its expansion. But I'm not worried because I'm looking at its long-term track record.

Over the past three years, Datalink has grown its earnings per share by 68%. It also has a three-years-sales-growth rate of 38% and achieved record revenue in this year's first quarter.

Both Datalink and SGI are very fast growers. At their present rates of growth, their share prices could double in less than three years.

And that's what it's all about here at Strategic Tech Investor — finding stocks with the power to double our money as we consistently build our net worth on the road to financial freedom.

If we achieve that goal, then we've done the job we set out to do.

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About the Author

Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.

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