Three "Internet Of Things" Stocks To Buy Now

Semiconductor stocks have been struggling to generate positive momentum recently, but there are a number of new secular trends which investors are looking to remain exposed to in the long-term. Of these, easily the most exciting for certain niche chipmakers is the Internet of Things.

For those that don’t know, the Internet of Things is 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.

For example, consumer-level IoT products include things like Amazon’s (AMZN - Free 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.

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. The volatility we are seeing in chipmakers right now comes from Wall Street’s efforts to call an end to an extended cycle of strength for the cycle, but over time, we could see IoT-focused semiconductor firms maintain their growth as the number of connected devices worldwide continues to expand rapidly.

With that said, we’ve found three stocks which have been flagged by the Zacks Rank that could be poised for further IoT growth soon.

1. SMART Global Holdings, Inc. (SGH - Free Report)

SMART Global is a specialty designer of memory solutions. The firm has an impressive book of over 250 clients from around the world—most of the major OEMs. SMART just reported another impressive beat-and-raise quarter a few weeks ago, and although much of its recent success is owed to wins on the server side, it certainly has exposure to IoT applications.

Notably, SMART serves IoT-adjacent industries like automotive and cloud computing. The stock is currently sporting a Zacks Rank #2 (Buy) and trades at a measly 4.6x earnings. As Zacks Strategist Kevin Cook pointed out in a recent “Bull of the Day” profile for Smart, this low valuation is modeled similarly to memory peer Micron (MU - Free Report) —but that should not really be the case.

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