In this article, we discuss the 12 best Internet-of-Things (IoT) stocks to buy now.
The Internet-of-Things (IoT) industry has advanced by leaps and bounds in the past few years, emerging from niche corners of the tech world into the mainstream consciousness of the global business elite. Research by consulting firm Gartner noted that the number of businesses that use IoT technologies had increased from 13% in 2014 to nearly 30% by the end of 2020. Across the world, the use of IoT-connected devices is projected to increase to 43 billion by 2023, an almost threefold increase from 2018.
Conservative estimates place the worth of the IoT businesses to be around $58 billion in 2025. This represents a compound annual growth rate of an explosive 34% from 2020. Some of the top firms expected to benefit from this incredible opportunity include Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Apple Inc. (NASDAQ:AAPL), among others discussed in detail below. These firms are investing hundreds of millions of dollars into the development of IoT technology.
Some of the factors influencing this growth include maturing technologies such as artificial intelligence, 5G, and the cloud, as well as the role that IoT plays in reaching sustainability goals. The North American region continues to lead this tech revolution, even as a slower-than-anticipated overall economic recovery, a lack of chipsets, and disrupted supply chains present near-term challenges to the growth of the sector. Looking ahead, advanced principal technologies and a proliferation of devices are fueling the growth of IoT technologies.
Our Methodology
The companies that operate in the Internet-of-Things (IoT) sector were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by Jonas Leupe on Unsplash
Best IoT Stocks to Buy Now
12. Alarm.com Holdings, Inc. (NASDAQ:ALRM)
Number of Hedge Fund Holders: 20
Alarm.com Holdings, Inc. (NASDAQ:ALRM) provides cloud-based solutions for smart residential and commercial properties in the United States and internationally. It is one of the best IoT stocks to invest in. On October 5, Kohler, a bath and kitchen product innovator, joined Phyn, a leader in intelligent water solutions, to provide their suite of home monitoring solutions to the Alarm.com platform. Both companies said that integration had made it easier for customers to track their water consumption.
On August 11, Maxim analyst Jack Vander Aarde maintained a Buy rating on Alarm.com Holdings, Inc. (NASDAQ:ALRM) stock and raised the price target to $90 from $84, noting that the company’s Q2 results were better than expected across the board.
At the end of the second quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $140.9 million in Alarm.com Holdings, Inc. (NASDAQ:ALRM), compared to 25 in the previous quarter worth $203 million.
Just like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Apple Inc. (NASDAQ:AAPL), Alarm.com Holdings, Inc. (NASDAQ:ALRM) is one of the best IoT stocks to buy according to hedge funds.
11. Ambarella, Inc. (NASDAQ:AMBA)
Number of Hedge Fund Holders: 27
Ambarella, Inc. (NASDAQ:AMBA) develops semiconductor solutions that enable high-definition (HD) and ultra HD compression in videos, image processing, and deep neural network processing worldwide. It is one of the top IoT stocks to invest in. On June 22, the company announced that the flow systems on chip had been selected by Inceptio Technology, an autonomous driving truck technology and operation company, for its automotive grade central computing platform to deliver level 3 autonomous driving.
On August 31, Stifel analyst Tore Svanberg maintained a Buy rating on Ambarella, Inc. (NASDAQ:AMBA) stock and lowered the price target to $94 from $100, highlighting the company’s roughly in-line quarter and moderate outlook.
At the end of the second quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $214 million in Ambarella, Inc. (NASDAQ:AMBA), compared to 32 in the preceding quarter worth $319 million.
In its Q2 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Ambarella, Inc. (NASDAQ:AMBA) was one of them. Here is what the fund said:
“Ambarella, Inc. (NASDAQ:AMBA) is a leading supplier of video processing and computer vision chips used in the security and automotive markets. The company continues to face supply headwinds as well as some disruptions among its customers in China related to COVID lockdowns.”
10. Garmin Ltd. (NYSE:GRMN)
Number of Hedge Fund Holders: 30
Garmin Ltd. (NYSE:GRMN) designs, develops, manufactures, markets, and distributes a range of wireless devices. It is one of the premier IoT stocks to invest in. On September 13, the company announced that the G3000 integrated flight deck had been selected by Tactical Air Support for the US Department of Defense Avionics Reconfiguration and Tactical Enhancement for Standardization program. G300 was selected first by Tactical Air’s F-5 adversary aircraft training.
On August 5, Tigress Financial analyst Ivan Feinseth maintained a Strong Buy rating on Garmin Ltd. (NYSE:GRMN) stock and lowered the price target to $165 from $208, noting that the recent pullback in shares was a major buying opportunity for investors.
At the end of the second quarter of 2022, 30 hedge funds in the database of Insider Monkey held stakes worth $385 million in Garmin Ltd. (NYSE:GRMN), compared to 30 in the preceding quarter worth $486.9 million.
9. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Holders: 47
Emerson Electric Co. (NYSE:EMR) is a technology and engineering company that provides various solutions for customers in industrial, commercial, and residential markets. It is one of the major IoT stocks to invest in. The shares of the firm have climbed in recent weeks on the back of reports that the company is in talks with Blackstone, a private equity firm, to sell a part of its commercial and residential solutions business for $5 billion to $10 billion.
On August 16, Bernstein analyst Brendan Luecke assumed coverage of Emerson Electric Co. (NYSE:EMR) stock with a Market Perform rating with a price target of $100, down from $105, appreciating the recent earnings beat of the firm.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Emerson Electric Co. (NYSE:EMR), with 2.9 million shares worth more than $233 million.
8. DexCom, Inc. (NASDAQ:DXCM)
Number of Hedge Fund Holders: 56
DexCom, Inc. (NASDAQ:DXCM), a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems. It is one of the elite IoT stocks to invest in. On October 7, the company said that their Dexcom G7 Continuous Glucose Monitoring system was available for people who have diabetes aged two and older in the United Kingdom, Germany, Ireland, Hong Kong and Austria. The firm is also working to launch G7 in South Africa and New Zealand.
On July 29, investment advisory Wells Fargo maintained an Overweight rating on DexCom, Inc. (NASDAQ:DXCM) stock and lowered the price target to $102 from $144. Analyst Larry Biegelsen issued the ratings update.
At the end of the second quarter of 2022, 56 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in DexCom, Inc. (NASDAQ:DXCM), compared to 58 in the previous quarter worth $1.5 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DexCom, Inc. (NASDAQ:DXCM) was one of them. Here is what the fund said:
“DexCom, Inc. (NASDAQ:DXCM) is the leading provider of continuous glucose monitoring systems for patients with diabetes. The stock fell along with other premium valuation growth stocks, primarily on multiple contraction. Concern about price competition from Abbott Labs’ Libre product also played a role. Results for the first quarter were solid. Sales increased 22% organically, margins expanded 350 basis points, and the company maintained guidance for continued strong results.
An important new and revolutionary product, the G7, was approved and launched in Europe, and the company expects it to be approved in the U.S. soon. The product is 60% smaller, fully disposable, and designed for extended wear. We remain excited that CGM will become the standard of care for Type 1 diabetics and will be used extensively for Type 2 diabetics as well, which we think will be a major driver of continued sales and profit growth well into the future.”
7. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 63
Cisco Systems, Inc. (NASDAQ:CSCO) designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry. The firm has also said that it is planning to start hardware product manufacturing in India.
On August 19, Deutsche Bank analyst Matthew Niknam maintained a Hold rating on Cisco Systems, Inc. (NASDAQ:CSCO) stock and raised the price target to $54 from $51, highlighting that the company’s Q4 results included more constructive messaging around orders/customer demand and top-line trend.
At the end of the second quarter of 2022, 63 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Cisco Systems, Inc. (NASDAQ:CSCO), compared to 66 the preceding quarter worth $1.7 billion.
In its Q1 2022 investor letter, Carillon Towers Advisers, an asset management firm, highlighted a few stocks and Cisco Systems, Inc. (NASDAQ:CSCO) was one of them. Here is what the fund said:
“Cisco Systems (NASDAQ:CSCO) traded lower as investors weighed how supply chain concerns would impact sales growth. The company has been upgrading its switching and routing offerings, which should lead to strong demand as on-site locations upgrade infrastructure.”
6. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 65
Intel Corporation (NASDAQ:INTC) engages in the design, manufacture, and sale of computer products and technologies worldwide. On September 8, Deutsche Bank analyst Ross Seymore maintained a Hold rating on Intel Corporation (NASDAQ:INTC) stock and lowered the price target to $35 from $38, noting that the company was expecting Q3 results to come in near the low end of its guidance range.
At the end of the second quarter of 2022, 65 hedge funds in the database of Insider Monkey held stakes worth $2.5 billion in Intel Corporation (NASDAQ:INTC), compared to 76 in the preceding quarter worth $3.2 billion.
In addition to Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC) is one of the best IoT stocks to buy according to hedge funds.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Intel Corporation (NASDAQ:INTC) was one of them. Here is what the fund said:
“Then, there is the case of Intel Corporation (NASDAQ:INTC). A blue-chip tech champion with a market capitalization of over $500 billion in early 2000, the stock was trading at a P/E multiple of 42. It was a fast-growing company whose stock price and multiple declined more or less in line with its peers. However, unlike Google, Intel’s net income has grown from $7.3 billion in 1999 to $19.9 billion in 2021, a compounded annual growth rate of just 4.7%. Its growth from the dot com era has not proven to be durable, and Intel has yet to trade at the price it attained in 1999.”
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 71
QUALCOMM Incorporated (NASDAQ:QCOM) engages in the development and commercialization of foundational technologies for the wireless industry. It is one of the best IoT stocks to invest in. On July 28, Wells Fargo analyst Gary Mobley maintained an Equal Weight rating on QUALCOMM Incorporated (NASDAQ:QCOM) stock and raised the price target to $150 from $135.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Citadel Investment Group is a leading shareholder in QUALCOMM Incorporated (NASDAQ:QCOM), with 5 million shares worth more than $644 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and QUALCOMM Incorporated (NASDAQ:QCOM) was one of them. Here is what the fund said:
“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker QUALCOMM Incorporated (NASDAQ:QCOM), which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. It is one of the top IoT stocks to invest in. On October 10, research company IDC said that Apple, the largest tech company in the world, was the only tech company to see positive growth in the PCs sector over the past few months.
On September 29, Rosenblatt analyst Barton Crockett upgraded Apple Inc. (NASDAQ:AAPL) stock to Buy from Neutral with a price target of $189, up from $160, noting that US adults were showing substantial interest in the company’s new iPhones and watches.
At the end of the second quarter of 2022, 128 hedge funds in the database of Insider Monkey held stakes worth $143 million in Apple Inc. (NASDAQ:AAPL), compared to 131 in the previous quarter worth $182 million.
In its Q2 2022 investor letter, Alger Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact production of apple products, however the manufacturing facilities have resumed activity.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG) provides various products and platforms such as Google Services, Google Cloud, and YouTube. It is one of the premier IoT stocks to invest in. On October 7, Sundar Pichai, the CEO of the firm, said that Google had plans to invest a total of ¥100 billion in Japan by the end of 2024. Google will open its first data center in Chiba Prefecture next year, which will provide faster and more stable access to Google services.
On August 3, Tigress Financial analyst Ivan Feinseth maintained a Strong Buy rating on Alphabet Inc. (NASDAQ:GOOG) stock and raised the price target to $186 from $183, noting the resilience of the core cloud and search business of the firm despite misses on earnings.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel investment Group is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 3.1 million shares worth more than $6.9 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOG) is the parent company of Google, the world’s largest search and online advertising company. Shares of Alphabet declined 21.6% in the quarter due to concerns about slower global growth impacting the company’s core advertising business. We retain conviction in Alphabet’s merits as it continues to benefit from growth in mobile and online video advertising, which accrues to its core assets of search, YouTube, and the Google ad network. We are further encouraged by Alphabet’s investments in Cloud, AI, and Autonomous Driving (through its Waymo subsidiary).”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products and subscriptions in North America and internationally. It is one of the major IoT stocks to invest in. On October 10, the company announced that it was looking to invest more than €1 billion in electric trucks, vans, and low emission package hubs across Europe over the next five years. This investment will triple their e-van fleet in Europe from 3,000 to over 10,000 units.
On September 28, Truist analyst Youssef Squali maintained a Buy rating on Amazon.com, Inc. (NASDAQ:AMZN) stock and lowered the price target to $170 from $180, noting that the company reduced expectations on stronger FX headwinds and the prospects for a weakening macro.
At the end of the second quarter of 2022, 252 hedge funds in the database of Insider Monkey held stakes worth $30 billion in Amazon.com, Inc. (NASDAQ:AMZN), compared to 271 the preceding quarter worth $48 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest retailer and cloud services provider. Shares of Amazon declined 35% in the quarter due to weaker-than-expected profits resulting from an overcapacity of resources coming out of COVID. We expect Amazon to grow into its retail capacity in the quarters to come, which would enable it to improve profitability accordingly. Amazon remains one of our largest holdings due to its durable competitive advantages with a leading position in multiple trillion-dollar markets with a long runway for growth (…read more)
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) develops, licenses, supports software, services, devices, and solutions worldwide. It is one of the elite IoT stocks to invest in. On September 29, Raymond James analyst Andrew Marok resumed coverage of Microsoft Corporation (NASDAQ:MSFT) stock with an Outperform rating and a $300 price target, noting that the company has a strong positioning in public cloud, gaming, and digital advertising.
At the end of the second quarter of 2022, 258 hedge funds in the database of Insider Monkey held stakes worth $56 billion in Microsoft Corporation (NASDAQ:MSFT), compared to 259 in the previous quarter worth $66 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“Shares of Microsoft Corporation (NASDAQ:MSFT), a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues. (read more…)
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Disclosure. None. 12 Best IoT Stocks to Buy Now is originally published on Insider Monkey.
