We recently compiled a list of the 12 Best Internet of Things Stocks To Buy According to Analysts. In this article, we are going to take a look at where Rambus Inc. (NASDAQ:RMBS) stands against the other IoT stocks.
Trends and Outlook for The Internet of Things Industry
According to the IOT analytics, 2024 was a poor year for the Internet of Things sector, particularly due to the headwinds from the hardware sector. As per the report published on January 15, many IoT-centric industries experienced stunted year-over-year growth. The industrial software market grew 12% year-over-year, slightly slower than the growth in 2023, whereas the industrial hardware industry experienced market declines. However, despite the slowdown the number of IoT connected devices grew around 13% year-over-year, surpassing 18 billion. In addition, the expertise spending related to IoT also increased by 10% year-over-year to reach $298 billion in 2024. The report also highlighted that the discussion on IoT remained high among leading CEO’s of the technology industry. The public relevance of the term Internet of Things remained within 30% of its all-time high in 2022.
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Moreover, another report by McKinsey & Company states that IoT can offer significant economic value potential. The report highlights that IoT can unlock $5.5 trillion to $12.6 trillion in economic value by consumer IoT products and services. McKinney & Company predicts that the most economic value of the technology will come from its deployment in industrial environments including manufacturing, health care, and other areas. Factory setting is expected to be the largest beneficiary by generating around $1.4 trillion to $3.3 trillion by 2030, or 26% of the total value. Lastly, the perceived value of IoT, the technological advancements, and the emergence of 5G in Networking are anticipated to be the prominent tailwinds for the sector.
Our Methodology
To compile the list of the 12 best Internet of Things stocks to buy according to analysts we used the Global X Internet of Things ETF. Using the ETF we aggregated a list of IoT stocks with positive analyst upside potential (at least 10%), sourced from CNN. Lastly, we ranked the stocks in ascending order of the analyst upside potential. Please note that the data was retrieved on Monday, 17th February, 2025.
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A close-up of a cutting-edge semiconductor product being assembled by a technician.
Rambus Inc. (NASDAQ:RMBS)
Analyst Upside Potential: 12.77%
Rambus Inc. (NASDAQ:RMBS) is a technology company that specializes in designing and licensing high-speed chip interface technologies and architectures for digital electronics. It focuses on making data transfer faster and safer by providing innovative hardware, software, and services across various sectors like data centers, IoT, mobile payments, and more. Its key products include DDR4 and DDR5 memory interface chips, and silicon IP that helps in connecting electronic components efficiently.
Rambus Inc. (NASDAQ:RMBS) concluded 2024 with significant achievements, positioning itself strongly for future growth. The company achieved a record quarterly product revenue of $73 million, up 37% year-over-year. During the year it introduced several new chip products including the first complete chipset for DDR5 MRDIMMs (Multiplexed Rank Dual Inline Memory Modules) and state-of-the-art DDR5 server PMICs (Power Management Integrated Circuits).
Mehdi Hosseini, an analyst at Susquehanna, raised the price target on the stock to $70 from $66, while keeping a Positive rating. The firm stated that they are encouraged by the improved EPS opportunity of Rambus Inc. (NASDAQ:RMBS), mainly due to the diversification of the DDR5 DIMM buffer chip portfolio. It is one of the best Internet of Things stocks to buy according to analysts.
Polen US SMID Company Growth Strategy stated the following regarding Rambus Inc. (NASDAQ:RMBS) in its Q4 2024 investor letter:
“Rambus Inc. (NASDAQ:RMBS) plays a foundational role in fueling innovation in the data center and server environments, serving large memory OEMs (Original Equipment Manufacturers) and hyperscalers. With its fabless model, Rambus generates robust free cash flow while maintaining a steady R&D reinvestment to sustain its industry-leading memory interface chips and silicon IP solutions. We estimate Rambus is well-positioned to compound earnings and free cash flow per share at a high-teens rate through the cycle.”
Overall RMBS ranks 9th on our list of the best IoT stocks to buy according to analysts. While we acknowledge the potential of RMBS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RMBS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
