The Internet of Things has the potential to change the way that the world works. This new market is still in its infancy. But, GlobalData estimates that the Internet of Things (IoT) market will reach $318 billion by 2023. Once the IoT reaches critical mass, there’s a good chance that it will start to grow exponentially. This will likely occur at some point over the next decade which is exactly why investors are so excited about IoT stocks.

IoT stocks set to dominate the market.

What is the Age of Automation?

There have been several major revolutions throughout human history. In the late 1700s, we experienced the industrial revolution. More recently, we had the digital revolution which started in the 1980s. During this period, things like the internet, mobile phones, and social networks became mainstream. Over the next few decades, analysts expect that we will enter an “automation revolution”. During this revolution, thousands of tasks will be replaced by computers, machine learning and artificial intelligence. This brings us back to the IoT.

The Internet of Things is a network of smart devices that are all connected to the internet. Through the internet, these devices can “talk” with each other. They can share data, execute commands, and even make decisions. All of this data processing occurs with minimal human interaction.

A simple example of the IoT in action is a smart home. A smart home will have things like:

  • Thermostats that monitor temperature and adjust the heat/AC.
  • Roombas that patrol the floors to clean as needed.
  • A smart speaker that can control the lights and order groceries via voice control.

A smart home essentially regulates itself, with little help from the homeowner. When you start looking at the industrial sector, the applications for IoT are seemingly endless. With that said, let’s take a look at three IoT stocks that will dominate the age of automation.

IoT Stocks Set to Dominate the Age of Automation

No. 3 Amazon (Nasdaq: AMZN)

Amazon is one of the best IoT stocks because it offers the broadest portfolio of interconnected services. The company allows consumers to:

  • Order virtually any product online with two-day shipping.
  • Make commands through the ai-powered Amazon Alexa.
  • Order and pick up groceries at Whole Foods.
  • Secure their homes with Ring.

There is no other company on Earth that’s better poised to offer IoT services than Amazon. Amazon also reported a 2021 revenue of $469.82 billion and a net income of $33.36 billion. This gives it a staggering amount of free cash flow to invest in its IoT business.

On top of that, the IoT will require a massive amount of processing power. This is another area where Amazon excels. Amazon is mainly known for its retail business. But it also owns the world’s largest cloud computing business: Amazon Web Services. Amazon Web Services brought in over $18.2 billion in Q1 2022.

In typical Amazon fashion, it doesn’t just control one part of the IoT. It controls practically the entire ecosystem.

No. 2 Google (Nasdaq: GOOGl)

Another one of the best IoT stocks to consider buying is Google. Just like Amazon, Google is another company that has a staggering number of ways that it can influence the IoT market. To start, Google is essentially the world’s largest hub of information. It dominates the internet search market and is essentially a virtual gatekeeper to the internet. To quote Jeff Bezos, “Treat Google like a mountain. You can climb the mountain, but you can’t move it.”

There are already dozens of IoT-style services that are built on top of Google’s products. For example, almost all mapping systems are built on top of Google Maps. This will play a crucial role in the development of self-driving cars. In fact, Google is already a leader in this space.

Additionally, Google has also developed a suite of connected home products. This includes things like smart speakers, streaming devices, Wi-Fi, door locks, cameras, thermostats and more. Just like Amazon, Google owns an ecosystem of IoT products that will make it hard for other companies to compete.

When it comes to IoT stocks to own, Google and Amazon are in a league of their own. But they are also fairly obvious choices. This means that plenty of investors will buy them when trying to get exposure to the IoT. But, there’s one more outside-the-box IoT stock that I want to discuss…

IoT Stocks No. 1 Tesla (Nasdaq: TSLA)

As the company currently stands, Tesla shouldn’t really be included when talking about IoT stocks. However, when discussing trends like the IoT, sometimes you have to look a little bit into the future.

Elon Musk has stated that Tesla’s are not even cars. He considers them “sophisticated computers on wheels.” This is because most Teslas are equipped with features like…

  • Automatic braking with the vehicle senses a collision.
  • An autopilot driving system.
  • A parking program that allows the car to park itself.

Anyone who has ever ridden in a Tesla can testify to the “magic” of the experience. Over the next decade, Tesla will continue to perfect its already-industry-leading technology. As it does, Tesla will push the boundaries of the self-driving car industry.

Eventually, self-driving cars will take over. When this happens, cars will be able to communicate with one another, traffic lights and other drivers to make sure that no accidents occur. The nation’s highways will essentially become one massive IoT network.

Granted, Tesla probably develop a smart speaker anytime soon. But, when it comes to self-driving cars, Tesla has tons of potential to lead the industry. For this reason, it’s hard to see Tesla not being one of the best-performing IoT stocks over the long run.

Plus, Elon doesn’t even see EVs as Tesla’s future.

Tesla’s Robot

Tesla has also already shown aspirations of moving on from self-driving cars. To do this, the company is developing an autonomous humanoid robot. This robot will be able to assist humans in everyday tasks. This project is most definitely a few more years out. It could be another decade before Tesla humanoid robots are market-ready. But once it’s ready, Elon expects this robot to be able to navigate any human environment and complete thousands of different tasks.

If Tesla is successful in building this robot, it will likely lead to a mass replacement of manual laborers. After all, why keep a human on payroll to perform manual tasks when you could buy a robot once and get the tasks done for free. On the bright side, this will save companies billions in labor costs. But it will also throw millions of people out of work. It goes without saying that this type of revolution will change the world as we know it.

It’s no wonder that Elon Musk thinks that this opportunity could be bigger for Tesla than electric vehicles are. I hope you’ve found this article valuable in learning about three IoT stocks that should dominate the age of automation. Please remember that I’m not a financial advisor and am just offering my own research and commentary. As usual, please base all investment decisions on your own due diligence.