In this piece, we’ll take a look at the ten internet of things (IoT) stocks that billionaires are loading up on. For more IoT titles, go to 5 Internet of Things (IoT) Stocks Billionaires Are Loading Up On.
As a technology, consumer use of the Internet is entering its fourth decade. And in the last forty years it has evolved a lot. If you’re old enough, you’ll recall that connecting to the Internet in the 1990s and early 2000s required using a dialup modem with its familiar melody of signals sent to a network to establish a connection.
The era of broadband, which arrived around the same time as the smartphone, and the growth of WiFi devices marked the first major change in Internet use. Consumers were no longer limited to either their desks or slow speeds to access the Web, and as a result, the types of applications and data they could use grew exponentially. This growth occurred shortly before 3G Internet smartphones delivered high-speed Internet right into the hands of a consumer and the subsequent proliferation of dongles allowed anyone with a laptop to access the Internet as long as there was a supporting telecommunications tower in sight.
Establishing itself in the 1920s, these are two major technologies in the internet scene. These are fifth generation (5G) telecommunications networks and low earth orbit (LEO) internet satellites. With the latter you can access the network anywhere on the planet as long as there are satellites in orbit and you have the right equipment such as a satellite dish. With the former, the opportunity for a multibillion-dollar industry is at the doorstep of countless companies.
This sector is the Internet of Things (IoT) industry. Starting from the basics, the global IoT industry was worth $399 billion in 2022 and will grow to $486 billion in 2023. From then until 2027, the industry is projected to grow at a compound annual growth rate (CAGR ) by 21.4 percent to an estimated $1 trillion by the end of the forecast period according to research from The Business Research Company. The research firm adds that Asia Pacific used to be the largest segment of the IoT market, which isn’t surprising, as we’ll find out later when we delve into its myriad of use cases. The Business Research Company adds that automotive use is an important industry to use IoT gadgets, and collectively, the gadgets will provide businesses with vast amounts of data to sift through to generate analytical insights.
A key sector that is expected to benefit greatly from IoT devices is the industrial segment. This area involves the use of machines to manufacture products on a large scale, and the use of IoT gadgets enable production managers to detect errors, consolidate and collect new data, and ensure real-time monitoring of the factory line. Therefore, it is not surprising that the industrial sector of the Internet of Things is quite profitable. A research report by Grand View Research shows that this area was worth $321 billion in 2022 and will grow at a CAGR of 23.2% from this year through the end of the decade to a value of $1.6 trillion. Within the industrial IoT usage, the manufacturing segment held an 18% market share in 2022 and will continue to hold the largest portion going forward. In terms of growth rate, the logistics segment is expected to outstrip the broader market and exhibit a CAGR of 24%.
However, these estimates are only representative of how much money IoT companies will make. But what about the value they will generate? On that front, McKinsey has some pretty staggering estimates. He believes that by 2030, IoT could enable users to deliver an absolute value of $12.6 trillion, nearly ten times the revenue IoT companies will generate by some estimates. The factories segment will account for 26% of this value generation and healthcare use is expected to come in second place with a share of 14% at best. Furthermore, and as is the case with most high-tech industries (another example is biotechnology), the developed world is estimated to hold the lion’s share (55%) of this value.
Concluding our analysis by taking a look at the situation on the ground, the management of intelligent lighting and other equipment maker Acuity Brands, Inc. (NYSE:AYI) shared during its Q2 2023 earnings conference call:
With our product vitality and service efforts, we make products that are worth choosing, and our independent sales agents ensure that they are chosen. Product vitality is driving success across our portfolio and during NEXT 23, we introduced several new products. I want to highlight a couple here. First up was the new nLight AIR system input device. This is an indoor controller that can be used in multiple spaces, including offices, shops and stores. The device converts analog outputs into wireless transmission to control smart lighting fixtures. This reduces the need for complex wiring solutions during installation and reduces associated costs for the customer. The second was nLight AIR rPOD Micro. It is a battery powered wall switch that can be used as a traditional wall switch or as a remote control, providing control from anywhere within a building space.
This is a really exciting extension of the technology and an elegant answer to our customers’ needs for flexibility. These and other products continue to attract market attention. This quarter, several of our architectural lighting brands, A-Light, Eureka and Luminis, won a total of eight Good Design Awards from the Chicago Athenaeum, which recognizes products and industry leaders in design and manufacturing that have set new directions for innovation. Now let’s move on to our group of smart spaces. The Spaces team continued to perform well, delivering another quarter of solid growth in sales and operating profit, driven by Distech’s continued success. Distech is winning because we have the best digital control solutions on the market. Its technology is an open protocol, which means you can connect our controller to most new or existing systems in a building space, giving our customers considerable flexibility.
With those details in mind, let’s take a look at the hot IoT stocks finding favor with billionaires, with the top picks being DexCom, Inc. (NASDAQ:DXCM), Acuity Brands, Inc. (NYSE:AYI), and NXP Semiconductors NV (NASDAQ:NXPI).
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Our methodology
To compile our list of the list of Internet of Things (IoT) stocks that billionaires are buying, we first created a list of 36 IoT companies ranging from those that manufacture the IoT devices or their hardware and also those that provide a platform for using data from gadgets. Then, the number of billionaire investors who had held their shares in the first quarter of 2023 was determined, and below are the billionaires’ top IoT stock picks.
10 Internet of Things (IoT) stocks that billionaires are loading up on
10. Belden Inc. (NYSE:BDC)
Number of billionaire investors: 8
Belden Inc. (NYSE:BDC) manufactures and sells connectivity products to a variety of industries such as automation, security and transportation. The company’s products enable data center operations, machine connectivity, power control, and sensor automation.
In the first quarter of 2023, 25 of the 943 hedge funds included in Insider Monkey’s database had purchased a stake in Belden Inc. (NYSE:BDC). Of these, the largest investor in the company is Richard S. Pzena’s Pzena Investment Management with an investment of $72 million.
Belden Inc. (NYSE:BDC) joins Acuity Brands, Inc. (NYSE:AYI), DexCom, Inc. (NASDAQ:DXCM) and NXP Semiconductors NV (NASDAQ:NXPI) in our list of the best IoT stocks bought by billionaires .
9. Johnson Controls International plc (NYSE:JCI)
Number of billionaire investors: 8
Johnson Controls International plc (NYSE:JCI) is an industrial equipment manufacturer headquartered in Cork, Ireland. The company provides related building management, fire control and other products.
41 of the 943 hedge funds Insider Monkey studied for Q1 2023 holdings had bought the company’s stock. Fisher Asset Management by billionaire Ken Fisher is Johnson Controls International plc’s (NYSE: JCI) largest hedge fund investor as he owns 11 million shares worth $682 million.
8. T-Mobile USA, Inc. (NASDAQ:TMUS)
Number of billionaire investors: 9
T-Mobile US, Inc. (NASDAQ:TMUS) is a telecommunications carrier. Through its investments in 5G connectivity infrastructure, it stands at the center of the IoT industry by providing products with a connectivity platform.
After surveying 943 hedge funds for their investments in the March quarter of 2023, Insider Monkey found that 89 had invested in T-Mobile US, Inc. (NASDAQ:TMUS). The company’s largest shareholder in our database is Warren Buffett’s legendary Berkshire Hathaway with a $759 million stake.
7.Autodesk, Inc. (NASDAQ:ADSK)
Number of billionaire investors: 9
While generally thought of as an engineering firm, Autodesk, Inc. (NASDAQ:ADSK) is a crucial player in the enterprise IoT market as it allows customers to consolidate their data into a single platform to generate analytics.
Insider Monkey’s March 2023 quarterly survey of 943 hedge funds revealed that 57 had bought the company’s stock. Autodesk, Inc.’s (NASDAQ:ADSK) largest hedge fund investor is Ian Simm’s Impax Asset Management with a $253 million investment.
6.International Business Machines Corporation (NYSE:IBM)
Number of billionaire investors: 9
Another key player in the IoT analytics market is International Business Machines Corporation (NYSE:IBM). Its platform allows customers to integrate up to five hundred devices under one roof for free to manage their insights and inputs.
49 of the 943 hedge funds in Insider Monkey’s database invested in International Business Machines Corporation (NYSE:IBM) during the first quarter of 2023. The company’s largest investor is Peter Rathjens, Bruce Clarke and John’s Arrowstreet Capital Campbell with a $673 million stake.
DexCom, Inc. (NASDAQ:DXCM), International Business Machines Corporation (NYSE:IBM), Acuity Brands, Inc. (NYSE:AYI), and NXP Semiconductors NV (NASDAQ:NXPI) are some of the favorite IoT stocks for billionaires.
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Disclosure: None. 10 Internet of Things (IoT) stocks that billionaires are loading up on is published on Insider Monkey.
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