During the pandemic, there was an incredible surge in home improvement. This isn’t a huge surprise. Since people were quarantined at home for months on end, they wanted it to be comfortable. Additionally, more time around the house freed up more time to fix the shutters and repaint the back room. In 2021, investors anticipate this trend going a step further. In anticipation, they’re contemplating adding smart home stocks to their portfolios.
It feels like the concept of a “smart home” has been around for a while. But, for many years, it just wasn’t a necessity. Why do you need to yell at the house to turn the air down when you can just click a button on the wall? However, thanks to improved technology at cheaper prices, the market might finally be reaching a tipping point. The global smart home market is currently valued at $79.13 billion. Over the next five years, it’s expected to grow at 25.3% CAGR to reach $313.15 billion.
Smart homes require a lot of different pieces. For example, they need some type of central portal or application where you can control everything. They also need internet-connected appliances for security, entertainment, HVAC, etc. In total, there are 6 main product categories for smart homes. These are comfort/lighting, control/connectivity, energy management, home entertainment, security, and smart appliances.
When it comes to identifying smart home companies, there are a few that have a distinct advantage. In this article, we’re going to take a look at the three best smart home stocks to buy.
NOTE: I’m not a financial advisor and am just offering my own research and commentary. Please do your own due diligence before making any investment decisions.
Top 3 Smart Home Stocks to Buy
No. 3 Amazon (Nasdaq: AMZN)
Amazon has a clear edge when compared to other smart home stocks. For starters, it’s Amazon. It spends more on research and development each year than most companies will earn in revenue. This gives it huge a leg up when it comes to creating and improving smart home technology.
Additionally, consumers already use Amazon for plenty of other services. People shop for goods on Amazon.com. They head to Amazon-owned Whole Foods to buy groceries. At the end of the day, they flop on the couch and turn on Amazon Prime. Amazon’s Echo acts as the central hub that connects all of these activities. Not to mention that the Echo only costs $60. This makes it more than affordable for most families. Amazon has already crossed the threshold of 100 million Alexa-powered devices sold.
The Echo itself isn’t necessarily what makes Amazon one of the best smart home stocks. It’…….