The Internet of Things (IoT) sector is rapidly expanding. This makes it a promising area for investors looking for potential “rags to riches” opportunities. Furthermore, the global IoT market is poised to grow significantly. Projections suggest a jump from around $714 billion in 2024 to over $4 trillion by 2032. Moreover, this is driven by a robust compound annual growth rate (CAGR) of approximately 24.3%. This backdrop forms the basis of my list for IoT stocks to buy.
North America is leading in IoT adoption, driven by its infrastructure for cloud computing and the adoption of 5G technology. This region is experiencing advancements in IoT connectivity and platform solutions. Particularly, we are seeing this in healthcare and industrial sectors. These are two prime industrie that the IoT stocks target.
Europe and Asia-Pacific are also notable for their dynamic market activities. Europe is expected to soon surpass North America in terms of IoT market share. This is due to its aggressive adoption of connected healthcare solutions.
So, with this thesis in mind, here are three IoT stocks that I think have a solid chance of making early investors rich.
Inseego (INSG)
Inseego (NASDAQ:INSG) is a leader in 5G and intelligent IoT device-to-cloud solutions. The company enables broader 5G coverage, multi-gigabit data speeds, and low latency.
I think that INSG could be a great pick for investors due to several reasons.
In Q1 2024, Inseego reported earnings per share (EPS) of negative 44 cents, beating analysts’ estimates of negative 49 cents. The company achieved revenue of $45.01 million, surpassing the expected $41.40 million. This performance marks an 8.69% improvement over the consensus estimate.
Despite a GAAP net loss of $4.5 million, Inseego reported positive Adjusted EBITDA of $3.8 million, continuing a streak of positive Adjusted EBITDA for five consecutive quarters.
Inseego continues to strengthen its position in the technology industry through its advanced 5G solutions. The company’s 5G Edge Cloud combines top-tier 5G technology with rich cloud networking features and intelligent edge applications.
Looking ahead, Inseego is focused on expanding its product offerings and enhancing its technological capabilities.
PTC (PTC)
PTC’s (NASDAQ:PTC) product portfolio includes computer-aided design (CAD) software, product lifecycle management (PLM) tools, and Internet of Things (IoT) platforms.
In Q1 2024, PTC reported strong financial results. The company achieved earnings per share of 70 cents, surpassing the analysts’ consensus estimate of 63 cents. PTC’s revenue for the quarter was $550.21 million, exceeding the expected $538.59 million.
PTC’s Annual Run Rate (ARR), a key performance metric, showed healthy growth, driven by increased subscription adoption and strong renewal rates. The company’s adjusted EBITDA for the quarter was $214 million.
A notable highlight is PTC’s success in transitioning customers to its subscription-based model, which provides recurring revenue and enhances customer retention. The company is also expanding its capabilities through strategic acquisitions and partnerships.
The company is well-positioned to capitalize on the ongoing digital transformation trends within the industrial sector, with IoT being a major growth tailwind. This makes it one of those stocks for investors to consider closely.
Tuya (TUYA)
Tuya (NYSE:TUYA) is a leading global IoT cloud development platform. Tuya’s strategic position in the IoT industry is bolstered by its robust platform that supports a wide range of smart devices. The company focuses on providing scalable and flexible solutions that allow its partners to bring smart products to market rapidly.
In Q1 2024, Tuya reported an EPS of 2 cents, meeting analyst expectations. The company generated revenue of $61.66 million, which was lower than the anticipated $64.80 million, marking a 4.84% shortfall compared to analyst estimates.
Despite this revenue miss, the company showed improvement in operational efficiency, with the loss from operations narrowing significantly compared to the previous year.
Looking ahead, Tuya aims to expand its market presence and enhance its technological capabilities. The company is investing in the development of new features and improvements to its platform, aiming to attract more partners and increase its market share in the growing IoT sector.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
