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4 Stocks to Watch Amid Rising Adoption of IoT

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Internet of Things (“IoT”) is becoming increasingly popular, thanks to the rapid wave of digitization that is leading to IoT being adopted across various sectors. What allows IoT to be beneficial is the fact that users have the ability to collect data from various connected devices and study them with the help of technologies like artificial intelligence and machine learning, which in turn, leads to improved results.

So, what are the areas in which IoT is witnessing rapid adoption? One of them happens to be smart homes. As consumers continue to purchase smart devices, with the help of IoT, they are gaining more control over the usage of such devices as IoT creates a network of connected smart devices. Notably, this allows users to personalize their smart devices per their convenience while monitoring other aspects of their homes like security. Moreover, wearables are making use of IoT to collect data about the wearer’s health and share that information as and when required.

Meanwhile, IoT is also finding its usage in industrial automation. With the help of industrial IoT, manufacturers can collect and analyze data from various interconnected equipment to increase efficiency and improve productivity. Moreover, a report by Research and Markets stated that industrial IoT allows businesses to continue their operations from a remote location while also saving time and money, as cited in a GlobeNewswire article.

The retail segment is also witnessing an increasing dependence on IoT. This is because IoT allows retailers to collect data related to their customers to better understand their needs and preferences, thereby leading them to be more engaged with their customers. Customers can be offered recommendations suited to their likings, which can eventually lead them to find the product that they are looking for. Markedly, this demand for IoT in the retail segment has been made possible due to the rising popularity of online shopping, which looks ready to grow even further. In fact, a report by eMarketer stated that in 2021, e-commerce as a percentage of retail sales, is expected to increase to 19.5% from 18% in 2020, and reach 21.8% by 2024.

Reflective of the positive developments that IoT is bringing across various segments, it is only fitting that the global IoT market looks poised to grow. Notably, a report by Verified Market Research stated that the global IoT market is expected to increase at a CAGR of 19.98% from 2020 to 2027.

4 Stocks to Keep a Close Eye On

IoT looks set to continue its growth path in the near term, thanks to the many conveniences it provides to varied segments. Hence, this makes it a good time to keep an eye on companies that stand to benefit from this rising adoption of IoT. Notably, we have selected four such stocks that carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alphabet Inc.’s (GOOGL - Free Report) Google offers its Cloud IoT Core platform, which in combination with other services on the Cloud IoT platform, provides a complete solution for IoT data. Moreover, the company offers a range of connected smart home devices like the Google Nest Mini. It currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 27.1% over the past 60 days. The company’s expected earnings growth rate for the current year is nearly 50%.

Advanced Micro Devices, Inc. (AMD - Free Report) provides AMD Embedded product portfolio that enables IoT solutions. Notably, the company’s Ryzen Embedded V-Series System-on-Chips enable IoT gateways with learning and decision-making capabilities. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 10.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 65.9%.

Microsoft Corporation (MSFT - Free Report) offers Azure IoT Hub, which provides a cloud-based solution back end for connecting devices. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 5.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 35.4%.

Alarm.com Holdings, Inc. (ALRM - Free Report) provides interactive security solutions to control and monitor their security systems, as well as connected security devices, including door locks, motion sensors, among others. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 1.2% over the past 60 days. The company’s expected earnings growth rate for the next five years is 20%.

+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities

In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.

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