The stock market is continuing to inch up in February after ending January on a mixed note. The S&P/TSX Composite Index has risen by about 6% in 2021 so far. Improving economic activities, rising energy demand, and overall stronger than expected corporate earnings are the key reasons for investors’ optimism — pushing stocks higher.
But the broader market rally doesn’t mean much if you can’t benefit from it. Let’s find out how you can make the best out of it.
The best way to make money from the market rally
Buying stocks for the long term is the best way to benefit from a market rally — especially if the rally comes after a major crisis like the one we saw last year.
Some businesses continued to grow at a fast pace, despite COVID-19 woes. For example, companies like Tesla (NASDAQ:TSLA), Shopify, and Apple (NASDAQ:AAPL) reported a continued strength in their financials last year that drove a massive rally in their stocks last year. It’s always wise to identify some key emerging trends in the market and invest your money there.
Focus on emerging trends
Tesla saw an increase in its car demand that drove a massive rally in its stock last year. Strong demand helped the company significantly improve its financials. With this, the American electric vehicle (EV) maker managed to report profits in the last six quarters in a row. The Elon Musk-led company has faced criticism for years from bears and skeptics for setting unrealistic targets. However, the company’s sooner-than-expected consistent profitability and strengthening vehicle production rate silenced its critics last year.
Similarly, Apple reported a rise in the demand for its product and services amid the pandemic. After ending fiscal 2020 with a 5.5% sales increase, its sales jumped by 21.4% year over year in the December quarter. As a result, Apple’s adjusted net profit rose by 29.3% in the latest quarter.
Apart from its dominance in the tech industry, Apple is now preparing to jump into the emerging electric car market. The company has been working on its car project for many years now. Experts believe AAPL could launch its electric and autonomous cars in the next few years.
Best of benefit from surging EV demand
If you want to benefit from the ongoing stock market rally, you should primarily focus on companies that are betting high on emerging trends in the market. EVs, autonomous cars, smart mobility, and artificial intelligence are the key emerging trends that are attracting automakers and tech companies. Focusing on these trends could help you make millions from the market. But instead of buying an overbought stock, you may want to find a slightly less-popular company in the segment to get higher returns on your investment.
BlackBerry (TSX:BB)(NYSE:BB) could be one such great company right now. The company has become a major player in the auto and tech industry due to its extremely popular QNX real-time operating system. Most large automakers currently use BB’s operating system in their vehicles.
This month, BlackBerry faced a setback when Ford announced that it plans to start using Google Android in its cars instead of the QNX platform. However, BlackBerry isn’t focused only on infotainment platforms. Its heavy investments in artificial intelligence technology and its years of security software experience give it an edge over its competitors. That’s why Ford’s decision to ditch QNX might not affect BB in the long run.
I expect BlackBerry’s under-development integrated vehicle data platform to play a major role in the upcoming electric vehicle and mobility revolution. The company is developing this platform in partnership with Amazon Web services. Moreover, BB recently expanded its partnership with Chinese tech giant Baidu to benefit from skyrocketing EV demand in China.
BlackBerry is set to emerge as a big player in the fast-growing EVs and smart mobility segments apart from its stable licensing business. That’s why investing in stocks like BB could help you make millions in the long term.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Baidu, and Tesla. Tom Gardner owns shares of Alphabet (A shares), Alphabet (C shares), Baidu, Shopify, and Tesla. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Baidu, Shopify, Shopify, and Tesla. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.