3 "Internet of Things" Stocks to Buy Now

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One of the strongest industries on the market this year has been the semiconductors business. Throughout the industry, companies have successfully adapted to the changing needs of the consumer, including an increased demand for small, high-powered chips that enable “Internet of Things” (IoT) devices.

For example, consumer-level IoT products include things like Amazon’s (AMZN - Analyst Report) Echo “smart speaker,” wearable motion and activity tracking products, and advanced in-car technology. On the commercial side of the IoT market, industrial manufacturers have begun implementing sensors into machines to track performance and efficiency.For those that don’t know, the Internet of Things refers to the growing world of interconnected household and industrial devices. Everyday products and machines can now be embedded with sensor technology to process data or interact with other electronic devices.

(Also Read: How to Invest in the "Internet of Things")

As demand for the microchips that power these IoT devices continues to grow, semiconductor manufacturers with a focus on IoT products will continue to benefit. With that said, we’ve found three already-strong stocks that are looking to benefit even more from further IoT growth.

1.       Intel Corp. (INTC - Analyst Report)

Intel is one of the world’s largest semiconductor companies, and it has proven to be a leader in the Internet of Things chip business. In its latest earnings report, Intel said that its Internet of Things Group saw revenue grow 2% year-over-year to $572 million. Through the first six months, Intel’s IoT Group has grown 12.5% and is on pace to do $2 billion in revenue this year. Currently, Intel has a Zacks Rank #2 (Buy).

2.       Texas Instruments (TXN - Analyst Report)

Although you might recognize the brand because of its calculators, Texas Instruments is also one of the leading suppliers of advanced semiconductors in the world. The company’s IoT profile falls under its Embedded Processors division, which includes the Connectivity, Microcontrollers, and Processors categories. In its latest earnings report, Texas Instruments reported 9% growth in Embedded Processors revenue. The stock currently has a Zacks Rank #2 (Buy).

3.       Nvidia Corp. (NVDA - Analyst Report) 

Another one of the most recognizable names in the industry, Nvidia has proven to be one of the strongest stocks on the market recently. The company has seen strong growth in its Gaming and Data Centers divisions, but it is also increasing its Internet of Things presence with its Tegra automotive systems brand. Tegra recently saw quarterly revenues of $160 million, which was up 30% year-over-year and 4% sequentially.

Bottom Line

As you might notice, the Internet of Things business for these giant semiconductor companies makes up just a small sliver of overall revenue. However, all of these brands are seeing strong growth in their IoT divisions, and that growth should continue to remain strong as the overall demand for IoT products increases.

It’s also important to note that these stocks are at the top of a semiconductor industry which has shown incredible performance this year. For our full analysis on the state of the market, check out our latest guide: Should You Be Buying Semiconductor Stocks Right Now?

by Ryan McQueeney

Source: https://www.zacks.com/stock/news/229185/3-internet-of-things-stocks-to-buy-now

Bull of the Day: Cisco (CSCO)

In mid-April, I recommended buying Cisco (CSCO - Analyst Report) at $28 as one of my top picks to capitalize on the major technology trend known as The Internet of Things.

Now that Apple (AAPL - Analyst Report) has launched its first smartwatch, the "Internet of Things" (IoT) will be getting a lot more press and investors will be busy trying to uncover the opportunities.Now that the stock has been bumped up to a Zacks #1 Rank Strong Buy, I'm still a fan of "the architect" of the worldwide web. Here was the argument in my Zacks Confidential report from April 13...

The Apple Watch is not the first wearable smart-device that can connect to the web and other devices, but it will certainly create the most buzz, fostering not only curiosity about the IoT, but also broader acceptance of the mysterious technology and its goal of storing and tracking more of your data and actions.

But the IoT is not just about connecting your home, car, appliances, devices and body to each other and to the web, it's about a revolution in industrial innovation and efficiency that will make the global economy significantly more productive.

How much more productive? How about $19 trillion worth.

In this report, I'll explain that number and much more about what the IoT is and how to get a piece of those trillions.

What is the Internet of Things?

Goldman Sachs calls the IoT "the third wave of the Internet." The first "wave" was the World Wide Web connection to your desktop in the 1990s. The second wave was when mobile devices could connect. Simona Jankowski, Goldman Sachs Global Investment Research senior analyst, writes on a special website devoted to the IoT...

"By connecting to the Internet billions of everyday devices –- ranging from fitness bracelets to industrial equipment –- the IoT merges the physical and online worlds, opening up a host of new opportunities and challenges for companies, governments and consumers."

Factory machines and robots could "talk" to one another and "make decisions" together that alter production.The Internet of Things lets devices talk directly to each other, make joint decisions, and exchange data between devices and often without the need for the cloud or servers. For example, a smartwatch could be set to turn on the air conditioning in your house when you get a certain number of miles from home or your car could store performance data that is analyzed or shared in real-time.

And Apple is obviously thinking ahead about the wide applications of monitoring individual health with the new tool they created for developers called HealthKit, "which allows all the incredible health and fitness apps to work together, and work harder, for you. It just might be the beginning of a health revolution."

When you throw in the actual Internet and its cloud storage and data-crunching abilities, then all that information between devices can be used in other ways. It’s those "other ways" that prompted IBM (IBM - Analyst Report) last week to announce a $3 billion investment in IoT data collection and mining.

Twin Titans of the IoT: Cisco and GE

$3 billion is nice, but what about that $19 trillion I mentioned? That massive amount has been tossed about in connection with the IoT ever since Cisco CEO John Chambers first uttered it at the Consumer Electronics Show in January of 2014.

That was his estimate of the cumulative economic impact by 2020 associated with adding intelligence and connectivity to everyday objects and factories, as well as every plane, train, and automobile. Chambers, who prefers to call the trend the Internet of Everything, says this...

"It will be bigger than anything that’s ever been done in high tech."

In essence, the technology will become as ubiquitous as microchips are, but maybe even more so, because it will extend beyond machines and computers. Do your car tires have an RF (radio frequency) chip to transmit pressure and other data to your console? Tires are now "connected" devices.

But that giant $19 trillion increase in global GDP isn't just about consumer devices and new products. It's about giant cost savings for "intelligent" corporations. It's about businesses harnessing the cloud and big data to teach them how to be more efficient.

A great ongoing example is how General Electric has been investing in the technology to gather more data about all the machines they build, from locomotives and jet engines to washers and medical equipment. In October, ZDNet.com reported on GE's rollout of its Predix software platform to developers and users in 2015 as it aims to add intelligence to industrial gear...

General Electric on Thursday (October 9, 2014) announced a bevy of alliances with enterprise technology heavyweights as it lines up support for its Predix platform, which is software designed to add intelligence to various Internet of things end points.

For GE, the Internet of things, which the company calls the industrial Internet, the networking of machines and industrial gear is a growth engine. GE wants to position its turbines, engines and other equipment as smart gear that are connected via its software.

GE added that it will deliver more than $1 billion in incremental revenue from its roster of 40 industrial Internet services. GE currently monitors and analyzes 50 million data points from 10 million sensors on $1 trillion of managed assets daily.

How Cisco and GE research, develop, and invest for the IoT will say a lot about the business opportunities. Right now, they are diving in big and that says a lot about the future they see.

Buy CSCO Now

Wim Elfrink, Cisco's executive vice president for industry solutions recently wrote in a blog...

"Today, 37% of total device connections to the Internet come from industrial applications, and industrial connections will surpass consumer-based connections in 2017. IoT serves as the technology foundation in the continuing technology evolution toward the Internet of Everything (IoE), which is the intelligent networked connection among people, process, data AND things. IoT is an $8 trillion opportunity; IoE promises $19 trillion in global economic value over the next decade if we establish the right building blocks for widespread adoption."

The potential on the industrial applications for IoT cannot be overstated. Elfrink goes on to talk about their partners...

"Helping to lead the revolution taking place in industrial applications for IoT are Shell, Rio Tinto, Rockwell Automation, Schneider Electric, Intel, Zebra, Freescale, AirWatch and AGT to name just a few of the firms who recognize the business outcomes made possible by this new solution."

The Obvious Pick: Cisco is a Zacks #2 Rank trading at 14X forward estimates with a 3% dividend yield. The company that keeps the Internet running will obviously be at the center of the IoT trends and should be able to reinvent itself as needed, as it looks ahead.

(end of April 13 report)

In that Zacks Confidential report, in addition to Apple as "the obvious pick," I also recommended investors buy Skyworks Solutions (SWKS - Analyst Report) andInfinera (INFN - Snapshot Report) among "consumer-device plays" for the IoT. You can access the full report here.by Kevin Cook

by Kevin Cook

Source: http://www.zacks.com/commentary/46211/bull-of-the-day-cisco-csco

Hottest Tech Trends You Should Be Investing In

There is no denying that technology is on the rise and rapidly evolving. Prospective tech investors should be diligently paying attention to which sectors could be the next big thing. If you are not already watching the following tech trends, start doing so now.

THE INTERNET OF THINGS

Despite its somewhat vague moniker, the Internet of Things (IoT) is poised to become a major force in the tech industry. Some experts are already predicting that this year could be THE YEAR for wearables. Whether or not that proves to be the case, the rise of the Internet of Things cannot be denied. Although many people tend to associate wearables with this rising new sector, the Internet of Things is about far more than that. Despite the fact that Apple made big news when it finally released its smartwatch, Google ( GOOG) has continued to make progress in the field of the Internet of Things. In fact, last year alone, Google purchased almost three dozen companies.  (For related reading, see articles: The Internet Of Things In 2015 and Intel's Investing Heavily In The Internet Of Things.)

Among the most notable of those firms was Nest Labs, the home automation company. That acquisition alone led to significant discussions regarding whether Google could eventually dominate the home automation field. For its part, Google has certainly made no secret of the fact that it sees tremendous marketing potential in automated home devices by indicating to the SEC back in 2013 that it intends to place advertisements on refrigerators and thermostats.

Google has not stopped there, however. The tech giant has also scooped up a number of other companies engaged in fields ranging from music streaming to cloud computing to artificial intelligence. The massive share of the global search market that Google holds means they certainly have the connections to have their fingers in a lot of different pies, which could certainly prove to be beneficial when it comes to the Internet of Things. (See article: The Business Of Google.)

IBM (IBM) is also now putting a few eggs in the basket known as the Internet of Things, announcing its plans to invest as much as$3 billion over the next four years. That investment is being set aside specifically to build the company's IoT unit. Ultimately, the unit is planned to serve as an open platform that will allow manufacturers to design IoT-connected devices to improve decision-making processes. 

THE RISE OF CLOUD COMPUTING

While the concept of cloud computing has been around for a while, it is still emerging at a rapid rate and is now one of the quickest growing areas of technology. Not that long ago, users had no choice but to store and access data on devices such as disks and even USB flash drives. Today, all of that has changed, as more and more data is now being sent into the cloud. The benefits of this technology, which affords users the ability to access cloud-stored data from any location, have allowed it to quickly create a hot market. No longer are users restricted to limited storage. With the ability to store data remotely, it has become possible for users to share data and collaborate in the use of data more than ever before. (For related reading, and an initial outlook on cloud computing just a few years ago, see article: Is Cloud Computing An Investable Trend?)

Moving data to storage in the cloud has also resulted in a number of other secondary benefits, including the ability to manufacture devices that are lighter, smaller, and increasingly more portable. Consequently, the cloud has become a significant element in the tech sector, and the market for services associated with the cloud is growing daily. According to TechTarget, adoption of cloud services is expected to continue growing. Much of that growth will be driven by increased stability, improved tools, and increasing confidence in the cloud itself.

Underscoring the rising trend of cloud computing is an announcement of a survey conducted by Oxford Economics, indicating that 69 percent of businesses participating in the survey expect to make heavy investments in the cloud over the next three years. Almost all of the 200 executives participating in the Oxford Economics survey reported that cloud computing is now part of their organizations' business strategy. The increased adoption of this technology has resulted in climbing revenues among cloud providers -- which is anticipated to reach approximately $200 billion over the course of the next five years, compared to approximately $60 billion one year ago.