Investing in Internet of Things stocks

Growth projections are impressive, but the technology isn’t a necessity for most consumers.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

The Internet of Things is a concept that’s expanding rapidly, evolving into a whole range of devices like washers and thermometers that “talk” to one another over the Internet. But investors in Australia should be wary of emerging data regulations before they invest in Internet of Things stocks.

What is the Internet of Things?

The Internet of Things (IoT) refers to a network of physical devices capable of connecting to the Internet. Many of us use this network every day, from streaming music through wireless headphones to adjusting the thermostat of our homes with a mobile device. Wearable technology, automated vehicles and smart devices all belong to the Internet of Things.

Popular Internet of Things devices include:

  • Amazon Echo
  • August Smart Lock
  • AWS Snowcone
  • Fitbit
  • Google Home
  • Nest Smoke Alarm
  • Ring Doorbell
  • WeMo Insight Smart Plug

Internet of Things stocks are from companies that design or produce Internet-connected hardware and software. You can invest in the IoT by purchasing individual stocks or exchange-traded funds in Australia.

Why invest in Internet of Things stocks?

The Internet of Things is considered a growth industry with numerous consumer, commercial and industrial applications. Automation is the name of the game for many subsectors of the tech industry as consumer demand for autonomous tech rises.

The global market for Internet-connected end-user solutions hit $US100 billion in market revenue in 2017, according to Statista. And it’s forecast that by 2025, the industry will be worth $US1.6 trillion. B2B market research suggests a compound annual growth rate of 26.9% for the IoT sector from 2017 to 2022.

Smart technology is growing rapidly, and IoT stocks give investors in Australia the chance to back a fast-paced sector with promising growth projections.

Risks of investing in Internet of Things stocks

Economic downturns can impact the viability of businesses that produce or sell consumer goods. After all, if consumer spending declines, so do profits. A large chunk of the IoT industry comprises electronics that are new enough for consumers to consider luxurious novelties — not necessities. This sector’s growth could be affected by even a mild recession.

Another major concern for investors is data privacy and security. This technology is evolving, and emerging data-protection legislation may damper the industry’s progress. As we continue to explore the role of this technology in our everyday lives, tightening data regulations and more robust privacy protections may force tech companies to rethink how Internet-connected devices access consumer data. Tech companies are far from immune to government jurisdiction. Emerging regulations could force companies back to the drawing board to amend their software, delaying product launches and affecting existing product lines.

Internet of Things stocks

To purchase Internet of Things stocks, prepare to invest in semiconductors, sensors, processors, chips, Bluetooth technology and smart devices.

What ETFs track the Internet of Things category?

For those seeking a less targeted and more diverse approach to investing in the Internet of Things, ETFs may be worth considering.

There is only one ETF that specifically tracks IoT stocks: the Global X Internet of Things Thematic ETF (SNSR). This fund has more than $US231 million in total assets and tracks many big names in the IoT sector, including Garmin, Qualcomm and Vivint Smart Home.

Compare trading platforms

To invest in IoT stocks, you’ll need a brokerage account. Compare features and fees of top accounts to find the best fit for your goals and budget.

Name Product Standard brokerage fee Inactivity fee Markets International
eToro (global stocks)
US$0
US$10 per month if there’s been no login for 12 months
Global shares, US shares, ETFs
Yes
Zero brokerage share trading on US, Hong Kong and European stocks with trades as low as $50.
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
Join the world’s biggest social trading network when you trade stocks, commodities and currencies from the one account.
IG Share Trading
$8
$50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares
Yes
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, plus get access to 24-hour customer support.
Superhero share trading
$5
No
ASX shares, US shares
Yes
Earn up to 15,000 Qantas frequent flyer points when you transfer an exisiting balance or trade. Offer valid for all new and existing Superhero members until 28 February.
Pay zero brokerage on US stocks and all ETFs and just $5 (flat fee) to trade Australian shares from your mobile or desktop.
ThinkMarkets Share Trading
$8
No
ASX shares
No
Limited-time offer: Get 10 free ASX trades ($0 brokerage) when you open a share trading account with ThinkMarkets before 31 December 2021(T&Cs apply). $8 flat fee brokerage for CHESS Sponsored ASX stocks (HIN ownership), plus free live stock price data on an easy to use mobile app.
Bell Direct Share Trading
$15
No
ASX shares, mFunds, ETFs
No
Finder Exclusive: Get 5 free stock trades and unlimited ETF trades until 31 Dec 2021, when you join Bell Direct. T&Cs apply.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
Saxo Capital Markets (Classic account)
$5
No
ASX shares, Global shares, ETFs
Yes
Access 19,000+ stocks on 40+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
CMC Markets Invest
$11
No
ASX shares, Global shares, mFunds, ETFs
Yes
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, ETFs and managed funds, plus access up to 15 major global and Australian stock exchanges.
SelfWealth (Basic account)
$9.5
No
ASX shares, US shares
Yes
Trade ASX and US shares for a flat fee of $9.50, regardless of the trade size.
New customers receive free access to Community Insights with SelfWealth Premium for the first 90 days. Follow other investors and benchmark your portfolio performance.
loading

Compare up to 4 providers

Important: Share trading can be financially risky and the value of your investment can go down as well as up. Standard brokerage is the cost to purchase $1,000 or less of equities without any qualifications or special eligibility. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Bottom line

Internet-connected technology is growing at an impressive rate, with global market projections on track to crack $US1 trillion by 2024. But the industry relies on consumer spending, and the technology isn’t yet a necessity for consumers — yet.

Explore your brokerage account options with multiple providers to find an account best suited to your investing needs.

Frequently asked questions

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site