In the dynamic tech world, smart home stocks are emerging as exciting prospects. Last year, despite mirroring the market’s downturn with a 32% drop, these stocks are now showing promising signs of growth. And it goes beyond gadgets. Due to its innovative connectivity, this sector is transforming into a compelling investment arena.
Moreover, stocks in this sector are surging ahead. They are driven by the impressive average revenue growth in the U.S. home security systems sector. Reflecting this trend, about 43% of U.S. households now boast at least one smart device. And, 30% have equipped their homes with a security system.
Looking ahead, the smart home market is poised for significant growth. Analysts predict a powerful 11.43% annual growth for this market between 2023 and 2028, eyeing a jump to $231.6 billion. This surge is drawing attention to various promising smart home stocks. They range from established giants to new entrants, presenting a valuable opportunity for informed investors.
Honeywell International (HON)
Honeywell International (NASDAQ:HON) demonstrates its versatility and growth potential, notably in the smart home ecosystem.
This optimism is underpinned by Honeywell’s robust quarterly performance. It boasts a revenue of $9.2 billion, a 3% increase year over year (YOY). Notably, orders surged by 10%, and the backlog grew by 8% YOY, reaching a $31.4 billion record high. This success is paralleled in the building solutions sector, which saw a 4% organic growth due to stellar execution in building projects.
Furthermore, Honeywell is contributing to the decarbonization in the U.S. Virgin Islands. The company is providing battery energy storage solutions, marking a significant step in renewable energy advancement. TipRanks analysts echo this sentiment. They assign a moderate buy rating with a 9.7% upside potential, making this stock an attractive option for investors seeking growth and stability.
Amazon (AMZN)
Amazon (NASDAQ:AMZN), a titan in the tech world, continues to make significant strides in the smart home market.
The launch of Echo Hub, a device designed to streamline smart home management, exemplifies this. With its 8-inch display, it can process common requests 40% faster than previous generations, simplifying the control of smart home ecosystems.
Financially, Amazon’s performance is robust, with a remarkable 12.57% YOY increase in revenue, reaching $143.08 billion. Even more impressive is its net income growth, soaring by 244% to $9.9 billion! Additionally, its projected forward revenue growth of 10.32% significantly outpaces the sector median of 5.53% by over 89.43%.
Furthermore, Amazon’s advancements in conversational AI are commendable. It can facilitate handling multiple requests at once and perform Alexa routines solely through voice commands. Further, its stock price is rising 68.7% year to date (YTD). TipRanks analysts assign a strong buy rating with an anticipated upside of 20.25%. Thus, the stock is making a solid mark in the sector.
Alphabet (GOOG,GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is recognized as one of the world’s most valuable companies. It continues to showcase its innovative spirit by owning a variety of top-tier brands integral to daily life.
Highlighting this trend, Alphabet’s Google division has recently revitalized the Google Home app. Offering 18 new automation features, it significantly enhances user interactions with an array of smart home devices.
Moreover, Alphabet has exhibited remarkable strength in its latest quarter, with an impressive 11% YOY revenue increase, soaring to $77 billion. A substantial portion of this growth stems from advertising revenues. Amassing a staggering $59.65 billion, they are projected to continue an upward trajectory.
Furthermore, Alphabet’s venture into hardware, particularly with its Pixel devices, has garnered strong sales momentum. They show the company’s strategic AI integration, while enhancing the overall user experience. Consequently, TipRanks analysts endorse a strong buy rating. Also, they predict a 17.37% upside potential. Hence, the stock is solidifying its formidable market position.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
