TECHNOLOGY INNOVATION AND DISRUPTION

Transcription

1 2018 Global Market Outlook Press Briefing TECHNOLOGY INNOVATION AND DISRUPTION Ken Allen Portfolio Manager November 14, 2017 FOR 2018 GLOBAL MARKET OUTLOOK PRESS BRIEFING. PROVIDED TO DESIGNATED MEMBERS OF THE PRESS ONLY, NOT FOR FURTHER DISTRIBUTION.

2 Technology Innovation and Disruption As of October 31, 2017 Technology innovation is driving an accelerated rate of change. Technology s biggest winners have captured unprecedented value. Technology disruption is challenging incumbents across industries. Key trends for 2018 include growing preeminence of e-commerce and cloud computing and proliferation of artificial intelligence. 2

3 CHANGE IS THE INVESTOR S ONLY CERTAINTY. THOMAS ROWE PRICE, JR. TECHNOLOGICAL CHANGE IS EXPONENTIAL SO WE WON T EXPERIENCE 100 YEARS OF PROGRESS IN THE 21ST CENTURY IT WILL BE MORE LIKE 20,000 YEARS OF PROGRESS. RAY KURZWEIL, THE AGE OF SPIRITUAL MACHINES (1999) 3

4 Technology Adoption Continues to Accelerate The trademarks displayed are the property of their respective owners. T. Rowe Price is not endorsed, sponsored, or otherwise authorized by or affiliated with any of the trademark owners represented by trademark owners herein. Source: Visualcapitialist.com. 4

5 Technology Has Produced Massive Winners... As of October 31, 2017 REVENUE TODAY VS Revenue in U.S.$ Billions FACEBOOK MICROSOFT ALPHABET AMAZON APPLE $216 $90 $90 $136 $28 $58 $24 $25 $43 $1 Fiscal 2009 Revenue Most Recent Fiscal Year Revenue Source: FactSet, data analysis by T. Rowe Price. 5

6 ...Who Have Captured Unprecedented Value As of October 31, 2017 MARKET CAP IN US$ BILLIONS ExxonMobil $ Apple $ Microsoft $ Alphabet $ China Construction Bank $ Microsoft $ Wal-Mart $ Amazon $ HSBC Holdings $ Facebook $ China Mobile $ Alibaba $ Nestle $ Berkshire Hathaway $ BP $ Tencent $ Procter & Gamble $ Johnson & Johnson $ Apple $ JPMorgan Chase $357 Largest (by cap) as of October 31, 2009 and October 31, Source: FactSet, data analysis by T. Rowe Price. 6

7 Index Level Amazon Value Creation As of October 31, 2017 INDEXED PERFORMANCE AMZN S&P 500 Traditional Retailers Infrastructure Technology Incumbents +262% % +11% -44% Past performance cannot guarantee future results. Source: FactSet, data analysis by T. Rowe Price. Traditional Retailers is an equal-weighted basket of: JCPenney (JCP), Nordstrom (JWN), Gamestop, Corp. (GME), Macy s Inc. (M), Target Corp. (TGT), Kohl s Corp. (KSS), Dick s Sporting Goods, Inc. (DKS), Foot Locker (FL), Sears Holding Corp. (SHLD), Barnes and Noble (BKS). Tech Incumbents is an equal-weighted basket of: IBM, NetApp, Inc. (NTAP), Cisco Systems (CSCO), Vmware Inc. (VMW), Oracle Corp. (ORCL), Teradata Corp. (TDC), F5 Networks, Inc. (FFIV), and Lenovo Group Ltd. (Lenovo). 7

8 Index Level Facebook and Alphabet Value Creation As of October 31, 2017 INDEXED PERFORMANCE 300 Facebook Alphabet/Google S&P 500 Traditional Media +140% % % -42% Past performance cannot guarantee future results. Source: FactSet, data analysis by T. Rowe Price. Traditional Media is an equal-weighted basket of: Viacom Inc. (VIAB), CBS Corporation (CBS), Discovery Communications, Inc. (DISCA), Twenty-First Century Fox (FOXA), News Corp. (NWSA), AMC Entertainment Holdings (AMC). 8

9 2018: Key Strengthening Trends E-commerce Online Advertising Cloud Computing Digitization Sharing Economy Big Data Analytics 9

10 2018: Key Emerging Trends Artificial Intelligence Internet of Things Augmented Reality Autonomous Vehicles Intelligent Assistants 5G Wireless 10

11 Technology Innovation and Disruption in 2018 Technology innovation will continue to drive a rapid rate of change. Technology will continue to create value while also disrupting numerous industries. Being on the right side of change will continue to provide opportunity. 11

12 Important Information For 2018 Global Market Outlook Press Briefing. Provided to designated members of the press only, not for further distribution. This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, and prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested. The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction. Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price. The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request. USA Issued in the USA by T. Rowe Price Associates, Inc., and T. Rowe Price Investment Services, Inc., 100 East Pratt Street, Baltimore, MD Unless otherwise stated, this material is issued outside of USA by T. Rowe Price International Ltd, 60 Queen Victoria Street, London EC4N 4TZ which is authorized and regulated by the UK Financial Conduct Authority. T. ROWE PRICE, INVEST WITH CONFIDENCE and the Bighorn Sheep design are, collectively and/or apart, trademarks or registered trademarks of T. Rowe Price Group, Inc. All rights reserved

13 THANK YOU