These Transformational Tech Stocks Could Rally 20% in the Next 3 Months

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Press enter and print out a three-dimensional part for anything from a car to a jet engine to a refrigerator to, well, just about anything your imagination can conjure. This is the promise, and the reality, of 3D printing technology. For traders, two recent developments in the sector mean now is the time to ride the biggest stocks leading this wave of transformational technology.

On Thursday, one of the biggest 3D printing players surged 7% as JPMorgan Chase & Co (NYSE:JPM) upgraded the shares of Stratasys, Ltd. (NASDAQ:SSYS) to overweight, or buy.

SSYS Stock Chart

In a note to clients, analyst Paul Coster wrote, “Stratasys has achieved a sustainable competitive position in the early-adoption phase of a massive, diversified market for 3D printing solutions and is a pure-play for investors seeking exposure to the manufacturing renaissance theme.”

Perhaps as important as the upgrade was JPMorgan’s forecast for the 3D printing market. The firm expects revenue will rise at a stunning compound annual growth rate (CAGR) of 20% to 25% for the next several years.

And JPMorgan is not the only firm with a bullish forecast. Research firm Gartner said they see the sector revenue growing about 74% in 2014. Gartner also forecasts a 95% CAGR for 3D printer units from 2012 through 2017, and 82% CAGR for revenue during that period.

The second development having a positive effect on the sector is the recent news that industrial giant General Electric Company (NYSE:GE) is expanding its use of 3D printers, and that it expects the technology to be involved in more than half of its manufacturing over the next two decades.

The GE news is very important, because the company’s diversified nature means that 3D printing technology will likely be used in aviation, energy, home appliances, medical equipment and a host of other areas.

In an interview with Investor’s Business Daily, Christine Furstoss, GE’s technical director of manufacturing and materials technologies, said that GE currently uses 3D printing in some form in less than 10% of its manufacturing. Furstoss says that should rise to 20%-25% in 10 years and 50% or more in 20 years.

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