Big Tech Has a Target on Its Back so Look at These Stocks Instead – InvestorPlace

About a month ago, a federal judge threw anantitrust suit against Facebook Inc. (NASDAQ:FB) out of court.

He ruled that the Federal Trade Commission and several states didnt provide enough evidence that Facebook has monopoly control over social media.

If you thought that was the end of Washingtons efforts to rein in Silicon Valley and Big Tech, however, think again.

In fact, the fire under the Big Five tech companies Facebook, Alphabet Inc. (NASDAQ:GOOG, NASDAQ:GOOGL), Amazon.com Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corp. (NASDAQ:MSFT) is heating up.

First off, that federal judge was more receptive to further investigate Facebooks acquisitions of Instagram and WhatsApp.

Then there is President Joe Biden, who is coming after Big Tech.

On July 9, he signed a far-reaching executive order seeking to crack down on alleged anti-competitive practices in the technology sector.

Capitalism without competition isnt capitalism, Biden said when signing the wide-reaching directive. Its exploitation.

Then earlier this week, we learned that President Bidenplans to appoint lawyer Jonathan Kanter as the head of the antitrust division at the Department of Justice (DOJ). Kanter has represented companies seeking to push antitrust enforcers into suing Google.

Congress and numerous U.S. states also are going after Big Tech. Earlier this month, for example, 36 states and D.C. filed a lawsuit against Google, alleging the Play store for Android violates antitrust laws.

According to an analysis by tech news site The Information, Apple, Amazon, Google, and Facebook globally are now facing 70 competition-related lawsuits or investigations. Thats up from 17 just two years ago.

Theyve got a target on their back.

Im not bringing up the hostile relationship between D.C. and Big Tech for political reasons. Rather, I want you to understand the forces shaping the market.

All of this is key to what Im going to discuss during my next big free event scheduled for Tuesday, July 27, at 7 p.m. Eastern (reserve your spot here).

So lets take a closer look

The dominance of Big Tech and the resulting antitrust efforts against them are side effects of the phenomenon that we call the Technochasm.

As money flows into these companies, not only do their shares soar but they become more dominant in the U.S. economy, society, and culture.

In the chart below, you can see the Technochasm blow apart.

Technology stocks, as represented by the Technology Select Sector SPDR ETF (NYSEARCA:XLK), have produced better than double the return of the S&P 500 and absolutely crushed other sectors, including energy and utilities.

Washingtons regulatory hammer isnt aimed at every tech company, of course, and it would be foolish to abandon the entire sector because a few companies are being scrutinized.

Whether you believe regulators and politicians keep capitalism honest or you think they stifle innovation, theres no denying that they are capable of nuanced thinking.

I dont mean that theyre geniuses or that I necessarily agree with them. Again, Im not here to talk politics.

Rather, I think regulators can discern the real differences between a company like Apple, which has a market cap of nearly $2.5 trillion and dominates several tech subsectors, and one of my top stocks for taking advantage of the Technochasm.

This company has a market cap of less than $500 million but it is growing fast within its tech niche. (You can find out more about this tiny tech innovator joining me for my next big event on July 27, which you can sign up for here.)

Though theyre both technology companies, theyre in different universes.

Its important to remember that the companies being targeted with antitrust action are different from other tech companies.

As the Biden administration brings further antitrust litigation or legislation against Big Tech, they will likely focus solely on the Big 5 and a few others.

All hope isnt lost for tech stocks in general.

And frankly, if you were considering investing in one company, hoping for a big payday, the Big 5 stocks shouldnt be at the top of your list anyway.

With those stocks, youre just trying to pick the one least likely to be targeted by regulators, and thats a guessing game Id rather avoid.

Instead, I recommend looking at the companies that fly below the radar the companies that innovate new technology rather than inconspicuously dominate the competition.

That small-cap favorite of mine, for example, could become a major beneficiary of the multiyear build-out of the one specific advancement that I will be going in-depth on during my big event on Tuesday (sign up to reserve your spot for that here).

And that makes it the perfect way to get on the right side of the Technochasm

In simple terms, this companys testing products can detect and pinpoint flaws in fiber-optic networks to the millimeter.

In other words, this companys products test the performance of crucial internet and communications components. After all, fiber-optic networks made the original internet infrastructure boom possible.

That makes this companys products fundamental to the Technochasm.

Last year, this company introduced its newest fiber-optic testing product and secured a large order almost immediately from a major defense contractor.

The product allows fast and accurate troubleshooting of fiber networks in the field. Late last year, that contractor ordered about 100 units for the purpose of testing the fiber-optic communications networks on some of its products.

Following on the heels of that order, other defense contractors have anted up, as have several new customers in the data center space.

These latter orders are particularly fascinating, as they indicate demand for the one specific advancement that Louis and I are going to talk about on Tuesday. Data centers are buying these units to test network latency.

Thanks to this one specific advancement, this companys performance testers are likely to attract robust, long-lived demand.

That growing demand should accelerate its revenue growth over the coming quarters and years.

The companys rapid growth and potential to accelerate that growth should deliver outsized gains to investors for many years running.

This is just one of the many small but promising stocks that Ive recommended to help investors get on the right side of the Technochasm.

And if you want to learn more about the hidden opportunities that can get you ready to take on this ongoing phenomenon, join me for my next big event with legendary investor Louis Navellier.

That event is scheduled for Tuesday, July 27, at 7 p.m. Eastern.

You can reserve your spot here.

Regards,

Eric Fry

P.S. NOW OPEN: Register for the 2021 Tech Supercycle Summit

Louis Navellier and Eric Fry just opened registration to their first-ever 2021 Tech Supercycle Summit. On Tuesday, July 27, at 7 p.m. ET, theyre going to reveal how you could make at least $100K over the next 12 months as a new supercycle gets underway.

Reserve your spot by clicking here.

NOTE:On the date of publication, Eric Fry did not own either directly or indirectly any positions in the securities mentioned in this article.

Eric Fry is anaward-winning stock pickerwith numerous 10-bagger calls in good markets AND bad. How? By finding potent global megatrends before they take off. In fact, Eric has recommended 41 different 1,000%+ stock market winners in his career. Plus, he beat 650 of the worlds most famous investors (including Bill Ackman and David Einhorn) in a contest. And today hes revealing his next potential 1,000% winnerfor free, right here.

View post:

Big Tech Has a Target on Its Back so Look at These Stocks Instead - InvestorPlace