By Matt McCallMar 26, 2020
With so much going on in the world, it’s difficult to step outside of our day-to-day concerns and think about the future.
Cities, states, and whole countries are hunkering down to prevent the spread of the coronavirus to vulnerable populations. The toll on human life is tragic, while the economic impact has cut swift and deep.
But in thinking about the future, I’m sure we’ll come out of the crisis stronger, wiser, and better prepared for a market resurgence. Just like we’ve always done.
I’m also sure that the hypergrowth investing trends we track have grown even more essential to our economy and our very way of life.
If anything, this global health crisis will speed up the technological transformations I’ve been following for years. We simply can’t afford not to.
One of the hypergrowth sectors you should watch closely right now might surprise you.
A few years ago, 3D printing was hot. Using a computer to join material and create three-dimensional objects seemed transformative. The hype died down a bit, but this amazing technology is again proving its value in the coronavirus crisis.
Cristian Fracassi, founder and CEO of the Italian 3D printing start-up Isinnova, learned about a hospital in his home country that was struggling to deal with the outbreak. It was running out of a key component it needed to keep people alive, and he jumped into action.
Hospital staff desperately searched for more valves that connect respirators to oxygen masks. The problem was that the company that typically supplies them could not meet the surging demand.
In stepped Isinnova. The company printed off prototypes of the valves and sent them to the hospital for testing. Once they got word the valves worked, Isinnova “printed” 100 valves. Fracassi delivered them personally.
The American Hospital Association has said up to 960,000 people could need ventilators to treat severe cases of COVID-19. As you can imagine, having enough critical parts for these machines will be a big challenge.
3D printers can help fill in gaps in the supply chain.
Same with other crucial supplies healthcare workers need to treat their patients, like protective face masks. Officials from Massachusetts General Hospital in Boston are asking people with 3D printers to step in and make them for hospital staff.
Medical residents at the hospital also set up a competition to develop a mechanical ventilator within 90 days. Their goal is to manufacture the ventilators and distribute them as fast as possible with FDA approval.
Another company, Copper3D, created a 3D-printed mask similar to the N95 mask that’s in short supply. It released the design to the public… for free online.
Making parts for medical equipment needed to combat the coronavirus is just the start. The possibilities in healthcare are limitless.
Today, companies are 3D printing organs for the long list of people awaiting transplants. Burn victims could turn to 3D printed skin in lieu of extremely painful skin grafts. This process, also known as bioprinting, can fabricate everything from cells to biochemicals and ultimately to tissues and organs through precise, layer-by-layer manufacturing.
Cosmetics giant L’Oreal has been using 3D tech for more than 20 years and recently began bioprinting human skin that can be used to test products, reducing the use of animals in testing.
This so-called additive manufacturing — where the precise amount of material needed for the job is used, layer-by-layer, while leaving nothing left over in the process — is particularly suited to disrupt industries manufacturing customizable low-volume, high-value parts.
But there’s so much more possibility.
I fully expect we’ll see more and more 3D printing companies coming out of the woodwork to meet growing demand as the outbreak “stress tests” supply chains at home and abroad.
In fact, it’s already starting to happen…
After hitting a peak in 2014, the industry fell off many people’s radar. The dream of everyone making various gadgets on their own 3D printer at home never quite materialized.
But 3D printing hasn’t gone away. Far from it. And it’s time investors revisit the trend because 3D printing is changing the future of manufacturing… and anything and everything industrial.
For example, the 3D market in metals is barely a blip today. By 2030-2035, it could reach $10 billion – from virtually zero today. These 3D printed metals can be used in everything from aerospace and defense to the automotive industry as a lower-cost, faster-produced alternative.
McKinsey estimates that the overall 3D printing market could boom from $4 billion in 2015 to $490 billion in 2025. That’s 122X growth in a decade. My goal is to find investment themes and stocks that are poised to reach hypergrowth levels. It is not too often that the upside multiple is 122X.
Recently, Additive Manufacturing reported that companies sourcing manufacturing parts from China have been looking for alternatives since the tariff wars between it and the U.S. began in 2018. The coronavirus has only intensified the situation.
For instance, a survey by Gardner Intelligence and Composites World found that almost 60% of composite materials industry professionals faced some impact on procuring parts and materials only 12 weeks after the first reports of the coronavirus appeared in China.
Meanwhile, companies that rely on injection molds to manufacture various parts couldn’t get those molds out of China or other parts of Asia.
3D printing does not even require the tool needed to make injection molds, only the raw materials and the software. Plus, the manufacturing can be done onsite or near to where a part is needed, instead of having it sent across clogged shipping lanes.
The bottom line is that 3D printing is on the cusp of major growth that will be driven by necessity, rising demand, and advances in 3D scanning and imaging in the $12 trillion global manufacturing sector.
That’s why I expect this industry will help get us back on our feet and looking forward to the future.
Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt talks about the pandemic’s effect on the stock market and the economy as a whole. Some stocks are already starting to rally from the proposed stimulus packages. But is the worst over? Is it safe to put more money into the stock market in the midst of a pandemic?
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