There are plenty of hot tech trends that have investors excited these days. EV companies, game consoles, streaming video services, apps that facilitate remote work and meetings — the list is endless. But the Internet of Things (IoT) may be bigger than them all. The IoT market was worth $308.97 billion in 2020, which is pretty impressive. However, it’s projected to top $1.85 trillion by 2028. Those Internet of Things stocks are looking pretty tempting right about now.
Each of these companies is part of the IoT story. They offer an investment opportunity with the potential to ride that massive Internet of Things wave that continues to build.
- Arlo Technologies (NYSE:ARLO)
- Cloudflare (NYSE:NET)
- Endava PLC (NYSE:DAVA)
- ON Semiconductor (NASDAQ:ON)
- SiTime (NASDAQ:SITM)
- Viomi Technology (NASDAQ:VIOT)
- Zebra Technologies (NASDAQ:ZBRA)
One of the interesting things about IoT stocks is that companies are involved in a diverse range of industries. As you’ll see, the Internet of Things can encompass devices, chips, software and other areas of focus.
Internet of Things Stocks: Arlo Technologies (ARLO)
Arlo may just be the closest thing on this list of Internet of Things stocks to a stereotypical IoT company. It makes internet-connected security cameras and doorbell cameras and that’s it.
Although very highly regarded for its product quality, Arlo had a rough start. After being spun off as a standalone company, Arlo stock proceeded to tank through 2018 and into 2019. It wasn’t pretty and the poor performance caught many industry watchers and analysts off-guard.
However, in 2020 Arlo began to turn a corner, and ARLO stock began to rally. The company continued to release well-received cameras and more importantly, began to have real traction in selling its Arlo Smart subscription service. That’s key because it provides ongoing service revenue without having to sell new hardware. Arlo reported service revenue up 54.6% year-over-year in 2020 — in fact, at that point, service revenue set a new record for the sixth consecutive quarter.
ARLO stock has rewarded investors with a 170% return over the past 12 months.
At time of publication, ARLO stock was rated “B” in Portfolio Grader.
Cloudflare (NET)
The Internet of Things consists of billions of connected devices and there will soon be billions more. There’s a problem with the IoT that was not really anticipated. Most of these billions of devices were released with little thought about security. That has created an opportunity for cyber criminals who have already turned smart IoT devices like cameras and even home appliances into a weapon. Hackers have used these devices to attack internet-based services such as streaming video or social media by overwhelming them with digital traffic. These DDoS attacks can be crippling.
It’s a big problem and it continues to get worse. That’s where Cloudflare comes in. Cloudflare is best known as a CDN (content delivery network). In a nutshell, Cloudflare makes websites and internet-based services fast, no matter where you access them. However, Cloudflare is also a leading provider of DDoS protection. The company says its security network blocks an average of 70 billion threats per day.
Over the past 12 month, NET stock has delivered growth of 183%. Protecting websites and services against IoT-based DDoS attacks is a part of that growth story. With the number of IoT devices exploding, NET is one of the Internet of Things stocks that is likely to get a boost as a result.
NET stock currently earns a “B” rating in Portfolio Grader.
Endava (DAVA)
U.K.-based Endava is a software development company. Much of its business is in working with companies in sectors like retail, insurance and healthcare, helping them develop new systems to digitally transform their business. So how does Endava fit into the IoT? The company provides solutions that allow these industries to capture more data about their customers by leveraging the interaction of their smartphones with connected devices.
The company also happens to have been involved in the automotive sector for three decades. Automobiles are increasingly becoming connected, with onboard telematics and systems like eCall (automatic alerts to emergency responders in the event of a crash). Cars are increasingly a big part of the IoT, and Endava plays a role by working with automotive companies in developing those increasingly important telematic systems.
DAVA stock has posted gains of 146% over the past 12 months.
The Portfolio Grader rating for DAVA stock is “A.”
ON Semiconductor (ON)
Arizona-based ON Semiconductor is a hot property these days. With global chip shortages, semiconductor stocks are very popular with investors. ON Semiconductor’s custom-foundry business is in big demand.
However, ON Semiconductor also produces image sensors, wireless sensors, SoCs (system on chip) and transceivers used in IoT applications. You’ll find ON Semiconductor sensors and chips used in smart buildings, industrial automation systems and a wide range of connected products that rely on embedded sensors.
Over the past 12 months, this supplier-level Internet of Things stock has performed well, with 101% growth.
The current Portfolio Grader rating for ON stock is “B.”
SiTime (SITM)
SiTime produces silicon MEMS timing solutions for IoT applications. I’m willing to bet you are probably drawing a blank on MEMS timing. MEMS stands for Microelectromechanical system oscillators. These tiny chips are critical to processes such as measuring time, motion sensing, mass sensing and other applications.
Here’s how the company describes the importance of its MEMS solutions to the Internet of Things: “A small part from SiTime runs a big part of your world.”
That may actually be an understatement. You’ll find SiTime MEMS timers in smartphones, mobile accessories, fitness trackers, smart watches, VR glass, remote sensors, tablets, and more. When it comes to Internet of Things stocks, SITM stock is the real deal. It’s also a high-growth performer, with a gain of 167% over the past 12 months.
At time of publication, SITM stock is rated “B” in Portfolio Grader.
Viomi Technology (VIOT)
China’s Viomi Technology is all-in on the Internet of things. The company’s mission statement is to “redefine the future home via the concept of IoT @ Home.” It even managed to get IoT in its stock ticker.
The execution of this mission statement includes the development of a smart home platform. Viomi Technology and its subsidiaries also sell connected — IoT — devices and appliances including fans, refrigerators, water purifiers and washing machines.
Viomi Technology’s home market of China is adopting connected devices at a rapid pace and by 2024 is projected to surpass the U.S. as the world’s largest IoT market. That bodes well for the long-term growth prospects of VIOT stock. Investors in the company have had to ride through some volatility in 2021, but VIOT has still managed a healthy 60% return over the past 12 months.
VIOT stock currently earns a “B” rating in Portfolio Grader.
Zebra Technologies (ZBRA)
Zebra Technologies sells award-winning IoT solutions for markets as diverse as retail, healthcare, transportation and manufacturing. Products like Zebra’s SmartSight are designed around connectivity, ensuring workers and assets are always visible. For example, store operators can get real-time information about the location of tagged inventory. Loading dock managers can see real-time data showing how full trailers are — even data showing the number of packages scanned and loaded in a given time.
Many Internet of Things stocks are focused on consumers, but ZBRA stock is an investment on the logistics and management potential of the IoT. With a return of 103% over the past 12-months, that investment is tracking to be a rewarding one.
Checking Portfolio Grader, ZBRA stock carries a “B” total grade.
— Louis Navellier and the InvestorPlace Research Staff
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Source: Investor Place