We live at a time where almost everything can connect to the internet from light bulbs to cars, TVs, etc. the size and scale of IoT devices make investing in IoT stocks quite complicated. However, there is a simple way to go around investing in these stocks by targeting large-cap companies that have well defined IoT business units that are set to grow as the movement grows. Below we will have a look at two IoT stocks to pay attention to in 2020.
Cisco Systems (NASDAQ: CSCO) – An Old, New Internet of Things Stock
Cisco Systems, Inc is an American technology company that was founded in 1984 by Leonard Bosack and Sandy Lerner. The company has its headquarters in San Jose, California, and employs over 74,200 workers.
In the networking solutions sector, Cisco is the largest hardware and software supplier in the world. Its infrastructure platform consists of hardware and software products for routing, wireless applications, switching, and data centers.
Its applications platform consists of analytics, collaborations, and Internet of Things (IoT) products.
Then there is the security segment that contains the company’s firewall and software-defined security products. Cisco also offers advanced service and technical support as part of its services.
Cisco’s vast collection of hardware products is complemented by software-defined networking solutions, intent-based networking, and analytics.
On top of growing software and services, the company’s revenue model is focused on increasing subscriptions and recurring sales.
Why CSCO Is One IoT Stock To Buy In 2020
Last year wasn’t a good year for Cisco Systems as the company’s shares had almost stagnated from where they were in 2018.
Interestingly, over the past six months, CSCO stocks (NASDAQ: CSCO) have plunged from the high of $50 to around $47 where they currently sit.
The dismal performance has seen some analyst jump to warn investors of dark days ahead while some advice we should proceed with caution.
Others have even wondered if Cisco Systems is the next IBM (NYSE: IBM), a legacy tech company that has been left behind.
Part of the concerns arises from the fact that Cisco recently lost its place on
Gartner’s “Magic Quadrant” to Aruba Networks, a privately held company.
However, with several acquisitions under its belt and the coming of 5G, Cisco looks ready to bounce, making it an attractive tech stock to buy.
Elastic (NYSE: ESTC)— An Internet of Things Stock
Last week, a number of law firms announced that they would investigate Elastic N.V on behalf of aggrieved shareholders over a possible breach of federal securities laws. Its stock quote hit all time highs in 2019 before dropping off. As other internet of things (IoT) major players have emerged to add billions to their market caps (like Microsoft), Elastic has been a smaller market mover.
On December 4, the company had announced a much lower-than-expected billings growth of 41% year-on-year, as compared to 51% that was announced in a prior quarter year-on-year. Elastic’s Chief Financial Officer had said that the company had suffered “some delays in our federal government business, as some deals moved out of the month of October.”
The magnitude of these deals that were moved was not indicated in the earnings conference call where but it was said to be large enough to affect the billings negatively. This led to a 19% drop in share price.
Before the drop, Elastic had a run of success that put it on many’s IoT stocks to watch list, as well as a tech stock with high upside. It was a bit of a shock to the system, but the market is new. Iot products have seen high growth but maintaining that isn’t always easy. Elastic will need to innovate, continuing to push its own emerging technologies forward and into a global market hungry for new IoT solutions. The internet of things is here to stay, we just need to see in which ways it becomes a legitimate money maker.
When investing in a tech stock, the goal is to find a stock that matches a technology who can bear more market growth and revenue. With 5G coming to major cell providers, and AI growing amongst players, in which machines can talk to each other, the internet of things (IoT) space remains hot. The internet of things IoT can power a home, a business, or connects devices and different technologies. Each IoT offering is different but with technology and internet companies searching to provide consumer value, IoT makes it so combinations of products and services can compel enterprise and personal buyers.
IoT products make for interesting tech stocks to buy to buy at the moment as the world gets more connected. As emerging markets join the modern world, Elastic represents one of a few interesting stocks to watch and a tech stock with high upside in a global market. Iot solutions will continue to be in demand as AI and other emerging technologies of the 21st century find a marketplace. Internet of things stock buying represents a way for you to capitalize on this new opportunity.
As started before, when researching a stock to buy, make sure you understand all risks associated with securities. Even a tech stock like Elastic which has proven itself in its industry represents a financial risk in buying.