New tech hardware companies are popping up left and right to tackle the growing demand for connected devices. The global value of hardware is projected to grow from $192 billion in 2017 to $375 billion by 2022, according to a report from Digital-Vendors.com. If you are looking for new stock ideas in this rapidly growing market, we’ll introduce you to four leading tech hardware stocks you can buy right now. These companies have favorable growth dynamics, leading market positions and profitable businesses with high operating margins. Each company has its own strengths and weaknesses, but all four have proven track records as standalone investments and as part of mutual funds or ETFs such If you’re interested in buying any of these stocks or adding them to your portfolio, keep reading for an in-depth look at each one
Ambarella
You may not have heard of Ambarella, but you have seen its products. The company’s image processing chips are used in cameras and drones sold by GoPro and DJI, two of the best-known consumer electronics companies. Ambarella’s chips process the image sensors and video footage from the cameras, allowing users to control the devices remotely. Digital-Vendors.com forecasts that the market for hardware such as Ambarella’s will experience annual growth of 13.5% between 2017 and 2022. The company’s chips are already available for all major hardware platforms, including Apple and Android smartphones. Ambarella’s stock prices have increased by an average of 66% per year since the company went public in 2014. Starting from an initial price of $15, the stock has risen to an all-time high of $165. The company’s shares are currently trading at $162 a piece, which translates to a price-to-earnings ratio of 44.
Intel
Intel is the world’s largest chipmaker, dominating the semiconductor industry with its processors and integrated circuits. Intel derives the majority of revenue from sales of its processors, which are installed in computing devices of all types and sold to consumers, businesses and governments. The company has a strong track record as a tech hardware stock, with shares rising by an average of 16% per year since its initial public offering (IPO) in 1979. Intel’s business has performed well in recent years, helped by a thriving data center business. Data center revenue grew by an average of 22% each year from 2011 to 2016, and is expected to maintain a sustained rate of growth over the next five years. The company’s revenue growth has also been supported by its expansion into new markets, including autonomous cars, connected devices and artificial intelligence.
Marvell Technology
Marvell is a leading provider of computer chips used to store, manage and process data. Its chips are used in a wide range of computers and data center products, including servers, storage devices, network equipment and IoT devices. The company has an impressive record as a tech hardware stock, with shares rising by an average of 17% per year since going public in 1995. Marvell’s revenue has increased by an average of 16% every year since 2010, and the company is expected to grow at a modest rate of 4% per year over the next five years. Marvell derives most of its revenue from sales of NAND, or flash memory, chips used in memory storage and smartphones. The demand for flash memory is projected to grow at a rate of 7% per year between 2017 and 2022.
Micron Technology
Micron Technology is a leading manufacturer of computer memory and flash memory, and a smaller producer of dynamic random access memory (DRAM) chips. Micron’s most profitable business is manufacturing and selling DRAM chips, which are used in computers, servers, smartphones and other devices. The company also produces NAND chips, which are used in flash memory storage, and NOR memory chips. Micron’s stock has increased by an average of 14% per year since its initial public offering (IPO) in 1986. The company’s revenue has grown at a healthy rate of 5% per year since 2010, and is expected to rise at a similar rate over the next five years. Micron has been hit hard by the trade war between the U.S. and China, as the country has been one of its biggest customers. The Chinese government has imposed tariffs on Micron products, which has negatively impacted sales in the country.
Nvidia
Nvidia is one of the leading providers of graphics processing units (GPUs) for computer games. The company also produces GPUs for artificial intelligence, autonomous cars, data centers and other products. Nvidia’s core business generated an average of 11% annual growth between 2010 and 2017, and is projected to rise at a similar rate over the next five years. The company’s revenue has grown by an average of 23% per year since 2010, and revenue is expected to rise at a similar rate over the next five years. Nvidia derives most of its revenue from sales of GPU units used in computer games, which account for 75% of total revenue. The gaming business has grown at an average rate of 10% per year since 2010, and is projected to grow at a similar rate over the next five years.
Conclusion
Over the last decade, tech hardware has become a bigger and bigger part of our daily lives. The demand for connected devices is rising as new technologies such as AI, 5G and cloud computing become integrated into daily life. The markets for these technologies are projected to grow at a rapid rate in the coming years, making now a great time to invest in hardware companies. If you are looking for new stock ideas, these four tech hardware stocks are a great place to start. Each company has its own distinct strengths, and all four have proven track records as standalone investments and as part of mutual funds or ETFs. If you’re interested in buying any of these stocks or adding them to your portfolio, keep reading for an in-depth look at each one.
