The Internet of Things, or IoT, refers to the growing number of physical objects, devices, appliances and machines that are connected to the internet via sensors and software.
You probably use IoT products every day and don’t even notice it. IoT is changing people’s daily lives inside their homes with the advent of products like smart speakers and doorbells. Smart home additions and upgrades have played a big role in the booming housing and home improvement markets.
More industries, such as industrial, health care and retail, are investing in IoT to add efficiency to their business operations, as well. This tailwind, along with the continued demand for smart home devices, is expected to help the IoT market continue to grow. The number of active IoT devices will surpass 25.4 billion by 2030 and IoT products and services have the potential to generate $4 trillion to $11 trillion in economic value by 2025, according to statistics by DataProt, a cybersecurity solutions firm.
To capitalize on the IoT trend, here are eight Internet of Things stocks to buy:
- Amazon.com Inc. (ticker: AMZN)
- Best Buy Co. Inch. (BBY)
- Walmart Inc. (WMT)
- Home Depot Inc. (HD)
- Lowe’s Cos. Inch. (LOW)
- Target Corp. (TGT)
- Alphabet Inc. (GOOG, GOOGL)
- Sonos Inc. (SONO)
Amazon could be considered the king of smart home device retailing. Amazon’s smart home dominance includes a wide range of integrated products and services, alongside Echo smart home hubs and the smart doorbell company Ring, which Amazon acquired. Amazon also provides IoT services that allow businesses to collect, store and analyze data for industrial, commercial and automotive use cases.
Amazon Web Services provides cloud services that connect to IoT devices. Amazon’s cloud business is steadily expanding and has become a highly profitable segment of the e-commerce giant’s overall business.
Best Buy is a retailer at the top of the list when people think of buying a connected home device. The company’s advantages include its customer service via Geek Squad, its focus on the smart home category and its vendor-supported product offerings. These products range from smart home and security devices to automation systems.
Consumers can shop for a variety of brands, including Google, Amazon, Ring and Philips. The retailer also keeps the consumer in mind by offering discounts on popular smart devices. As the market for smart devices grows, Best Buy has opportunities to expand its business, as well.
In addition to being a top smart home shopping destination, Walmart is investing in IoT to add efficiency to its business operations. Walmart tracks more than 7 million unique IoT data points across its US stores, which play an integral part in its business.
Walmart’s IoT application helps monitor the temperature in its stores to maintain food quality and allows it to effectively manage energy consumption and reduce energy usage, if needed, to lower utility costs. Walmart’s IoT strategy still has a long way to grow. The company’s IoT roadmap includes adding new equipment, algorithms and data processing to improve operations in more locations.
Home Depot is the market share leader in large home appliance sales. Home Depot has free online tools that help customers find smart home products that work with home automation systems. Last year, Home Depot launched a new smart home platform called Hubspace that covers a range of smart home devices and comes in a mobile app to allow easier selection of smart home products.
Home Depot Ventures recently made an investment in a product called Afero, which is a platform that connects devices to the internet securely with speed and scalability. Investments like these should help improve the customer experience.
Lowe’s has a comprehensive list of hundreds of home improvement smart products, both in its online and physical stores. Lowe’s has prioritized using IoT and virtual reality technology to improve the customer buying experience. “During the past three years, we have been exploring real-life applications of augmented and virtual reality experiences to directly help our customers to solve everyday problems,” says Kyle Nel, executive director of Lowe’s Innovation Labs.
In the pipeline are SmartSpot showrooms, in collaboration with retail software developer B8ta, which will allow customers to try out IoT on devices before they buy and tailor product recommendations to their individual homes.
Target, one of the world’s top retailers, is known to be a great place to shop for smart devices at affordable prices, capturing a healthy amount of the smart home market. Here consumers can find connected products and services for home, entertainment and security from the most popular technology brands, including Amazon’s Alexa and Google’s Nest.
To showcase its IoT products and services, Target opened a connected-home concept store in San Francisco. It displays the IoT products that are sold in Target and explains how connections between the devices work. Target is preparing to cater these products to customers.
Alphabet is a market leader in online advertising and search. The company also markets Google Home, a line of smart speakers integrated with Google and third-party services, including voice-controlled home automation. Google Cloud’s IoT platform allows consumers and businesses to build hardware and software that connects to Google Cloud.
One of the appealing benefits of Google’s IoT services is data management. There are multiple benefits that come from this, such as advanced data analytics, operational efficiency and security. Google also has an ecosystem of partners that have connected their devices to Google Cloud, including Siemens, Nexcom and Losant.
Smart speakers are only a small part of the overall businesses of Amazon and Alphabet, but Sonos is more of a pure play on smart home devices. Sonos has one of the best-known brands for wireless home sound systems and offers a great way for investors to gain exposure to smart home entertainment.
Similar to tech peers Apple Inc. (AAPL), Amazon and Alphabet, shares of Nasdaq-listed SONO are down significantly, about 36% for the year as of June 17. But for investors who decide this stock would be a good addition to their portfolio, it could be the right time to accumulate shares at a cheaper valuation.