Can you trade the Internet of Things companies? You’ve probably heard this phrase when researching the newest tech stocks to invest in. But what does the Internet of Things, or IoT, really mean? The Internet of Things is quite literally connecting physical things to the internet that were previously not online. We all know that computers and smartphones are always connected these days, but the IoT connects other objects to create a giant connected ecosystem.
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Table of Contents
List of Internet of Things Companies
| Symbol | Name |
|---|---|
| SWKS | Skyworks Solutions |
| CSCO | Cisco |
| PI | Impinj |
| SNSR | Global X Internet of Things ETF |
What Is Internet of Things and How Does It Work?
With the rollout of 5G networks, the Internet of Things has grown exponentially over the past couple of years. There’s a pretty good chance that you use the Internet of Things in your everyday life already! Things have come a long way since the very first connected thing was born in 1982: a Coca-Cola vending machine.
This machine was able to report back its inventory levels and temperatures for newly stocked beverages. These days, it seems like more devices and appliances are connected than are not. And this will only continue to increase in the future. Let’s take a look at a few ways the Internet of Things is used in our daily lives. Can we trade the Internet of Things companies?
How is the Internet of Things Used?
One of the more common usages of the Internet of Things stocks has been the rise in popularity of the Smart Home. Do you remember when refrigerators and ovens were just normal appliances? I sure do! Today, the latest models all have WiFi and Bluetooth connectivity and can be programmed right from our smartphones.
But the Smart Home doesn’t just start with setting a timer for baking your casserole! Things like lighting, heating, entertainment systems, and even home security, are all connected through the internet.
Being able to control when lights and heating come on can lead to more energy-efficient homes and cheaper utility bills. Forget to lock your door? Why not ensure it is locked by hitting the lock button in the app on your smartphone?
Smart Homes also come with Smart Home Products like Amazon’s Alexa or Google Home. These voice-activated systems can be used to turn appliances on and off, and even provide news about the outside world.
The healthcare industry is rich with innovation and it even has its own branch of IoT called IoMT. The Internet of Medical Things is a growing trend in hospitals around the world; especially as digital healthcare goes mainstream.
Remote health monitoring is available to almost anyone now and is as easy as putting on a Fitbit or Apple Watch. Of course, there are legitimate medical devices available too. Some of which track your blood pressure, heart rate, and even blood glucose levels. Within hospitals, we see innovations like smart beds where nurses are alerted when patients are trying to get up.
Soon, doctors will be able to remotely take our stats in real-time during a virtual telehealth call. As an investor, but also as a human, these advances in the IoMT are extremely exciting and definitely worth monitoring.
What Are Examples of the Internet of Things?
Autonomous Vehicles: There it is! You can hardly write an investing article these days without mentioning this secular trend. Autonomous vehicles have been at the forefront of vehicle technology, especially with companies like Tesla (NASDAQ: TSLA) and Nio (NYSE: NIO). But are we really close to self-driving cars?
Tesla CEO Elon Musk seems to think so! Tesla recently released its FSD Beta Version 9.0 as a software update to its vehicles. The update was met with mixed results. The fact that this is even possible is a huge leap forward compared to just a couple of years ago.
The long-term goal is not just autonomous vehicles, but an entire network of connected vehicles that can work to improve safety on the roads. If one vehicle is able to relay information to the rest of the fleet, then accidents and traffic delays could potentially be avoided. We still aren’t fully there, but the recent advances should make you more bullish than ever on electric vehicles.
Agriculture: Smart sensors that can test factors like temperature, humidity, rainfall, pest infestation, and soil acidity can help to produce optimal crops for harvest. Imagine a farmer knowing the exact moment pests enter the field and how many crops can be saved. An optimal harvest is beneficial for everyone and connected agriculture equipment helps make this a reality.
Don’t be surprised if we eventually have technology that can tell us exactly when fruits or vegetables have ripened and are ready to be picked. You may want to check out Pure Harvest for the Internet of Things companies.
What Are Some Internet of Things Stocks?
Now that you’ve seen all of the beneficial ways we use the IoT, how do we invest in it? Not surprisingly, most Internet of Things companies are tech-based and deal with either the actual connected hardware or the components that allow them to be connected. Here are just a few Internet of Things companies to get your research on the right track!
Skyworks Solutions (NASDAQ: SWKS): Skyworks Solutions is a company that makes the Internet of Things components. Specifically, Skyworks manufactures semiconductors that can be used in RF and mobile communications systems. Skyworks is one of the leading mobile communications semiconductor manufacturers that helps devices connect to smartphones.
It has an A-list group of partners including Google, Samsung, Phillips, Microsoft, Tesla, Cisco, and Amazon. The fastest-growing segment of Skyworks’ portfolio is connected vehicles.
The company estimates that by 2024, 73% of new vehicles shipped globally will have cellular connectivity. Skyworks already boasts relationships with Tesla, Toyota, Mercedes Benz, Volkswagen, and General Motors, among others.
Cisco (NASDAQ: CSCO): Cisco gets a reputation of being an old computer company these days. However, it’s doing a lot in the field of IoT. Remember that Cisco is still the leader in providing enterprise networking hardware.
This means it has direct access to any device that connects to the internet in a home or office. Through its hardware, Cisco offers connectivity through its network connections, data control and exchange, and edge computing. Cisco also offers a platform called Cisco Kinetic, which allows users to manage IoT devices.
Internet of Things Stocks to Consider
Impinj (NASDAQ: PI): They are a part of under-the-radar Internet of Things stocks companies. Impinj offers RFID technology devices and software. A major use for these RFID tags? Apparel and clothing in retail stores. The RFID allows stores to monitor inventory and assets. But these RFID chips can be placed on anything. And Impinj imagines a world where nearly every object can be connected. Even all the Internet of Things companies.
These chips can help industries such as supply and logistics, omnichannel fulfillment, self-checkouts, and inventory tracking. Impinj already has an all-star cast of partners including Coca-Cola, McDonald’s, Boeing, Nike, Target, and NASA. If you’re the type of investor who looks at total addressable markets, Impinj believes only 0.2% of products are currently connected.
Global X Internet of Things ETF (NASDAQ: SNSR): Why not own all of the Internet of Things stocks in one handy ETF? This ETF holds all three of the stocks we discussed, with Skyworks Solutions as the number one holding. Since its inception, the ETF has already returned 138% to investors. And this should only rise as the IoT becomes more prevalent. If you’re like me and you don’t know the IoT industry inside and out, this ETF is a way to get exposure to the entire sector.
The Downside of the Internet of Things
As with anything, there’s a downside to the wider adoption of the Internet of Things. First, there isn’t any predetermined way for the devices to speak to each other. This makes creating software and applications for each device difficult. It also means eventually older models and devices will stop being supported.
This could lead to security issues. There’s also a serious privacy issue with the Internet of Things. Many people wonder just how much companies like Google and Amazon are listening through their smart devices. There’s also a greater potential for hacking, with the more devices that are connected to a network. But the Internet of Things companies can be a good buy for the future.
Conclusion
There is no doubting that the Internet of Things is here to stay. Having all of our devices and appliances connected to each other makes home life much simpler. It’s not just our homes either! Offices, hospitals, even our own cars, are all being brought online giving us a higher-level control than ever before. With 5G being implemented around the world, many companies anticipate a near 1,000 times increase in wireless connectivity.
Of course, there are cons as well. We may be adding convenience to our lives but at the same time could be exposing ourselves to malicious security threats. The truth is, a lot of our devices simply aren’t equipped with the level of security they need to have. Let’s not even get into how dangerous a hacked autonomous vehicle may be. But at the end of the day, it’s a technology that will improve our world, and that is an incredibly powerful investment thesis. And make for interesting for the Internet of Things companies.
