By Jeff Reeves, MarketWatch
For better or worse, Google Glass is back.
Parent company Alphabet /zigman2/quotes/205453964/composite GOOG +0.40% /zigman2/quotes/202490156/composite GOOGL +0.35% has announced a new version of its augmented reality glasses, priced at $999 per headset and targeting businesses instead of consumers. Though the original version went over like a lead balloon (despite lofty predictions that the “smart glasses” market would grow to as much as $1 billion by 2020), Google has decided to revive this ambitious exploration of futuristic technology.
To be clear, Alphabet shareholders should pretty much ignore all this. The company’s bottom line is still driven by online advertising above everything else, with over $30 billion of its $37 billion first-quarter revenue derived from Google-related advertising.
But it’s still interesting to consider what our high-tech future might hold — and more importantly, whether there are smaller and more focused companies that are all-in on these trends.
Investing in so-called “future tech” stocks is naturally fraught with rampant speculation and lofty promises that may never live up to reality. Just look at the original Google Glass as proof. However, if you’re an ambitious investor who wants to look beyond entrenched tech giants, here are seven smaller innovators attempting to make a name for themselves in next-generation technology.
Augmented reality: Vuzix
The new Google Glass 2.0 looks a lot like the technology being pushed by Vuzix /zigman2/quotes/205105106/composite VUZI +3.47% , a start-up that’s more of a pure play on augmented reality technology. For instance, its M300 and Blade smart glasses stand out thanks to a clear enterprise bent, with the company marketing the devices for workplace uses like telemedicine, field surveys or even manufacturing quality control.
Vuzik is admittedly volatile and remains unprofitable, but those characteristics are hardly uncommon with innovative tech stocks. And with revenue set to double in fiscal 2019 and double again in 2020, this company seems to be on to something.
In the modern manufacturing sector, automation continues to advance at a brisk pace. The downside is fewer unskilled workers are needed. But as with so many high-tech trends the “creative destruction” of automation has given rise to well-paid computer engineers and much more efficient businesses.
One way investors can position themselves to profit from this trend is to focus on automation plays such as PTC /zigman2/quotes/202034776/composite PTC +0.47% , which provides computer-assisted design solutions to manufacturers and then helps them plug those digital blueprints into industrial robots. These 3-D design schematics are the building blocks for any kind of industrial automation — and PTC currently boasts clients in the energy, automotive, aerospace and life sciences sectors.
3-D visualization: Lumentum
Lumentum Holdings /zigman2/quotes/204419752/composite LITE -3.80% is a laser company that creates space-age tools for manufacturing as well as optical technology for telecommunications, scanning and illumination. It’s this optical division that is the most interesting in regards to “future tech,” since Lumentum has been researching a variety of applications for next-generation sensor lasers. This ranges from 3-D printing to motion controls akin to those used in automation as well as 3-D visualization and control devices for your tablet or smartphone.
Just as touch screens disrupted the old “flip phone” business, this may be the next step for mobile devices.
One note: Lumentum stock took a hit on reduced fiscal fourth-quarter guidance after the company discontinued shipments to embattled Chinese tech firm Huawei Technologies, but that could create a great opportunity to buy at a discount given the tremendous potential of this stock.