One of the best ways to find success in the stock market is by investing within trends. Long-term megatrends in technology and other sectors have the ability to reshape the economy and create big market winners.

For example, trending sectors like e-commerce, cloud computing, and video streaming led to massive returns in several stocks over the last decade, even with the challenges in the tech sector in the last year. 

While 2023 is potentially shaping up to be a tough year for stocks as most economists expect a recession, that doesn't mean that there won't be any winners.

To find great investments, it's a smart idea to see what's trending right now. Here are two of the biggest megatrends for 2023 and beyond.

1. Platforms vs. point solutions

Behind the scenes, one of the biggest trends in technology is that enterprises are replacing multiple "point solutions" with a single cloud platform.

A point solution is an application that solves a single problem, like accepting payments, authenticating users, or monitoring outages. A platform, on the other hand, gives IT managers a single interface to manage multiple functions, including those provided by individual point solutions.

According to tech research firm Gartner, by 2024, 60% of organizations will have switched from using point solutions to platforms, up from 20% today. As a result, many of the fastest-growing software companies today have positioned themselves as platforms. 

Take GitLab (NASDAQ: GTLB), for example. The company provides a single software platform used to manage DevOps, or the systems through which companies develop and deploy software.

GitLab is growing rapidly, in part because it's grabbing market share from point solutions. Its revenue jumped 74% in the second quarter to $101 million, and it has a large growth opportunity ahead of it from this megatrend, as 85% of its customers are still using two to 10 DevOps point solutions.

Another example is Okta (NASDAQ: OKTA), a leader in cloud identity software. Okta's cloud identity platform integrates with more than 7,000 applications and provides a suite of identity tools including single sign-on and multifactor authentication, so businesses can ensure their customers and employees can log on seamlessly and securely. FedEx is one of many companies that have used Okta's Identity Cloud to replace ad hoc legacy point solutions. In its second quarter, Okta's revenue jumped 43% to $452 million.

Finally, Bill.com (NYSE: BILL) has established itself as an automated end-to-end payments platform for small and medium-sized businesses. It's grown both organically and through acquisitions and helps businesses automate payables, credit card expenses, receivables, and more. Bill.com integrates with accounting software tools and in some cases replaces manual bookkeeping or data entry for its customers. Top-line growth has been strong, with revenue up 94% to $229.9 million.

2. Connected TV

In-home entertainment, the transition from traditional pay TV to video streaming defined the 2010s. This decade, the trend that's shaping up to define it is connected TV, or ad-driven streaming.

With video streaming rapidly replacing linear TV, advertisers are starting to shift ad budgets, and some of the biggest streaming platforms, like Netflix and Disney+, are responding by launching their own ad-based streaming tiers.

Commenting on the decision to launch the ad tier and the audience shift to video streaming, Netflix co-CEO Reed Hastings said on the company's recent earnings call:

What I underappreciated was just the impact on advertisers. They're just being able to reach fewer people. And then the 18-to-49 demographic is even faster than the decline in pay TV. So, this is what is really fueling the cycle is that really collapsed linear TV as an advertising vehicle outside of a few properties like sports.

As eyeballs have shifted to streaming, advertisers naturally want to follow, and that will get easier for them with the Disney+ and Netflix ad tiers. Advertisers also love the connected TV model because it offers both the large-screen, engrossing medium of video with the targeting and tracking of digital channels like social. 

Connected TV is already a fast-growing business for a number of adtech companies, and it could explode next year as Netflix and Disney join the fray.

One such winner of this switch looks to be Roku (NASDAQ: ROKU), the leading streaming platform in the U.S. Though Roku may best be known for its branded dongles that enable streaming, the company makes most of its money through an ad revenue share arrangement with streaming services on its platform. Typically, Roku retains 30% of the ad inventory from its streaming partners and keeps all the revenue it makes from those ads.

Though Roku's revenue growth slowed because of a cyclical decline in ad spending, the growth of the connected TV ecosystem bodes well for it over the long term.

Another company that looks poised to capitalize on the growth of CTV is Magnite (NASDAQ: MGNI), a supply-side adtech platform that rearranged its business to prioritize CTV. In its most recent quarter, CTV revenue rose 29% year over year and now makes up 44% of its revenue, excluding traffic acquisition costs.

The leading demand-side ad tech platform, The Trade Desk (NASDAQ: TTD), also seems well positioned to take advantage of the growth in CTV. Though it doesn't break out CTV revenue, CEO Jeff Green said in the third-quarter results that the CTV market is rapidly growing and is one reason why the company delivered 31% year-over-year revenue growth to $395 million.

Megatrends are worth keeping an eye on

With the rise of these megatrends, there are plenty of ways to profit, and both the transition from point solutions to platforms and the evolution of connected TV look poised to transform their respective industries over the coming years. Companies riding these trends, such as the companies mentioned, are worth keeping an eye on, as they look well-positioned to outperform the market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 2 megatrends to get behind in 2023 appeared first on The Motley Fool Australia.

Another annual Sohn Hearts & Minds Investment Conference has come to pass today. Charlie Munger warned of bubbly valuations reminiscent of the dot-com era, a few ASX-listed shares received a shoutout, and attendees walked away with a lot of ideas to ponder.

While ASX investors only had a few Australian stock picks, the raft of ideas for international opportunities was extensive. Investing experts laid down investment opportunities situated in Hong Kong to London and everywhere in between.

What shares are the experts betting on?

Investors will be busy tonight trawling through annual reports and doing research after being bombarded with investment opportunities today. Although, out of the 13 speakers, only three mentioned ASX-listed shares as their highest conviction pick — and out of those three, one was a tip to short shares.

Shares in Flight Centre Travel Group Ltd (ASX: FLT) finished flat today despite Regal Funds chief investing officer Philip King placing a target on the company's back. At the conference, King made his belief known that the company's shares are overpriced considering the trouble it might have ahead of it still. Namely, the pressure it could face by more competitive online travel offerings.

On the other hand, both Megaport Ltd (ASX: MP1) and Pinnacle Investment Management Group Ltd (ASX: PNI) copped rave reviews by Eleanor Swanson and David Allingham respectively. Notably, Swanson named Megaport as "the most exciting tech adventure of this decade". The shares in both ASX-listed companies finished the day higher.

Beyond these top picks for 2022, the industry experts delivered a long list of companies that local investors might not have heard of before. However, as we found out, these obscure investment opportunities might be more familiar than originally thought.

For instance, Qiao Ma's pick of Techtronic Industries Co. Ltd. (HKG: 0669) is the seller of numerous power tool brands including Milwaukee and Ryobi.

All 13 investment opportunities for 2022 revealed

Every stock pick from the Sohn Hearts & Minds Investment Conference is listed below:

Despite the enthusiasm from these stock pickers, a cloud of scepticism was cast by Berkshire Hathaway's Charlie Munger. The renowned longtime investor put some doubt on current market valuations with his commentary, saying:

Some of the valuations we saw in the dot-com era were higher. But overall I consider this even crazier than the dot.com era.

In addition, Munger handed down his grilling critique of cryptocurrency. Warren Buffett's right-hand man said, "I wish they'd never been invented."

All in all, it was an incredibly eventful day. But now, investors have a bigger bank of potential share ideas for the year ahead.

The post Winning shares for 2022: the companies experts are backing revealed at Sohn appeared first on The Motley Fool Australia.

Investors are spoilt for choice today as the Sohn Hearts & Minds Investment Conference delivers plenty of portfolio ideas. While all of the stock picks are believed to be offering potentially market-beating returns, the most ambitious might be Yen Liow's selection — GitLab Inc (NASDAQ: GTLB) shares.

Today, the managing partner of Aravt Global informed attendees of his high conviction in GitLab. However, Liow's estimated upside to the DevOps platform company is the real elephant in the room. In sharing his top pick for 2022, the fund manager noted the opportunity for GitLab to 10x in value in the coming decade.

Interestingly, Liow stumbled upon the company while researching Atlassian Corporation (NASDAQ: TEAM) — a company that has generated a monstrously good return in its own right. While Atlassian hones in on one specific piece of the DevOp stack, GitLab offers an end-to-end solution.

What is GitLab?

GitLab is for the software developers and coders out there. At its core, the company's product allows developers to store their code online. This allows developers to collaborate on projects together remotely.

However, this is only one piece of the puzzle. In addition, developers are able to plan, manage, create, verify, package, secure, monitor, and release their code (among other things) using the GitLab platform. For those that aren't privy to the world of code, this essentially means people who code have nearly all the tools needed in the one place.

In describing the potential of the GitLab share price and the company, Liow said:

We kept on hearing from our conversation with our developers in the community that this company has fantastic software which they believe will become one of the emergent standards for years to come.

Imagine getting onto Atlassian at the start of the ride. We believe that company is GitLab

At present, the DevOps industry operates in what Liow describes as a duopoly between GitLab and Microsoft's GitHub. At this stage, there is no DevOps offering that provides developers with a one-stop shop for their coding needs. However, Liow expects GitLab is the best-positioned company to solve this problem.

Investing in GitLab shares

Another attractive feature in the eyes of the fundie is GitLab's track record of growth. Over the last seven years, the company has been growing at almost 70%. As a result, GitLab now boasts a run rate of nearly $230 million a year. On top of that, it has maintained a high gross margin of 88% as it expands its customer base.

The proposition for investing in GitLab shares in Liow's words is "software developers are among the most valuable employees in the world and that they will be an extremely valuable place to sell software into".

Shares in the US-listed tech company are valued at US$91.23 a pop.

The post This fundie is picking GitLab shares as the next potential 10x opportunity appeared first on The Motley Fool Australia.