The revolution of the Internet of Things (IoT) has been a long time coming and the exponential rise in demand for internet-based goods and services during the pandemic has only accelerated its growth. The long-term prospects for Internet of Things stocks are incredibly promising as it provides actionable data and insights that help companies make more informed decisions and improve their product or service offering.
For companies in the IoT space, the potential for growth is vast. The market value for this industry was valued at $212.1 billion in 2018 and is expected to reach $1.3 trillion in 2026. This number will only continue to grow as the demand for internet products increases.
During the first half of 2020, virtual connectivity became an impetus for the way we live our lives. Almost every aspect of our day from work to play is wholly dependent on internet-enabled devices.
As we head towards a digital-first future, here are the best Internet of Things stocks that are worth placing your bets on:
Internet of Things Stocks: Microsoft (MSFT)
Tech giant Microsoft is slowly but surely becoming an IoT powerhouse. The company operates the Azure Internet of Things platform which manages a range of IoT devices from humidity sensors to accelerometers in elevators. As the integration between physical and digital infrastructure converges, Microsoft is looking to expand its market through a number of partnerships.
Verizon (NYSE:VZ) recently launched its ThingSpace IoT platform and a 5G network with sensory devices. In an effort to expand the market reach of its products, Verizon has partnered with Microsoft to deploy its IoT solution with speed and ease. With the help of Microsoft Azure, Verizon will be able to get the product in the hands of the customer and boost IoT innovation.
Microsoft is bringing its IoT technology to the fintech space as well. Mastercard (NYSE:MA) announced its partnership with the tech giant to help improve the speed of its innovative payment solutions. Microsoft Azure will help the payments company improve its digital products with identity verification and fraud protection enabled through its IoT platform.
Microsoft’s IoT partnerships are very timely given the increasingly important role that digital products have played in our lives over the last few months. The company’s large footprint in the tech industry makes this Internet of Things stock a great investment.
Another tech behemoth that has become one of the best Internet of Things stocks is Apple. The company is specifically known for its consumer product line and has successfully captured the millennial market with products like the Apple Watch. This is because the market segment is more in-tune with wearable IoT devices over smart home products.
However, Apple hopes to grow its market share in IoT space in the coming years. In December, the company announced its home collaboration initiative, “Project Connected Home Over IP.” The project is in partnership with other Silicon Valley powerhouses such as Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Zigbee Alliance.
The goal behind the project is to build an internet protocol (IP) that would bring a new generation of smart and connected devices to the consumer’s home. This will also help accelerate the development of IoT so consumers and manufacturers can benefit from the products.
Research shows that the global market for smart home devices will reach 1.6 billion units by 2023. As Apple continues to make some power moves in this space, it’s worth getting behind this Internet of Things stock for the long haul.
Cisco has been a leader in the computer hardware industry for many years, but the pandemic led the company to focus its efforts on its networking hardware to grow revenue streams. The tech giant’s two biggest growth drivers were the SaaS (software as a service) model and IoT.
As more companies adopt IoT technologies in the coming years, IT monitoring solutions such as those offered by Cisco will be needed to manage smart devices. The pandemic accelerated the growth of these smart solutions and Cisco saw a 6% increase in revenue for security products. Its IoT management platform, AppDynamics also had a double-digit growth rate in 2020.
In addition to its in-house platform, Cisco also acquired FluidMesh Networks this year. The acquisition of the wireless solutions provider will give the company access to “key markets and customer segments” while ensuring it remains at the forefront of the IoT revolution. Cisco expects the market value of its networked devices to hit $29.3 billion in 2023.
As Cisco continues to grow its presence in the IoT market, making it one of the best Internet of Things stocks to buy.
The pandemic was a death sentence for many companies but the same cannot be said for the chipmaker Qualcomm. The company’s stock price increased more 60% since its low in March and hasn’t stopped growing since.
Qualcomm’s success can be attributed to the company’s next-generation chip that has received positive coverage from market analysts and industry experts. It is specifically designed to cater to the needs of IoT applications and comes with greater performance capabilities. The size of the chip also makes it suitable for various devices from security systems to smart-home consumer products.
In addition to this, Qualcomm decided to ramp up the production of its 7-nanometer chips to meet the needs of the growing 4G market. This will lead the company to greater growth opportunities which were immediately reflective in the company’s stock price that rose when the announcement was made.
As the IoT industry continues to boom, Qualcomm’s core product – its 4G chips – are likely to see continued success in the coming years. It worth putting your money behind this Internet of Things stock and reap its gains as virtual connectivity becomes the norm.
Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for InvestorPlace since 2020. As of this writing, Divya Premkumar did not own any of the aforementioned stocks.