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Wearable Spending to Hike Further: 4 Tech Stocks to Consider

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The Wearable market holds promise as it continues to witness rising spending on health-monitoring devices in this coronavirus-hit world.

According to the latest Gartner report, spending on wearable devices across the world is expected to reach $81.5 billion in 2021, suggesting growth of 18.1% from that reported in 2020.

Wearables, including fitness trackers and smartwatches, are highly proliferating in this data-driven world, thanks to advancements in technologies such as AI, Machine Learning, Internet of Things and Virtual Reality.

The devices have been witnessing solid momentum in the multi-trillion healthcare industry, with the growing emphasis on health and fitness,and the rising trend of sedentary lifestyle worldwide.

Hence, the adoption rate of the devices is increasing rapidly as these aid in accurate personal health monitoring. Additionally, increasing interest in health and wellness monitoring, owing to rising health concerns induced by COVID-19, is spurring growth in the wearable market.

Per IDC data, global shipments of wearable devices grew 35.1% year over year to 125 million units in third-quarter 2020.

Additionally, per a report from Grand View Research, the global wearable medical device space is anticipated to witness a CAGR of 27.9% between 2020 and 2027.

Further, a report from Fortune Business Insights shows that the global market for fitness trackers is likely to hit $91.98 billion by 2027, witnessing a CAGR of 15.2%.

Given the upbeat scenario, competition in the wearable space is constantly intensifying with the growing efforts of market tech players like Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) , Garmin (GRMN - Free Report) , Amazon (AMZN - Free Report) , Samsung , Xiaomi and Huawei.

Infact, alluring growth opportunities in this market are enticing other companies to foray into it. This is evident from OnePlus’ latest launch of its first fitness band — OnePlus Band — which features fitness and sleep trackers, and heart rate and blood oxygen saturation monitors.

Hence, investment in wearable stocks is surely enticing, owing to the immense growth potential present in the wearable market.

Our Picks

Here we pick four tech stocks with strong fundamentals that investors can consider to capitalize on the growth prospects of the wearable market. Moreover, the following stocks have outperformed the S&P 500 index in the past year.

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Apple, which is currently dominating the wearable space on the back of its expanding Watch family, is constantly making efforts to sustain its supremacy. Strong adoption of Apple Watch Series 6, which features a blood oxygen sensor with additional healthcare and fitness features like Cycle Tracking, the Noise app and Activity Trends, remains a major positive. Further, the always-on retina display on Apple Watch Series-5 enjoys a strong momentum.

Additionally, the company’s watchOS 7 remains noteworthy. It offers advanced customization tools, and an array of new health and fitness features, including sleep tracking, automatic handwash detection, additional workout types like dance, and a new hearing health feature.

Furthermore, this Zacks Rank #2 (Buy) company recently launched Fitness+ subscription services built for Apple Watch. Fitness+ tracks data related to health and workout from Apple Watch, which can be viewed from Apple devices.

Alphabet remains well-poised to rapidly penetrate the booming wearable space on the heels of concerted efforts by its division Google. The growing momentum of its Wear OS remains a tailwind. Additionally, the seamless synchronization of Wear OS with Google Fit and other health apps is a positive.

Further, the company’s acquisition strategy to expand itsfootprint in the underlined market remains a major positive. The acquisition of Fossil’s smartwatch technology is noteworthy.

Additionally, Google reached a definitive agreement to acquire the wearable fitness company Fitbit , which is termed as a remarkable buyout in the fitness tracking space.

Fitbit’s expanding fitness tracker portfolio is likely to give Google a competitive edge over other market players. The recently launched smartwatch called Sense, which is equipped with stress management and other attractive features,remains noteworthy. Additionally, the revamped versions of its Versa, namely Fitbit Versa 3 and Fitbit Inspire 2, are gaining strong momentum.

Currently, Alphabet carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Garmin’s product portfolio for the fitness business,which has been built with both internal development efforts and acquisitions, makes the company a potential player in the wearable space. The synchronization of the Cardiogram heart health app with its wearables, featuring an optical heart rate, such as fenix, Forerunner and vivo devices remains a major positive.

Further, this Zacks Rank #2 company’s vivoactive 4 and 4S GPS smartwatches provide abnormal heart rate alerts. Beside this, advanced sleep-tracking, respiration tracking, body battery energy monitoring, women cycle tracking, stress tracking with relax reminders and hydration tracking constitute some other interesting features.

In addition to this, vivomove 3/3S, vivomove Style and vivomove Luxe, which are well-equipped with health wellness features, are noteworthy devices in the wearable portfolio of Garmin.

Amazon, which finally made its foray into the underlined market by launching Amazon Halo and Amazon Halo Band, the fitness tracking service and wearable, respectively, is well-positioned to capitalize on the above-mentioned growth opportunities.

Notably, Amazon Halo Band, which is an all-day wear water-resistant fitness band, comprises a heart rate monitor, a temperature sensor and an accelerometer. Moreover, it includes two microphones, an LED indicator light and a small sensor capsule for providing accurate data.

Apart from this, the Amazon Halo app consists of five core features, namely activity, sleep, body, tone and labs, all developed for lending meaningful healthcare insights.

Moreover, the Halo app’s bundle of AI-driven health features is expected to help this Zacks Rank #3 (Hold) company to gain strong momentum in the wearable space.

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