Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Five growth sectors set to outpace Big Tech in 2024

Big Tech’s biggest names dominate the investing scene, but for a more balanced portfolio, you might consider the stocks within their ecosystem – and in growing sectors like healthcare and industrials.

Tech Source: Finimize

Nothing stays the same forever, and that’s especially true in the market. While Big Tech stocks still hold the crown, savvy investors are diversifying and looking beyond those titans. They have very real concerns about concentration risk – having too much exposure to just a handful of massive companies. Therefore, they are seeking ways to balance their portfolio by exploring new growth assets, while not letting go of their tech winners completely.

Capital Group, one of the world’s biggest asset managers, has some ideas on that front. Here are five places where the firm sees growth in the next five years.

Tech: the giants keep growing, but so does their ecosystem

Let’s be clear here: the big dogs of technology – Meta, Nvidia, Apple, Microsoft – aren’t slowing down. In fact, they’re expanding in ways that make traditional growth barriers irrelevant. Take Meta, which slashed its workforce yet managed to grow revenue by 22% in 2024. Or Nvidia, whose gaming chips have become must-haves for AI processing, sending its sales skyrocketing from $11 billion in 2020 to $60 billion in 2024. That’s not just a growth story: it’s a scale story.

What does this mean for you?

Those Magnificent Seven names – Microsoft, Nvidia, Meta, Apple, Amazon, Alphabet, and Tesla – do tend to hog the spotlight, but the ecosystem surrounding them is just as important – and possibly less volatile. Companies that provide the infrastructure – like data centres, chip designers, and utility providers – are primed to benefit from Big Tech’s relentless expansion. Firms like Broadcom, TSMC, and ASML – key players in the semiconductor space – may offer growth opportunities without the wild swings of direct tech investments.

Industrials: they’ve got high barriers, big moats, and serious potential

Beyond tech, industries like defence, energy, and infrastructure are quietly building moats – those high barriers to entry that make it tough for competitors to catch up. The US and Europe are pouring billions into moving their supply chains closer to home and boosting their energy security, setting the stage for a massive investment Supercycle. Eaton, a US-based electrical products company, is a prime example. Its backlog of orders has grown from $2.8 billion in 2019 to over $11 billion in 2024. Similarly, Schneider Electric, which helps commercial buildings become more energy-efficient, is projecting solid growth through 2027.

Even niche areas like aerospace are booming. Companies like Lockheed Martin and Raytheon are getting a boost from rising global defence budgets, with military expenditures hitting a staggering $2.4 trillion in 2023.

Estimated federal spending from recent infrastructure bills Source: Capital Group
Estimated federal spending from recent infrastructure bills Source: Capital Group

What does this mean for you?

Industrials might not have the glitz and cutting-edge appeal of tech, but with steady cash flows and high barriers to entry, these companies are long-term winners. Companies like Eaton, Schneider Electric, AES, and NextEra – involved in power generation, energy efficiency, and defence – are especially well-positioned for sustainable growth.

Healthcare: it’s a growth story for the ages

Healthcare often flies under the radar, but it’s a sector that investors would be wise to keep an eye on – especially right now. In 2022, healthcare spending in the US hit an eye-watering $4.5 trillion, and, as the population ages, that number seems only to go up. What’s more, we’re riding a third wave of innovation, driven by genetics and AI.

One of the most exciting developments is gene therapy, which allows scientists to tackle diseases at the genetic level. Companies like Alnylam are leading the charge with RNAi therapeutics – essentially “silencing” genes that cause diseases. Meanwhile, Vertex Pharmaceuticals recently won approval for a sickle cell disease treatment created using innovative CRISPR gene editing technology.

What does this mean for you?

Healthcare stocks as a group are undervalued compared to the broader market, but the potential for innovation is massive. Look for companies at the forefront of gene therapy, AI in healthcare, and cutting-edge drug development. Eli Lilly and Novo Nordisk are dominating the obesity drug market. Vertex is leading in gene therapy. These companies could drive significant returns as the healthcare sector evolves.

Consolidated industries. Dominant players lead the pack.

Some companies are so commanding in their industries, it’s hard to imagine anyone knocking them off their perch. Think about it – LVMH and Hermès practically own their lane in the luxury goods market, while TSMC controls 80% of the world’s advanced computing chips. Netflix? Still the king of streaming. Meta and Google? They have an iron grip on online advertising.

But it’s not just tech and luxury enjoying this kind of dominance. Companies like Caterpillar (heavy machinery), Costco (retail), and Airbus (aviation) have built empires that are tough to topple. Years of industry consolidation, a well-honed business model, and a lack of serious competition make these companies especially resilient.

What does this mean for you?

Leader-of-the-pack companies are often more resilient to market swings. Mind you, they’re not immune to setbacks – long-dominant Boeing has seen a string of troubles, for example – but over time, they tend to deliver solid returns. If you’re looking for stability and long-term growth, keep an eye on these industry bosses.

India: it’s the next big market

Step aside, China – India’s taking the spotlight. With a booming economy, a thriving private sector, and a rapidly expanding middle class, India is shaping up to be the next major growth market. It’s on a development trajectory that mirrors China’s of 20 years ago, offering massive potential in manufacturing, consumer goods, and technology.

India’s mid-cap companies are particularly exciting: they’ve nearly doubled in numbers in the past four years. And there are huge growth opportunities for the country’s small-cap firms. These businesses – with market caps ranging from $1 billion to $10 billion – now make up a third of the MSCI India index. Sectors like housing, healthcare, and consumer finance are flourishing as the middle class grows. India is also emerging as a strong alternative to China for manufacturing, especially in electronics and home appliances. With heavy government investment in infrastructure and digital connectivity, these companies have plenty of room to scale.

Number of MSCI India companies by market cap Source: Capital Group
Number of MSCI India companies by market cap Source: Capital Group

What does this mean for you?

India presents a massive growth opportunity for patient, long-term investors. The country’s private sector is full of high-quality companies that are poised for serious growth. With global growth expected to pick up again, this might be a good time to explore emerging markets in general – and India, in particular.

The big takeaway here is this: although the Magnificent Seven stocks have been stealing the spotlight, other places offer the potential for strapping growth too. And that’s good – no one wants to put all their eggs in one basket. Remember: diversify across a few key themes, stay patient, and keep a long-term view. You'll be well-positioned to ride the growth wave over the next five years.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Be ready to act on ECB opportunities

Learn how the ECB’s monetary policy announcements affect interest rates and price stability ahead of its next meeting in 12 December 2024.

  • How might the next meeting affect the markets?
  • What are the key rate decisions to watch?
  • Why is the Governing Council announcement important for traders?
Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.