Navigating the Future: The 5 Most Promising Industries for Investment Over the Next 5 Years

Smart investors put their money in tomorrow’s growth stocks, not today’s. The closer you can get to the first floor on the next unicorn, like SpaceX, or market megatrend, like AI, the higher the return you can ensure.

“Someone's sitting in the shade today because someone planted a tree
a long time ago.” — Warren Buffett

At this time, many private equity investors are contemplating where to invest, as their dry powder has approached an all-time high at USD 1.24 trillion (see chart below).

At Moonshot, we constantly strive to identify and present the most lucrative investment opportunities to our community. Our in-depth analysis has pinpointed five industries that exhibit remarkable potential for delivering attractive returns over the next five years.

Global private equity dry powder pool (in USD billion)
Source: PitchBook

1. AI (Artificial Intelligence)

AI has reached a critical turning point, finally fulfilling its long-promised potential. Ironically, in the process, it has pushed the latest over-hyped technologies like blockchain and the IoT (Internet of Things) out of the investment spotlight.

In fact, a notable 83% of Moonshot investors have recognized AI as the #1 industry to invest in this year, validating its growing prominence.

While deep learning algorithms have been in existence for nearly two decades, their recent application to Large Language Models (LLMs) such as OpenAI's ChatGPT and Alphabet's Bard has captured the world’s attention. Suddenly, AI can generate university essays in seconds and pass Bar exams in the 90th percentile, raising the question: Is singularity near?

Much like how robots replaced and augmented factory workers in the past, LLMs are poised to replace and enhance the capabilities of knowledge workers. This paradigm shift heralds the onset of a new IT-fuelled productivity boom.

AI's progress is not confined to a single domain, extending its influence to various sectors, such as health, defense, and data analytics. For example, Google’s AlphaFold algorithm has now predicted the 3D shape of every possible protein, solving a complex problem that scientists struggled with for over 50 years.

As can be seen in the infographic below, AI is currently used in a wide range of industries.

100 most promising private AI companies in the world
Source: CB Insights

According to Finbold, the market value of AI is projected to experience a 7.9-fold growth by 2030, reaching an impressive USD 1.87 trillion (see chart below). Moreover, Goldman Sachs predicts that AI will increase global GDP by 7% over the course of the next ten years.

Artificial intelligence (AI) market size worldwide in 2021
with a forecast until 2030 (in USD million)
Source: Statista

2. Cybersecurity

Ransomware attacks have unfortunately become routine as both individual and state-sponsored cyberattacks continue to increase. In recent years, hackers have targeted more high-profile companies, including hospitals in New Zealand and an oil pipeline company in Texas, raising serious cybersecurity concerns.

The threat now extends beyond individual attacks, encompassing the hacking of state secrets and financial assets. According to the United Nations Security Council, North Korea alone managed to steal over USD 1 billion in crypto assets in 2022.

Given this escalation in the cyber threat landscape, it is no surprise that cybersecurity has emerged as a rapidly growing field. According to Statista, the global cybersecurity market was projected to reach USD 657.02 billion in 2030, with an impressive CAGR of 12.8% from 2022 to 2030 (see chart below).

Size of the cybersecurity market worldwide from 2019 to 2030 (in USD billion)
Source: Statista

Moonshot community members recognize the immense potential in this industry as well, with 39% of our investors ranking cybersecurity as an attractive sector to invest in for 2023.

Looking ahead, there is no doubt that cybersecurity will become more important and will grow at an even faster rate since people begin to harness AI for hacking. AI-assisted hacking will increase the speed, scale, and sophistication of hacks, making companies without robust cybersecurity measures easy targets. In a nutshell, the increased number of so-called “black hats” means big bucks for cybersecurity investors.

3. Space industry

The space industry was once limited to NASA, ESA, other government agencies, and their contractors. SpaceX has revolutionized the sector, propelling it light-years ahead. According to McKinsey, the value of the space market has increased from around USD 280 million in 2010 to USD 447 billion today, with projections of reaching USD 1 trillion by 2030. Alive to the potential, private equity (PE) firms have invested an impressive USD 272 billion in the industry since 2013.

“I do believe that, in 15 years, we will have structures in space that are not just government-owned but are commercially owned, commercially operated. And they will be not just for research, but they also will be for tourism.” — Peter Platzer, Co-Founder and CEO of Spire Global

SpaceX’s innovative mindset and technological advances have significantly lowered costs (see chart below). In 2023, SpaceX aims to launch 100 rockets, and other private companies like Blue Origin and Relativity Space have joined in, expanding the market for satellites and opening doors to space-based manufacturing and interplanetary human spaceflight.

Size and activities of the space market from 2010 to 2030 (in USD billion)
Source: McKinsey

This new space race will likely result in spin-offs in various industries. According to The European Space Agency, the deployment of new space infrastructure has already benefited numerous industries including meteorology, energy, IT hardware, telecommunications, insurance, transport, maritime, aviation, and urban development.

4. Metaverse

Many people first heard about the metaverse when Facebook rebranded itself as Meta in October 2021. However, the term “metaverse” was first coined in Neal Stephenson's 1992 sci-fi novel, Snow Crash. Back then, many imagined a future where we played games and interacted using Virtual Reality (VR) goggles, but VR headsets were still quite primitive, and the internet was more of a conceptual idea than a tangible reality.

Fast-forward 30 years, and here we are. The technology has finally caught up with the vision. Meta has its Quest and Quest Pro VR headsets, Microsoft its HoloLens, and Apple has just released its Vision Pro in June 2023.

The Vision Pro takes user interaction to the next level, allowing them to navigate using their fingers, voice, and eyes. On the other hand, the HoloLens is being used in manufacturing to display information with its Augmented Reality Setting, and the Quest Pro’s controls have pressure sensitivity recreating the sensation of touch.

These tech giants, alongside numerous smaller upstarts, share a vision of a world where people can play, socialize, and work within 3D immersive environments and workspaces. For many, this is how they always imagined the internet would be.

“The metaverse will be an extension of the physical world, allowing us to do things that were previously impossible. We're just scratching the surface of what's possible.” — Satya Nadella, CEO of Microsoft

While many believe there is not yet a “killer app” for the metaverse, Meta’s VR platform, Horizons World, has built up a small, but loyal fan base. Moreover, Apple's Vision Pro has garnered much praise for its potential to revolutionize sports viewing, with rumors suggesting that Disney, the owner of ESPN, is exploring its possibilities as well. Many also believe that the metaverse could be an exceptional educational tool, allowing students to interact with historical figures or conduct scientific experiments in an interactive space.

According to a market research study published by Contrive Datum Insights, the global metaverse market was valued at USD 51.69 billion in 2022 and is projected to surpass USD 1.3 trillion by 2030 with a CAGR of 44.5% (see chart below).

The global metaverse market size from 2021 to 2030 (in USD billion)
Source: Precedence Research

5. Green and renewable energy

Investing in renewable energy has transcended mere compliance and is now viewed as a catalyst for impactful change and value creation, reflecting the growing seriousness investors are addressing climate change. Over 90 countries have committed to a net-zero carbon target as part of the Paris Climate Agreement.

Consequently, 62% of Moonshot investors are convinced that green energy, cleantech, and renewable energy trends will continue to grow in 2023.

The investments in renewable energy have been consistently rising year after year, reaching their all-time high in 2022, with as much as USD 495 billion invested. While these investment figures are the highest ever recorded, they fall significantly short, representing only one-third of the estimated funding required to stay on course for achieving global net-zero carbon emissions by 2050.

At the same time, the industry is still gaining momentum and is on track to grow at a CAGR of 16.9% from 2023 to 2030, reaching USD 3.84 trillion by 2030.

Global investments in renewable energy by sector
Source: BloombergNEF

In Europe, the green transition has been significantly accelerated by Volkswagen’s 2015 “Dieselgate” scandal in car emissions and more recently by Russia’s invasion of Ukraine, leading to the disruption of Russian natural gas supplies to Europe. The IEA expects Europe to double its growth in renewable power capacity between 2022 and 2027.

“The European Union now understands that if we want to increase our energy sovereignty, it can only go through renewables because we have very little gas left, we have almost no coal left, and we have no oil.” – Frans Timmermans, European Commission Executive Vice-President for the European Green Deal

In line with the global trend of growing renewable energy adoption, the Swiss government recently committed CHF 4.1 billion in state investments for climate protection and renewable energy projects as part of its long-term climate plan. As of now, more than 25% of the total energy consumption in Switzerland comes from renewable sources, and this number is on track to increase.

Conclusion

Moonshot has already taken a proactive step by incorporating three promising companies from these industries into its investment arsenal, and this is just the beginning. These five industries are poised to play a pivotal role in shaping the world's trajectory over the next five years, and, in doing so, they hold great potential for providing substantial returns to far-sighted investors.

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