Finder makes money from featured partners, but editorial opinions are our own.
Investing in Internet of Things stocks
Growth projections are impressive, but the technology isn’t a necessity for most consumers.
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.
1 - 4 of 4
Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. 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 resources on Finder
More guides on Finder
-
Webull Australia review
Webull is a broker with zero-commission trading and a suite of tools to help you invest.
-
Best performing stocks on the ASX in 2024 (Updated weekly)
Looking for the best performing stocks in Australia? We update this list weekly.
-
How to buy Gol Linhas Aereas Inteligentes SA ADR (GOL) shares in Australia
Steps to owning and managing Gol Linhas Aéreas Inteligentes SA shares from Australia.
-
Best Uranium stocks on the ASX
Consider these benefits and drawbacks before you invest in uranium stocks.
-
How to invest in commodities in Australia
Commodities are things that aren't much different from one another if you were to get them from other sources. Find out how to invest in them.
-
CommSec Pocket vs Raiz Invest
CommSec Pocket and Raiz Invest both micro-invest into the stock market, so what are the differences and why should you pick one over the other?
-
ASX IPOs: How to buy IPO shares in Australia
Learn what an initial public offering (IPO) is, how an IPO works and the advantages and risks of IPOs.
-
How to invest in silver in Australia
Here's a guide to your different investment options, the benefits of investing in silver and the possible risks.
-
eToro Australia review
Join the world’s largest social trading network and learn from experienced forex traders with eToro Australia.
-
The cheapest stock brokers in Australia (Jul 2024)
Find cheap stock brokerage in Australia when buying and selling shares on the ASX and other international exchanges.
Ask a question