The Internet of Things (IoT) is one of the largest and quickest growing sectors in the tech industry. IoT covers a broad, complex umbrella of devices, connectivity and data sharing. Think of smart devices such as cameras, lights and thermostats in your home that connect to the internet to exchange data. They’re part of the Internet of Things.
Connected industrial sensors, smartphones, smart watches, Smart TVs, video streamers, computerized traffic lights — they’re all connected to the internet. They collect data, and many of them communicate with each other. The expansion of the IoT into public spaces is one of the biggest drivers of new wireless technology like 5G. 5G wireless support is necessary to create technologies that rely on massive amounts of data in real-time, like self-driving cars.
Here are 7 Internet of Things stocks to buy for our interconnected world:
- Apple (NASDAQ:AAPL)
- Advanced Micro Devices (NASDAQ:AMD)
- Amazon (NASDAQ:AMZN)
- BlackBerry (NYSE:BB)
- Broadcom (NASDAQ:AVGO)
- Microsoft (NASDAQ:MSFT)
- Taoping (NASDAQ:TAOP)
The global IoT market is projected to hit $1.46 trillion by 2027. If you’re interested in tapping into the rapidly growing Internet of Things, these stocks to buy will get you in the game. Each of these stocks earns a “B” Total Grade in “Portfolio Grader,” so you know they are positioned for growth.
Internet of Things Stocks to Buy: Apple (AAPL)
Apple is a big contributor to the Internet of Things in a broad sense. Between iPhones, Macs, iPads and other products, Apple has over 1.65 billion active devices out there. The vast majority are connected to the internet.
Apple is also directly involved in IoT technology. HomeKit is the company’s smart home platform. Compatible products can be controlled remotely and in groups using Apple devices like an iPhone. Last fall, the company introduced support for the new Thread standard, starting with the HomePod Mini smart speaker. Thread is a connectivity protocol developed by a consortium of tech companies. It allows for IoT products by different companies to better communicate with each other, allowing for wider consumer customization, and thus adoption.
And then there are the projects we know the company is working on, but aren’t exactly sure on release dates: augmented reality (AR) glasses and an Apple car. We don’t have details, but we do know that both — whatever form they ultimately take — will be a big IoT play, taking in and sharing masses of real-time data.
With growth of 68% over the past 12 months, AAPL stock is already a popular investment option. It’s also a key part of any Internet of Things portfolio.
Advanced Micro Devices (AMD)
AMD stock was a top performer in 2019 and 2020. It’s stumbled to start 2021, which makes it a tempting target. After two years of massive growth, being able to snap up shares at a 15% discount compared to the start of the year is an opportunity that’s hard to pass up.
But we’re talking about the Internet of Things. AMD has ramped up its presence in the segment. Over the past several years, the company has expanded into embedded processors that are optimized for IoT requirements. AMD’s Ryzen and EPYC series of embedded chips offer features like advanced security, flexible I/O (connectivity), low latency, and varying power/performance options.
These chips have a range of IoT uses. These include powering servers and gateways, and AMD embedded processors can be found inside connected devices with home, industrial, medical and smart city applications.
Amazon is a very big player in the Internet of things, on multiple levels.
At the consumer level, Amazon is a smart home pioneer and leader. The Amazon Echo smart speaker with integrated Alexa voice control was the trojan horse. Many homes worldwide are now filled with smart devices that can be controlled using your voice and those smart speakers. They are all connected, and ultimately, they are all online. TVs, appliances, even cars. Amazon expanded its own smart home offering beyond Echo speakers and Alexa-enabled devices, buying popular smart home camera makers Blink and Ring. The company has also invested in Canadian smart thermostat maker Ecobee.
That’s the publicly visible face of Amazon’s IoT involvement. Then there’s behind the scenes, where the company also has a massive presence.
All those Internet of Things devices globally need to connect to the internet. They communicate with cloud services that process and store video, send alerts, stream music, and everything else. Amazon Web Services (AWS) is the world’s largest cloud computing provider. Naturally, it has a division dedicated to IoT solutions. AWS is also the profit engine that drives AMZN stock, so gains here have a big impact.
If you’re looking for stocks to buy that will benefit from the exponential growth of the Internet of Things, AMZN stock absolutely needs to be on that list.
Many people still think of Canada’s BlackBerry as the company that kicked off the smartphone revolution, then blew it by refusing to concede that people preferred a touchscreen to a physical keyboard.
BlackBerry reinvented itself. You can still buy BlackBerry-branded phones (through a licensed partner), but the company’s focus has shifted to its QNX automotive infotainment platform and enterprise security. BlackBerry has expanded that reputation for security into the Internet of Things. The company is promoting BlackBerry security solutions for a wide range of privacy-sensitive IoT applications including medical devices and financial services.
BB stock was caught up in the whole Reddit r/WallStreetBets brouhaha earlier this year. That episode saw shares surge 237% in two weeks, only to drop 42% in a single day. The situation has since stabilized. BB stock remains up 44% so far in 2021, but with shares still trading below $10 it’s an affordable stock to consider for part of your IoT portfolio.
Chipmaker Broadcom was a big pioneer in the early days of the Internet of Things. The company’s wireless chips with support for standards like Zigbee were found in a wide range of smart home devices. However, Broadcom sold off that aspect of its business. Twice.
However, Broadcom is still considered one of the stocks to buy in order to get in on IoT growth. The company may have bowed out of wireless connectivity between IoT devices, but it pivoted to security. Broadcom offers commercial IoT security solutions via its Symantec Enterprise Security acquisition in 2019. Services include USB scanning to protect against malware delivered via thumb drives and other USB accessories, as well as critical system protection that isolates IoT devices from cyber security threats.
AVGO stock is up about 6% so far in 2021 and has posted growth of 67% over the past 12 months. The investment analysts tracked by Wall Street Journal have Broadcom stock rated as “Overweight.” Their average 12-month price target of $510.07 offers more than 13% upside.
Microsoft’s Cortana digital assistant can be used to control smart home devices. However, Microsoft hasn’t really pushed Cortana’s capabilities in this area. At least not nearly to the extent that Amazon and Apple do with Alexa and Siri.
However, Microsoft does offer integrated Internet of Things services in Windows 10. It also offers Windows 10 IoT Enterprise, a version of its operating system designed to manage connected devices with screens such as digital signs, enterprise automation, retail solutions, and medical devices.
Like Amazon, the cloud plays a large role in Microsoft’s Internet of Things presence. Microsoft Azure is the second-largest cloud service provider and much as AWS does, Azure has a robust IoT presence.
Among Azure’s selling points is the ability to “establish bidirectional communication with billions of IoT devices.” Microsoft promotes the security of data transmitted to and from IoT devices using Azure. This is an issue that’s becoming increasingly important given that these products can include cameras streaming live video feeds from inside owners’ homes and the thermostats controlling their home’s HVAC system.
MSFT stock has delivered reliable growth for the past decade, and that’s only accelerated over the past five years. The company’s investment in IoT solutions will be part of that growth story over the next decade.
Finally, a company that might not be familiar to American investors. Taoping is a Chinese tech company with a focus on internet-connected smart screens and a smart cloud platform.
The company has these smart screens — used for targeted advertising and online retail — deployed across 211 cities in 26 Chinese provinces. Terminals are installed in a variety of settings including office buildings, residential areas, and commercial districts. It’s a smart cities play on the Internet of Things.
TAOP stock had a rough ride in 2018 and 2019. 2020 became a turnaround year, kicked off by a reverse stock split. Upgrades to its smart cloud platform that increase data mining opportunities, and partnerships with leading Chinese online retailers have kept the momentum going. TAOP got a huge boost two weeks ago when the company entered into the blockchain industry. At this point, TAOP stock is up 215% so far in 2021.
Like any Chinese company listed on American exchanges, one of the risks in a TAOP stock investment is the potential for delisting. However, that’s not a done deal. Even if the action were taken, there is a three-year period between when the first the first warning is issued and the stock ultimately loses its U.S. listing — and Taoping would have the opportunity to comply with regulations during that three year window.
Asia is a huge market for the Internet of Things, so it pays to have a leading Chinese IoT stock on your radar.
On the date of publication, Louis Navellier had a long position in AMD, AMZN, AVGO, and MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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