Wellness, robots, biotech: Freedom names smid beneficiaries of innovation trends

We are in “interesting times,” with geopolitical uncertainty and short-term market volatility clouding the outlook for even the most promising sectors. Yet long-term forces – innovation, technological progress, demographic shifts, and digitalization – continue to drive sustainable investment trends, analysts at Freedom Capital Markets say in an August strategic outlook report. They forecast that by 2035, the innovation economy could represent a $50 trillion opportunity.

Freedom Capital highlights 10 investment themes with the greatest growth potential: AI and machine learning, smart health, automation to autonomy, the future of energy, smart resources, better living, sporting life, future infrastructure, trust and security, and digital finance.

In the report, seen by Oninvest, Freedom Capital picks the small- and mid-cap companies best positioned to capture value from these innovation trends over the next decade.

According to Freedom Capital, AI has become the most powerful catalyst for value creation since the emergence of the internet. If “data is the new oil,” AI is the V-8 engine driving the economy of the future, analysts note.

Growth and market size estimates vary, but Freedom Capital expects substantial investment and scaling over the next decade. The global AI market is projected to expand from $150 billion in 2023 to $1.34 trillion by 2030, for a CAGR of about 36.8%, according to Bain. Grand View Research estimates the market could reach $1.8 trillion by 2030. McKinsey, analyzing 63 application scenarios across industries, forecasts that generative AI could deliver an annual economic impact of $2.6 trillion to $4.4 trillion.

As the market develops, chipmakers are likely to retain pricing power, Freedom Capital believes. Still, high demand for compute and power resources, along with limited training data and a shortage of skilled professionals, remain significant constraints on scaling and deploying AI solutions.

Attractive subsegments

Among small- and mid-cap companies, Freedom Capital highlights GitLab, C3.ai, and Pure Storage.

Health and longevity have already replaced traditional luxury goods as the ultimate status symbol among the wealthy, Healthcare Minutes notes. Physical vitality, exclusive wellness treatments, and the monitoring and optimization of health biomarkers now signal success more strongly than designer handbags or luxury cars.

Global healthcare spending could reach $13 trillion by 2035, driven by rising demand for innovative therapies and the digitalization of healthcare, Freedom Capital writes.

Biotechnology is at the center of scientific innovation, expanding rapidly thanks to advances in genetic engineering, molecular biology, and bioinformatics, according to Precedence Research. The global biotechnology market was valued at around $1.38 trillion in 2023 and is projected to reach $4.26 trillion by 2033. Key growth drivers include synthetic biology and personalized medicine. AI plays a central role, from diagnostics and drug discovery to the automation of administrative processes.

Attractive subsegments

Among small- and mid-cap names, Freedom Capital tracks Illumina, a leader in gene sequencing; HealthEquity, which provides healthcare savings platforms; Haemonetics, a provider of blood and plasma collection systems; and Tempus AI, which combines clinical data with AI for precision medicine.

The rise of AI has laid the foundation for semi-autonomous systems capable of interacting directly with both humans and connected devices. The key subsectors of this market include robotics, autonomous vehicles, drones, and industrial automation. McKinsey estimates that by 2030, IoT-based smart technologies could generate a global economic impact of $5.5 trillion to $12.6 trillion.

Attractive subsegments

Among noteworthy industry players Freedom Capital highlights AeroVironment, a U.S. manufacturer of small drones; Teradyne, which develops semiconductor testing equipment and robotics; and Acuity Brands, a provider of lighting and building management solutions.

Freedom Capital notes that global energy demand is rising, particularly in the U.S. and EU due to AI-related consumption. In the U.S., the International Energy Agency (IEA) projects that data centers will account for nearly half of electricity demand growth over the next five years. According to Freedom Capital, citing IEA data, the global energy market is expected to expand from $10 trillion in 2023 to $14 trillion by 2033.

Over the past decade, about 40% of demand growth has been met by renewable sources, while the share of fossil fuels has steadily declined. Key innovations include solar and wind power, small modular nuclear reactors, green hydrogen, long-duration energy storage, and grid optimization technologies.

Attractive subsegments

Among companies tracked by Freedom Capital are First Solar, a leading solar panel producer; Oklo, a developer of compact nuclear reactors; Bloom Energy, a provider of fuel cell servers; and SolarEdge Technologies, a manufacturer of direct current-optimized systems for solar installations.

The concept of "smart resources" is a framework for technological advancement that simultaneously reduces environmental impact, Freedom Capital explains. Smart resources help lower ecological burdens, improve material efficiency, and support sustainable development.

According to McKinsey data cited by Freedom Capital, the potential market exceeds $8 trillion globally. Millennials and Gen Z are key catalysts for growth, with their preference for environmentally friendly products driving demand for the circular economy and green materials. Additional drivers include emissions and waste regulations, as well as the development of stronger, more flexible composites and AI-based smart materials.

Attractive subsegments

Freedom Capital highlights Pentair, a global water solutions provider; Trex Company, which manufactures sustainable composite decking from recycled plastic and wood; and Darling Ingredients, which converts organic waste into biofuels and feedstocks for green energy.

This trend reflects the convergence of shifting consumer preferences in food, fashion, and health/lifestyle. The COVID-19 pandemic heightened awareness of both mental and physical health. According to Freedom Capital, citing the Global Wellness Institute, Grand View Research, and McKinsey, the combined market for nutrition, design, and health could reach about $9 trillion by 2030, growing at an annual rate of 6-8%.

Generational priorities of health and well-being are expected to drive growth. Millennials and Gen Z increasingly value sustainable, health-focused brands and prioritize experiences over material possessions. At the same time, older generations (boomers and Gen X) have significant disposable income, creating demand for products and services oriented toward longevity, comfort, and health maintenance, Freedom Capital notes.

Attractive subsegments

Freedom Capital analysts highlight Hims & Hers Health, a U.S. telemedicine and online pharmacy platform; Etsy, an online marketplace; Peloton, a maker of high-end fitness equipment; and HelloFresh, a supplier of meal kits for home cooking.

A new generation of consumers raised in the digital age is reshaping entertainment preferences. Young people increasingly seek unique experiences in sports and fitness, along with immersive and interactive formats.

Millennials, in particular, are more inclined to spend on experiences, fueling demand for travel, concerts, and events. According to a McKinsey study cited by Freedom Capital, the global market for entertainment (offline and digital), gaming, and leisure is projected to reach $1.8 trillion by 2030, growing 7-10% annually.

Attractive subsegments

Freedom Capital highlights DraftKings, a U.S. sports betting platform; Boyd Gaming Corporation, a casino operator; Columbia Sportswear, a sports equipment and apparel manufacturer; and TripAdvisor, an online travel marketplace.

Innovation depends on reliable infrastructure, including smart cities, data centers, and space technologies. Next-generation solutions – e.g., 5G and 6G networks, edge computing, and hyperscale data centers – are already reshaping urban environments and communication. Urbanization, data proliferation, and space exploration are making IoT, cloud platforms, and space services the backbone of the future.

Today, the main focus is on hyperscale data centers, along with smart cities and buildings that rely on IoT sensors and automation. According to SmartDev, the global hyperscale data center market could reach $1.44 trillion by 2029, while the edge data center market is expanding at about 10% annually.

Attractive subsegments

Freedom Capital fingers Rocket Lab USA, a space launch and services provider; MasTec, an infrastructure builder; and Lumentum Holdings, a developer of high-speed optical communications solutions.

As people and businesses rely increasingly on digital processes for banking, shopping, communication, and supply chain management, the risk of cyber threats is rising. Failures can cause billions in losses and severely damage reputations. According to IBM, the average global cost of a single data breach reached $4.88 million in 2024, up 10% from the previous year. McKinsey projects that cybersecurity market revenue will grow 8-12% annually to reach $1.2 trillion by 2040.

Attractive subsegments

Freedom Capital highlights Rubrik, a California-based provider of cloud data protection; Kratos Defense & Security Solutions, which has a strong focus on cybersecurity; and Quantum Computing Inc.

The smartphone has become the main growth driver for digital banking, Freedom Capital notes. Increasingly, millennials and Gen Z want to access banking and investment services directly from their devices. According to BCG, the global fintech market is valued at $320-460 billion in 2025 and is projected to grow 15-19% annually to reach $1.3-1.6 trillion by 2030-2034.

Neobanks, i.e., digital financial platforms offering low-cost services, is expected to expand especially rapidly, with growth of about 45% annually, Freedom Capital writes. The strongest momentum for mobile banking and payments is in emerging markets, where apps are opening financial access to previously unbanked populations.

Attractive subsegments

Potential beneficiaries include Pagaya Technologies, a fintech platform focused on consumer lending; Flywire, a payment solutions provider; and Riot Platforms and Marathon Digital Holdings, both crypto miners.

The AI translation of this story was reviewed by a human editor.