Businesses are increasingly dependent on gadgets that support Internet of Things (IoT) technology to facilitate hybrid-working models. IoT is also being used in the manufacturing and industrial sectors, and increased demand for cloud solutions and smart devices in the 5G era should also increase the demand for IoT powered products in the coming months. Consequently, we think ABB (ABB), Skyworks (SWKS), and Qorvo (NASDAQ:QRVO) should benefit significantly. Let’s take a closer look at these names.Many businesses are planning to continue, at least in-part, with remote working arrangements even after the pandemic is over given its benefits and the huge investments they made in remote connectivity during the pandemic. This is expected to buoy demand for gadgets that support Internet of Things (IoT) technology. Furthermore, the commercial deployment of 5G technology is expected to create a high demand for secure IoT devices and tech solutions in the coming months. Manufacturing and industrial sectors are also increasingly using IoT technology.
The global IoT market is expected to grow at a 10.5% CAGR over the next five years to reach $1.39 trillion by 2026. Investor optimism about this industry is evident in the Global X Internet of Things Thematic ETF’s (SNSR) 51.2% returns over the past year. This compares to the SPDR S&P 500 Trust ETF’s (SPY) 40.1% gains over this period.
Given this backdrop, we think it’s wise to invest in ABB Ltd (ABB), Skyworks Solutions, Inc. (NASDAQ:SWKS) and Qorvo, Inc. (QRVO) because these companies are positioned nicely to benefit from the growing demand for IoT technology.