How the coronavirus has impacted the adoption of new tech in the U.S.

Despite the coronavirus continuing to rattle the U.S. economy, certain themes investments are both accelerating and expanding, such as video games and Esports, cloud computing and Fintech. Global X ETFs Head of Research and Strategy, Jay Jacobs joins Yahoo Finance’s The Final Round panel to discuss.

Video transcript

MYLES UDLAND: All right, welcome back to "The Final Round" here on Yahoo Finance. Myles Udland with you in New York. We're joined now by Jay Jacobs. He's Head of Research and Strategy at Global X ETFs.

And Jay, I want to talk a little bit about what themes you guys think are being accelerated right now, because we've heard this idea, 10 years of change in one year. And it's a good line. But certainly there are some things that are changing. There are other things that are not changing quite as much.

But in the area of adoption, for example, you're seeing video games really take off. And we've heard a lot about video games and esports. I mean, is this to you guys just as simple as more people are inside more, and they're looking for new outlets. And this just accelerates a trend that-- teens have been playing video games for 20 years. But this really codifies it in a different way.

JAY JACOBS: Absolutely. We think about it in two dimensions. One is acceleration. Are people adopting a theme that they would normally adopt, just sooner? And we also think about it as expansion. Is it reaching new people that never would have been reached before?

So let's cloud computing, for example. As a firm, Global X, we have certain technology that we've been using for years. But the day after we started working from home, we had to start implementing new cloud technologies that day. So maybe it would have been a few years before we got at it, but suddenly it took a day.

When we think about expanding a market, think of something like video games and esports, as you were mentioning. How many more people is it reaching that a video game company never would have considered their primary user target base? Think about the baby boomer generation. Think about maybe Gen Xers, who are suddenly being pulled into video games as a way of interacting with their kids or their grandkids.

And then even further, think about esports. It's relatively small still, but think about all the people who are now watching NBA players play each other on video games, F1 racers racing each other. That is massively expanding the pool of people who are now esports fans. And it's really accelerating that trend.

DAN ROBERTS: Jay, Dan Roberts here. Just quickly, because we don't want to talk just esports, but on the notion of this time benefiting that sector, I just want to ask you your response to a lot of people who think that it's been a little bit of a bubble, and that it's been overstated, the kind of growth potential for esports. I buy the argument that this time could help esports since there's no live sports.

But one problem, as esports has grown, is the idea that I think people above a certain age-- or maybe I shouldn't say age, but demographic-- I don't know that they're going to ever get into esports. So you're kind of banking that young people keep picking it up. I'm not sure that the potential is as huge as a lot of investors and the sponsors seem to think it is.

JAY JACOBS: I would disagree with that. I think esports is severely misunderstood, that somehow it's just watching people play video games, and that's not that fun, right? But if you think about what esports really is, it's about bringing competition into the digital world, which allows so many different types of interactions. You can interact with the players digitally in a way that you can never interact with athletes.

You can compete against those players in a way that you could never compete against Michael Jordan. You can watch it at all times of night. You can have side matches going on. It opens a whole world of interaction.

One of my favorite ones that I heard of was at CES this year. In F1 racing, they are now having digital races to identify future drivers for the physical world. So if you're a good enough racer, you might actually be given a car and the car keys.

That is unbelievable. And I think the draw that that digital interaction will have and the combining of the digital and physical worlds leaves so much potential for this space.

MYLES UDLAND: Jay, very quickly, before we let you go-- e-commerce, we talk a lot about Amazon. Are there other players in there? Is Shopify a name that's interesting in that space?

JAY JACOBS: Sure. I mean, Shopify is probably at the perfect intersection of trying to take mom and pop's small business stores online. So if you think about just the way the world has had to rapidly innovate over the last month to adapt to the new environment, Shopify is very well positioned. Of course, Amazon is incredibly well positioned.

But it's an entire ecosystem. There's dozens of companies out there that are enabling online shopping. And we're just not seeing that slowdown, particularly in the grocery space, which has been very slow over the last few years.

MYLES UDLAND: All right, Jay Jacobs of Global X. Always great to get your thoughts. I'll have you back soon. Stay safe.