Nanotechnology Stocks

Nanotech is an emerging science, so some volatility is to be expected. Of course that's great if you're a daytrader or interested in the short-term. Long-term investors can take solace in knowing that most tech stock experts are optimistic about the long-term growth of the nanotechnology industry.

Nanotech stocks have soared after news they've secured a patent, Nanogen for example. Nanogen, a company specializing in medical diagnostics (not solely within nanotechnology), announced in December 2003 that they had gotten a nanomedicine-related patent. The stock surged over 300% within days, but now trades lower than it did before the patent. The lesson? Patents may very well be great for the long-term, but they do nothing for short-term income.

Blue chips like Intel, Hewlett-Packard, DuPont, and especially IBM are also pioneering nanotechnology. IBM's Nanoscale Science and Technology Group in upstate New York has experimented with using carbon nanotubes as nanowires and as active components in electronic devices. GE also is working with carbon nanotubes and in 2005, announced the development of a carbon nanotube which functions at the theoretical limit (meaning, the highest possible performance that could be obtained from any carbon nanotube).

Carbon nanotubes are very strong, very light-weight cylinder-shaped molecules consiting of carbon atoms. First discovered in 1991, their potential is limitless. They can be either metal or semiconductors, have very good thermal conductivity, and are crucial to nano-electronics. Because they naturally align themselves under high pressure to form rope-like structures, it is conceivable one day an additional use for them will be for extremely strong, unlimited-length wires. Sumio Iijima discovered the first carbon nanotube at an NEC laboratory in Japan, and NEC is still one of the major pioneers behind nanotechnology.

It remains unclear just what impact carbon nanotubes will have for the future on NEC's $12 billion market capitalization, however.

Emerging nanotech players exist within the biotechnology industry, too. Cytogen, which uses nanotechnology to improve the quality of MRI scans, and Elan, which has a patented drug-delivery system known as NanoCrystal.

Potential growth exists amongst companies manufacturing nanopowders, which have a wide range of industrial uses. Nanophase Technologies, the first dedicated nanotechnology company to go public in 1997, produces nanopowders and nano oxides. NEC is involved in this as well, as is Altair Nanotechnologies, who discovered that the residue from processed titanium is of nanoparticle size.