The concept of the Internet of Things is transforming our lives and will continue to do so as the WEF, G20 and others smarten up cities. The demand for smart devices will rise in these smart cities worldwide. As a result, IoT and linked stocks will pick up pace.
Smart city initiatives, 5G networks and artificial intelligence (AI) advancements are expected to boost the industry to $1.17 trillion in 2024 and $2.37 trillion by 2029, at 15.12%, providing a huge total addressable market for IoT stocks.
Crucially for the growth of IoT applications, the Federal Communications Commission (FCC) is aggressively pushing 5G networks. The strategy calls for unlocking the spectrum, clearing legal obstacles to infrastructure development and changing laws to inspire 5G investment.
In industry developments, FG332 launched at Computex 2024, expanding Fibocom’s 5G RedCap module line. Wi-Fi 7/Wi-Fi 6 technologies are integrated into one new module, improving IoT connection. Magic Leap is also partnering with Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) to expand immersive augmented reality (AR) experiences.
Investors should concentrate on IoT stocks with buy ratings and double-digit upsides. Thus, one can acquire innovative stocks without spending too much in this fledgling sector. After all, IoT and smart cities, despite being novel concepts with massive potential, are also very risky.
Alarm.com (ALRM)
Alarm.com‘s (NASDAQ:ALRM) platform connects many gadgets and guides the security and smart home sectors. Still, the competitiveness in the smart home industry strains it. Though the mood is negative, the company’s bottom line is solid at a 13% upside target price from $78.33 rewards.
With total revenues of $223.3 million for Q1 of 2024, Alarm.com beat Wall Street’s forecast of $219.7 million. Driven by increasing demand for their clever property solutions, this displays ongoing growth. With a net income of $31.3 million, ALRM’s increase over the past quarters was really notable.
As shown by its recent $425 million convertible senior note sales, which will mature in 2029, ALRM is likewise heavily focused on long-term expansion goals.
Also, the California Energy Commission gave Alarm.com’s EnergyHub division grants to assist virtual power plants expand across California. The EnergyHub developed an Ameren virtual power plant with CPower Energy, therefore boosting green credentials and efficiency.
In addition, Alarm.com introduced its advanced deterrents and gunfire detection systems at ISC West 2024. These strengthen its product range and help partly explain why analysts project earnings growth of 9% for fiscal 2025.
Semtech (SMTC)
Semtech (NASDAQ:SMTC), a semiconductor business, designs and produces a comprehensive variety of analog and mixed-signal products, including solutions specifically for IoT applications.
The dominant low-power, wide-area networking protocol named Semtech’s LoRa is used extensively in IoT. This helps to explain why shares are up more than half this year. Analysts expect SMTC to grow further. This “strong buy” stock comes with a potential 51% based on a $50 target price.
Also, Semtech said that net sales in the first quarter of fiscal year 2025 were $206.1 million, down 12% from last year, but a modest earnings beat of 3%. Once again surpassing high-end projections, the non-GAAP diluted profits per share was 6 cents, a 2,900% earnings beat. The revised EBITDA came at $33.1 million, higher than their high-end estimates.
Besides the strong earnings beat, Semtech included the new Perse Connect SX9476 chipset to extend its PerSe product range. This integrated circuit satisfies global-specific absorption rate criteria and maximizes RF performance to increase 5G mobile device connections. Including tablets, laptops and smartphones, this chipset improves device performance and communication.
Additionally, Semtech debuted linear pluggable optical lines for AI and machine learning data center interconnects at OFC 2024. These links show Semtech’s FiberEdge and DirectEdge PAM4 PMDs for scalable and high-performance data center systems.
Acuity Brands (AYI)
Acuity Brands (NYSE:AYI) reported a 3.2% decrease in net sales in its 2024 fiscal third-quarter results. However, operational profit rose to $145.3 million from $143.3 million. And quarterly net income rose to $113.9 million from $105 million last year. AYI’s target price is $294.25, a 14% rise, and analysts are optimistic on earnings as well, predicting 9% and 8% growth for fiscal 2024 and 2025.
Apart from the earnings beat, Current Lighting Solutions has sold the Arize range of horticultural lighting solutions to Acuity Brands. This purchase gives the company’s current Verjure family of horticultural lighting solutions more depth in the controlled environment agricultural industry.
First introduced in 2022, the Verjure brand makes professional-grade LED lighting options for gardening to help plants grow at all stages. Combining the Arize products into one line seeks to meet a wider variety of indoor plant-growing requirements.
Furthermore, Acuity Brands bought KE2 Therm Solutions, a firm focused on intelligent refrigeration control systems. Finalized in mid-2023, this purchase seeks to include KE2 Therm’s technologies in Acuity’s Distech Controls under the Intelligent Spaces Group company division. And this improves Acuity Brand’s capacity to provide cutting-edge building automation solutions.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.