According to IDC Research, by 2021 more than 55% of spending on Internet of Things (IoT) projects will be in software and services. It believes that global IoT will reach more than $7B by 2020. Given the prospects for growth, investors have increased their interest in Internet of Things stocks.
The Internet of Things is a network of devices, that are matched with electronics, software, and sensors. They work together by exchanging and analyzing data. It’s use expands across several sectors including: industrial, security, agriculture, retail, automotive, healthcare, energy, infrastructure and much more.
An example that consumers might be familiar with is the partnership between Philips Lighting and Amazon.
Instead of going towards a switch to turn on the lights, the Philips Hue, a smart light, enables you to control the tone of the lights by the sound of your voice. This can be achieved by pairing the Philips Hue with Amazon’s Alexa Voice Service.
Alphabet’s Glass is another example how Internet of Things technology can improve overall efficiency in the workplace.
In addition, sectors like manufacturing, logistics, and healthcare have increased efficiency by using the product.
From smart watches to smart homes, the Internet of Things is growing rapidly.
Let’s take a look at some of the best Internet of Things stocks.
Internet of Things Stocks: Semiconductors
Let’s face it, without powerful chips the IoT space won’t take off. That said, some of the best Internet of Things Stocks are chip makers.
Intel Corporation (NASD: INTC)- Founded in 1968, the company designs, manufactures, and sells computer, networking, data storage, and communication platforms across the globe.
Intel is working with companies in the automotive, retail, and industrial industry, implementing its IoT technology to help enhance productivity and boost business for its customers.
In addition, its working in energy, providing IoT solutions for oil and gas companies. Along with playing a role in creating smart buildings and smart cities.
It’s doing this by taking unconnected devices and adding sensors and technology that enables them to transfer data to the cloud.
Intel is a member of the S&P 500 and Dow Jones Industrial Averages (DJIA). The company even distributes an annual dividend of $1.20 per share, something that is not very common among tech companies.
Nvidia Corporation (NASD: NVDA) – Founded in 1993, Nvidia operates as a visual computing company. It has two main segments: GPU and Tegra Processor.
It’s focus is on accelerating computing. Most importantly, accelerated computing for AI. You see, in order for AI and deep learning to thrive it needs high performing GPU computing, and Nvidia is among the best in the world at building powerful graphics processing units.
In the beginning of 2014, shares of the stock were trading below $20; however, in the beginning of 2018 it started trading slightly below $200 per share.
Internet of Things Stocks: Cloud Platforms
Amazon.com, Inc. (NASD: AMZN)– Founded in 1994, originally as an online book store, Amazon has grown to become one of the largest companies in the world. If they enter a new market their competitors shake in their boots.
Kroger shares fell 17% after Amazon announced it would be purchasing Whole Foods in the summer of 2017.
That said, Amazon operates under three segments: North America, International, and Amazon Web Services (AWS).
AWS IoT Core is a managed cloud platform that lets connected devices interact with cloud apps and other devices. It can support billions of devices and trillions of messages. The technology allows your apps to be able to track and communicate with all of your devices, whenever you want and even when they’re not connected.
Also, Amazon produces consumer products in the IoT category. For example, the Amazon Echo. It allows you to connect with the Philips Hue, SmartThings, Insteon, and Wink connected devices to control lights and switches with your voice. You can use the device to listen to music, weather, traffic, news, and audio books.
A member of the S&P 500, Amazon is actively traded, despite it’s stock price trading well north of a $1,000 per share.
Internet of Things Stocks: Communications
IoT networks connect personnel, processes, and applications at a rapid speed, so that businesses can make faster and better decisions, while maintaining high levels of security.
AT&T Inc (NYSE) – Founded in 1993, AT&T provides communications and digital entertainment services. Millions of Americans rely on them for internet, cable, and mobile phone service.
That said, the company offers several solutions and services in the IoT category. It includes solutions for: vehicles, asset management, smart cities and health care. Also, it offers services in the form of: networks, platforms, security, and other professional services.
There are over 2000 certified IoT devices on the AT&T network.
AT&T is a member of the S&P 500; the company distributes an annual dividend of $2 per share.
Internet of Things Stocks: Integrated
Alphabet (NASD: GOOGL)- Founded in 1998, this internet information provider has changed the way we live our lives. The company’s assets include: Android, Chrome, Google Cloud, Google Play, and YouTube to name a few.
However, it also offers fiber Internet and Television services. In addition, it owns Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X.
The Google Cloud IoT is a set of fully managed and integrated services. It enables business to access data in real time, allowing them to act swiftly, securely, and be better informed.
Source: Google Cloud
If the company can vertically integrate its businesses it has the potential of emerging as the leader in IoT.
The Internet of Things space is growing rapidly. There are billions of devices in the world that connect to the internet. The companies mentioned above are just some of the players. In fact, it’s worth mentioning firms like: Microsoft, Verizon, IBM, Qualcomm, Texas Instruments, Skyworks Solutions, and Garmin Ltd.
That said, investors need to be careful. Recently, we’ve seen companies trying to take advantage of the buzz surrounding a hot sector. They’ll do this by changing their name to reflect its association with the sector or create a press release on how it’s entering the space. We’ve seen this before with some OTC stocks, in sectors like blockchain, rare earths, 3-D printing and medical marijuana.
As an investor, its your responsibility to do your own homework.