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One of the strongest industries on the market this year has been the semiconductors business. Throughout the industry, companies have successfully adapted to the changing needs of the consumer, including an increased demand for small, high-powered chips that enable “Internet of Things” (IoT) devices.
For those that don’t know, the Internet of Things refers to the growing world of interconnected household and industrial devices. Everyday products and machines can now be embedded with sensor technology to process data or interact with other electronic devices.
For example, consumer-level IoT products include things like Amazon’s (AMZN - Free Report) Echo “smart speaker,” wearable motion and activity tracking products, and advanced in-car technology. On the commercial side of the IoT market, industrial manufacturers have begun implementing sensors into machines to track performance and efficiency.
As demand for the microchips that power these IoT devices continues to grow, semiconductor manufacturers with a focus on IoT products will continue to benefit. With that said, we’ve found three already-strong stocks that are looking to benefit even more from further IoT growth.
Intel is one of the world’s largest semiconductor companies, and it has proven to be a leader in the Internet of Things chip business. In its latest earnings report, Intel said that its Internet of Things Group saw revenue grow 2% year-over-year to $572 million. Through the first six months, Intel’s IoT Group has grown 12.5% and is on pace to do $2 billion in revenue this year. Currently, Intel has a Zacks Rank #2 (Buy).
Although you might recognize the brand because of its calculators, Texas Instruments is also one of the leading suppliers of advanced semiconductors in the world. The company’s IoT profile falls under its Embedded Processors division, which includes the Connectivity, Microcontrollers, and Processors categories. In its latest earnings report, Texas Instruments reported 9% growth in Embedded Processors revenue. The stock currently has a Zacks Rank #2 (Buy).
Another one of the most recognizable names in the industry, Nvidia has proven to be one of the strongest stocks on the market recently. The company has seen strong growth in its Gaming and Data Centers divisions, but it is also increasing its Internet of Things presence with its Tegra automotive systems brand. Tegra recently saw quarterly revenues of $160 million, which was up 30% year-over-year and 4% sequentially.
Bottom Line
As you might notice, the Internet of Things business for these giant semiconductor companies makes up just a small sliver of overall revenue. However, all of these brands are seeing strong growth in their IoT divisions, and that growth should continue to remain strong as the overall demand for IoT products increases.
It’s also important to note that these stocks are at the top of a semiconductor industry which has shown incredible performance this year. For our full analysis on the state of the market, check out our latest guide: Should You Be Buying Semiconductor Stocks Right Now?
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3 "Internet of Things" Stocks to Buy Now
One of the strongest industries on the market this year has been the semiconductors business. Throughout the industry, companies have successfully adapted to the changing needs of the consumer, including an increased demand for small, high-powered chips that enable “Internet of Things” (IoT) devices.
For those that don’t know, the Internet of Things refers to the growing world of interconnected household and industrial devices. Everyday products and machines can now be embedded with sensor technology to process data or interact with other electronic devices.
For example, consumer-level IoT products include things like Amazon’s (AMZN - Free Report) Echo “smart speaker,” wearable motion and activity tracking products, and advanced in-car technology. On the commercial side of the IoT market, industrial manufacturers have begun implementing sensors into machines to track performance and efficiency.
(Also Read: How to Invest in the "Internet of Things")
As demand for the microchips that power these IoT devices continues to grow, semiconductor manufacturers with a focus on IoT products will continue to benefit. With that said, we’ve found three already-strong stocks that are looking to benefit even more from further IoT growth.
1. Intel Corp. (INTC - Free Report)
Intel is one of the world’s largest semiconductor companies, and it has proven to be a leader in the Internet of Things chip business. In its latest earnings report, Intel said that its Internet of Things Group saw revenue grow 2% year-over-year to $572 million. Through the first six months, Intel’s IoT Group has grown 12.5% and is on pace to do $2 billion in revenue this year. Currently, Intel has a Zacks Rank #2 (Buy).
2. Texas Instruments (TXN - Free Report)
Although you might recognize the brand because of its calculators, Texas Instruments is also one of the leading suppliers of advanced semiconductors in the world. The company’s IoT profile falls under its Embedded Processors division, which includes the Connectivity, Microcontrollers, and Processors categories. In its latest earnings report, Texas Instruments reported 9% growth in Embedded Processors revenue. The stock currently has a Zacks Rank #2 (Buy).
3. Nvidia Corp. (NVDA - Free Report)
Another one of the most recognizable names in the industry, Nvidia has proven to be one of the strongest stocks on the market recently. The company has seen strong growth in its Gaming and Data Centers divisions, but it is also increasing its Internet of Things presence with its Tegra automotive systems brand. Tegra recently saw quarterly revenues of $160 million, which was up 30% year-over-year and 4% sequentially.
Bottom Line
As you might notice, the Internet of Things business for these giant semiconductor companies makes up just a small sliver of overall revenue. However, all of these brands are seeing strong growth in their IoT divisions, and that growth should continue to remain strong as the overall demand for IoT products increases.
It’s also important to note that these stocks are at the top of a semiconductor industry which has shown incredible performance this year. For our full analysis on the state of the market, check out our latest guide: Should You Be Buying Semiconductor Stocks Right Now?
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>