What the Data Tells Us: 3 High-Growth Tech Areas To Target for Client Portfolios

Why you should consider AI, software development, and cloud and edge computing

Fact checked by Vikki Velasquez

Emerging technologies are reshaping the global economy, and investment strategies should evolve with them. As a financial advisor, understanding where innovation is driving growth can offer a competitive advantage in building resilient, high-performing client portfolios.

Let’s explore what the data says about three high-potential tech areas in 2025—artificial intelligence (AI), software development, and cloud and edge computing—and why you may want to consider targeting them for near-term upside and resilient long-term returns.

Key Takeaways

• AI is a game-changing technology, and the industry is projected to grow at a 35.9% CAGR from 2025 to 2030.
• Client portfolios may benefit from exposure to AI labs and firms integrating AI into their offerings and operations.
• Software, cloud computing, and edge computing are becoming core business infrastructures, and all three markets are expected to see double-digit annual growth through 2030.
• Top software, data storage, and cybersecurity companies may offer the most durable long-term exposure.

AI for Applied, Generative, and Industrialized Machine Learning

Why It’s High-Growth

Since OpenAI’s groundbreaking release of ChatGPT, businesses have raced to incorporate generative AI into their operations and core offerings. That race is only continuing to heat up. In 2025, McKinsey found that 92% of business executives plan to increase spending on AI in the next three years, with 55% expecting to do so by at least 10%.

The industry’s growth outlook reflects this growing momentum. According to Grand View Research, the global AI market is projected to grow at a compound annual growth rate (CAGR) of 35.9% from 2025 to 2030, until it reaches a projected annual revenue of roughly $1.8 trillion.

Meanwhile, PwC estimates AI could increase the global gross domestic product (GDP) by up to 14%, adding roughly $15.7 trillion in gains, especially across the retail, financial services, and health care sectors.

Its broad and accelerating adoption signals that AI isn’t just an emerging trend, but a technological shift akin to past industrial revolutions. As Marcel Miu, CFA, CFP, founder of Simplify Wealth Planning, said, “The AI opportunity is moving from theory to practical application. While generative AI gets headlines, the real opportunity lies in applied AI solutions.”

Potential Client Benefits

Artificial intelligence is a paradigm-shifting technology. Early exposure to its innovators offers clients the potential for short-term performance boosts, especially during periods of heightened enthusiasm and technological breakthroughs.

However, overemphasizing innovation can be risky.  “Don’t confuse innovation with profitability,” said Jason Gilbert, CPA/PFS, CFF, CGMA, founder of RGA Investment Advisors. “A compelling product or visionary mission doesn’t always translate into sustainable business fundamentals. Look for companies that not only lead in innovation but have competitive moats that can hold over time.”

In other words, client portfolios may also benefit from stable, long-term appreciation through exposure to large-cap software businesses integrating AI into their operations, like many of the Magnificent Seven. For example, in a recent earnings call, Meta raised its 2025 capital expenditure guidance from $60–$65 billion to $64–$72 billion, citing increased investments in data centers to support its AI efforts.

Enterprise software companies embedding AI into their platforms could serve a similar role. “Enterprise software that integrates AI to streamline operations or improve decision-making could potentially offer much better investment potential versus owning stock in one of the big AI labs,” said Miu.

So too could infrastructure providers, the backbone of AI deployment. Even legacy tech companies like Dell and HP are seeing renewed relevance, though semiconductor stocks remain the clear standouts.

Note

NVIDIA stock returned a staggering 239% in 2023 and another 171% in 2024.

Whatever approach you take, rooting AI exposure in stable, value-generating companies may be prudent. As Jordan Gilberti, CFP, founder of Sage Wealth Group said, “Clients increasingly want exposure to what’s next, but in a way that’s grounded in real-world value.”

Software Development

Why It’s High-Growth

Software continues to evolve from a product to a platform—and from a business tool to business infrastructure. “The digital transformation wave isn’t slowing down,” said Miu. “Software is becoming the backbone of every business.” Software now powers core business functions across virtually every sector, from human resources to project management.

Grand View Research expects the global business software and services market to grow at a CAGR of 11.3% from 2025 to 2030, culminating in a total annual revenue of around $1.4 trillion by the end of the decade.

In addition to consistently strong demand trends, software companies benefit from business models that reward scale. Many collect subscription-based revenue, enjoy high gross margins, and incur minimal incremental costs to serve new customers. Together, these factors help support sustained growth and long-term compounding.

One of the more recent accelerators of this growth is the rise of low-code and no-code development platforms, which expand access to software creation beyond traditional developers. By enabling experts outside of IT to build custom solutions, these platforms can help reduce development costs, speed up implementation, and facilitate further innovation for businesses.

Potential Client Benefits

Software companies have long provided some of the most attractive returns in the tech sector, and they continue to offer a durable source of growth for client portfolios. In addition to their sticky customer bases, these businesses benefit from recurring revenues, high gross margins, and low incremental customer costs.

These factors have historically translated into consistent earnings growth, strong cash flows, and significant outperformance.

Note

Microsoft, Salesforce, and Oracle returned roughly 1,035%, 261%, and 345% over the past decade, compared to around 236% from the S&P 500, as of June 3, 2025.

As software becomes even more embedded into business infrastructure, the industry may remain a long-term growth engine for client portfolios.

That said, market dynamics are also shifting. “The software business has evolved,” said Miu. “Companies with recurring revenue streams and durable margins have had competitive advantages for a long time. But with the rise of AI coding tools, what may have once been a home run business could potentially be duplicated and undercut in pricing.”

With competition increasing, successful stock picking may become more challenging. As a result, client portfolios may benefit from a more diversified approach. “Following a passive, indexed approach would likely work best for most investors,” said Miu. “Finding the few 10x winners will be tough, but having exposure to the entire industry will probably drive good outcomes in many portfolios.”

However, not everyone agrees. “This is a stock picker’s market,” Gilbert said. “The days of passive outperformance across all tech are waning. Generative AI, edge computing, and vertical SaaS are creating real opportunity, but the dispersion between winners and losers will widen.”

Cloud and Edge Computing

Why It’s High-Growth

The Internet of Things (IoT) continues to spread across industries, from manufacturing to retail, with the number of connected devices forecasted to reach 31.2 billion by 2030. To manage their growing volume of data, businesses are increasingly adopting hybrid strategies that combine the powers of cloud and edge computing.

This allows organizations to store and process data much more efficiently, helping them meet growing demands for scale and rapid decision-making. The ongoing rollout of 5G networks has only accelerated adoption, enabling faster data transmission and smoother integration between cloud and edge systems.

As a result, both markets are positioned for strong growth. The global cloud computing market is projected to grow at a CAGR of 20.4% over the next five years, reaching $2.39 trillion in value by 2030. Meanwhile, the global edge computing market is forecasted to expand from $16.45 billion in 2023 to $155.9 billion in 2030, representing a CAGR of 36.9%.

Potential Client Benefits

Like software, cloud and edge computing are becoming increasingly essential business infrastructures, making them another potential source of resilient returns. “Technology is evolving faster than ever, and the smartest portfolios evolve with it,” said Gilberti. “Software, AI, and cloud computing are driving that next wave. They’re foundational shifts with the potential to drive long-term business success.”

For many investors, the most compelling long-term capital appreciation opportunities may come from infrastructure leaders in data storage and cybersecurity, as demand for their services continues to rise.

For example, Amazon Web Services—the world’s leading cloud services provider—now accounts for around 19% of Amazon’s total revenue and over 60% of its operating income. It grew 17% year-over-year for the second straight year and is expected to remain a core driver of the company’s profitability in the years ahead.

Due to their central role in AI deployment platforms, cloud and edge computing exposure may also offer short-term upside. Cloud computing is essential for training advanced AI models, while edge computing enables real-time reasoning closer to the end user. Both are key to powering next-generation applications, like autonomous vehicles and smart factories.

That said, the primary opportunity isn’t in short-term speculation, but in exposure to the infrastructure powering the future of the digital economy. “The focus is always on quality companies and durable themes, not chasing headlines,” said Gilberti. “The key is balancing innovation with fundamentals.”

The Bottom Line

The data shows that AI, software development, and cloud and edge computing are three of the most promising growth areas in the tech sector. Each offers a combination of potential for near-term upside—driven by investor enthusiasm and rapid innovation—and consistent long-term returns. Exposing your client portfolios to these areas may offer a compelling opportunity to drive meaningful outperformance.