There is no denying that, over the course of the past ten years, the “Internet of Things” has begun to play an incredibly important role in our lives. The internet of things, also known as “IoT”, describes the many different devices, appliances, and systems that are all connected through the internet. As time goes on, these systems are becoming increasingly complex and increasingly connected.
Naturally, markets have been quick to reward companies and individuals willing to take risks and pioneer the competitive IoT space. New technologies, new systems, and new ways of looking at the world, in general, have all proven themselves to be incredibly profitable. While some IoT penny stocks have been flops (as you will find with stocks in any market), the IoT industry as a whole has been growing at a rate considerably faster than the broader economy.
One of the best ways to capture the IoT industry’s general rate of growth has been the use of IoT index funds, mutual funds, and other mechanisms for capturing the market’s aggregate change. However, perhaps unsurprisingly, there are also still plenty of active traders hoping to identify which stocks are most likely to increase in value. If you are able to make the correct decisions, the IoT industry is one of the most effective avenues for moving from rags to riches.
In this article, we will discuss 10 IoT stocks to specifically keep an eye on in 2020. This list will contain a mixture of “old reliable” IoT companies, such as Alphabet (Google), as well as several riskier companies whose stocks may currently be underpriced. The best trading strategy examples will involve a mixture of safe and risky investments. By taking a closer look at this market as a whole, you will be able to uncover additional opportunities to backtest against your current strategy.
As Google’s parent company, Alphabet has firmly established itself as a driving force within the IoT industry. In fact, Google Home sales recently surpassed Amazon Echo sales, suggesting that Google really does have what it takes to remain on top. In 2020, Alphabet seeks to become just the third American company to surpass the $1 trillion value mark.
Amazon, narrowly trailing Alphabet on the list of most valuable companies, has had a tremendous decade and is looking to continue its IoT growth. The company is extremely diversified and is investing its tremendous capital power in industries that are rapidly growing. Look for Amazon to continue pushing its operational advantage and finding ways to make the IoT space more efficient.
3. Cisco Systems
Though it can no longer claim its once surprising status as the most valuable company in the world, Cisco has grown every year this decade, making it one of the more reliable sources of return in the IoT space. While last year’s growth was less than the S&P 500’s impressive expansion, the company has produced strong dividends. Currently, the company is likely underpriced and is in a position to increase its growth rate.
The reason why Honeywell consistently remains atop this list—and many others like it—is that the company has an innate ability to do what the market demands: create products that others will actually want to buy. Honeywell established itself as a maker of industrial parts and materials but has quickly pivoted to the much more frontier-like IoT space. Between the company’s data gathering practices and smart industrial systems, this blue-chip stock is still finding plenty of ways to remain profitable.
Microsoft had an incredible 2019, watching its stock increase from just over $100 to a new peak of $170. But while this might suggest to some IoT investors that Microsoft has already “had its run”, the company’s history has been stable enough to suggest this growth has indeed been organic. Look for the company to continue adding value as it expands its global reach and continues introducing new software to the IoT marketplace.
NASDAQ’s Nvidia has continued adding to its brand value and exploring new ways to leverage its technological savvy. The company manufactures CPUs, GPUs, and has also been making considerable contributions to machine learning technology. Nvidia’s team clearly recognizes the role that IoT plays in our lives and, in response, has been wisely utilizing its resources.
Qualcomm’s stock has had a pretty volatile history, but lately, the stock appears to be experiencing a strong upward climb. The company’s name recognition and superior infrastructure have enabled it to consistently manufacture the chips and other technologies that today’s IoT economy demands. The company has done an excellent job building connections in multiple industries, meaning that its stock should be somewhat resistant in the event of a recession.
Over the past five years, Salesforce has seen its raw sales figures increase by (on average) 27 percent per year. Since the company has branched out from its customer relationship management (CRM) origins, it has become one of the most important names in developing cloud technology. Salesforce has been helping businesses become significantly smarter and its stockholders can expect to be rewarded.
9. Sierra Wireless
While its name is not as well known as the others in this list, Sierra Wireless has been making considerable contributions to the IoT space. In fact, Sierra Wireless is actually the leading cellular module vendor in the entire world. The company builds sophisticated and effective networks that make it possible for multiple devices to be coordinated with one another—this is really what the IoT revolution has been all about.
The race for 5G has been extremely competitive and while some companies have found ways to claim that 5G is already here (see: controversial statements from AT&T and T-Mobile), there is still plenty of evidence that Verizon is actually leading the way. The company has been developing its tech at a rapid pace and has the capital needed to make a substantial push.
Conclusion – Best IOT Stocks for 2020
There is no surprise that the IoT industry has been growing at a rapid pace. The stocks mentioned in this article have demonstrated a capacity for growth and have also given clear indications that 2020 will be a financially productive year.
Disclaimer: This content does not necessarily represent the views of IWB.