Smart home stocks represent a unique opportunity for investors to tap into the growing smart home space, facilitating exposure to cutting-edge home technology. As a result, the smart home market is expected to explode, with more than 130 million households already equipped with at least one smart speaker, setting the stage for significant long-term expansion.
Additionally, Statista predicts that the smart home market will grow at an annual rate of 11.43% until 2028, reaching a market size of $231.6 billion. With this in mind, investors should combine strategic investment insight and expectations to assess the attractiveness of smart home stocks with significant growth potential.
That said, here are the top three smart home stocks that are well-positioned in their niches and offer healthy long-term upside for those with an appetite for risk.
NRG Energy (NRG)
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NRG Energy (New York Stock Exchange:N.R.G.) is a giant in the energy sector and has made significant inroads into the smart home space. With that acquisition, Vivint Smart Home (New York Stock Exchange:VVNT) paves the way for an integrated home services platform and advances NRG's goal of consumer-centric growth. This strategic move perfectly aligns with his NRG vision for innovative, consumer-centric solutions, introducing an integrated smart home ecosystem designed to transform home management.
Additionally, NRG's acquisition of Vivint significantly expands its customer base, serving approximately 7.3 million customers across North America. This expanded reach creates rich cross-selling opportunities by leveraging our market-leading brands and complementary distribution channels.
However, given the market headwinds, NRG has posted below-average profits over the past several quarters. However, Texas' significant customer base, attractive valuation, and cost-cutting efforts suggest improved earnings potential. As a result, Quant analysts gave NRG a Strong Buy rating, reflecting confidence in NRG's strategic direction and growth potential, and suggesting a promising future.
Amazon (AMZN)
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Amazon (NASDAQ:AMZN) has effectively transformed the smart home market through its innovative integration of Echo devices and the Alexa virtual assistant. An Echo device is essentially a central hub that controls multiple smart home gadgets, leveraging Alexa voice commands to provide a seamless experience. This synergy pushes the boundaries of what smart homes can achieve, making advanced technology available to a wide range of users. According to a press release last year, more than 500 million Alexa-enabled devices have been sold worldwide.
Additionally, Amazon is looking to expand its presence in the smart home space through strategic acquisitions. Topping the list is iRobot, which makes a smart Roomba vacuum cleaner and costs $1.7 billion.Additionally, we acquired video doorbell pioneer ring security camera innovator blink, further strengthens our portfolio of smart home devices. Amazon's constant commitment to innovation and expansion therefore underlines Amazon's ambition to redefine smart home interactions and secure its position as an industry giant.
Alphabet (GOOG, GOOGL)
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alphabet (NASDAQ:googleNASDAQ:Google) is another major technology giant driving the smart home market forward. Recently, his Google division of the company breathed new life into the Google Home app, introducing 18 groundbreaking automation features. This upgrade significantly improves user interaction with smart home devices and highlights the company's commitment to innovation.
Additionally, Alphabet's strategic merger of Nest and Google aims to combine Nest's vision for smarter, safer homes with Google's AI capabilities to enrich its smart home offerings. This collaboration promises to leverage synergies between Nest and Google's hardware teams for a more innovative future, powering cost-effective lives through advanced technology.
Alphabet stands out on the financial front, with its stock soaring 52.03% last year on the back of AI buzz. Revenue for the most recent quarter was $86.31 billion, an increase of 13.49% year over year. Furthermore, EPS of $1.64 beat estimates by 4 cents and earns a “Strong Buy” rating from TipRanks analysts, predicting an 18.82% upside potential.
On the date of publication, Muslim Farooq did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are subject to InvestorPlace.com Publishing Guidelines.