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Investor Richard Clode Sees Potential in Internet of Things (IoT) Stocks
The Rise of RFID Technology in Supply Chain Tracking
Tech investor Richard Clode believes that while major technology trends like artificial intelligence attract a lot of attention, niche plays like the Internet of Things (IoT) offer significant potential for long-term success. Clode manages the Horizon Global Technology Leaders Fund, which is invested in IoT stocks NXP Semiconductors and Impinj. One particular IoT technology he sees as gaining momentum is radio frequency identification (RFID) for supply chain tracking. RFID uses small wireless chips to track inventory and assets, offering improved visibility and efficiency in supply chains. While it faced challenges in the past, RFID is now being embraced by companies like Walmart and UPS, who are implementing the technology on a massive scale.
The Growing Adoption of RFID Technology
Clode points out that Walmart, in particular, has mandated the use of RFID tags for all of its suppliers in various categories. This widespread adoption of RFID technology is a testament to its reliability and cost-effectiveness. Clode emphasizes that these technologies are not just theoretical concepts, but real-world solutions that are making supply chains more efficient. He believes that this specific application of IoT technology showcases the potential of the Internet of Things in practical terms, rather than being a vague and general idea.
The Dominant Players in RFID Technology
According to Clode, NXP Semiconductors and Impinj are the dominant players in the RFID chip market. NXP Semiconductors, a Dutch multinational, is best known for its automobile microchips and has a market capitalization of $58 billion. Impinj, on the other hand, focuses solely on RFID chips and has a market valuation of $2.4 billion. Clode believes that these companies will benefit from the growing adoption of RFID technology in supply chains.
Potential Investment Opportunity in NXP Semiconductors and Impinj
Clode's optimism about the future of IoT and RFID technology is reflected in the analysts' consensus price target for NXP Semiconductors and Impinj, which suggests a potential 45% upside in the next 12 months. As the demand for efficient supply chain tracking continues to grow, these companies are well-positioned to capitalize on the increasing adoption of IoT in the logistics industry. Investors looking to explore opportunities in IoT stocks may find potential in NXP Semiconductors and Impinj, given their dominance in the RFID chip market.
The Business Opportunities in RFID Technology and IoT
In the fast-paced world of technology, investor Richard Clode sees immense potential in niche plays like the Internet of Things (IoT). Specifically, he believes that radio frequency identification (RFID) technology for supply chain tracking is gaining traction and offers exciting opportunities for businesses.
The growing adoption of RFID technology, as seen in Walmart's mandate for RFID tags across its supplier base, highlights its reliability and cost-effectiveness. This real-world application showcases the tangible benefits of IoT in streamlining and enhancing supply chains. With companies like Walmart and UPS implementing RFID on a massive scale, it is clear that this technology is here to stay.
Dominating the RFID chip market are industry leaders NXP Semiconductors and Impinj. These companies, with their strong market presence and focus on RFID chips, are well-positioned to thrive as the adoption of RFID technology grows further. As the demand for efficient supply chain tracking continues to soar, these businesses stand to capitalize on the increasing use of IoT in the logistics industry.
For entrepreneurs and new businesses, this presents a compelling investment opportunity. Analysts predict a potential 45% upside for NXP Semiconductors and Impinj over the next 12 months. With their dominance in the RFID chip market and the projected growth of IoT in supply chain management, these companies offer a chance to benefit from the expanding market.
As technology evolves, the IoT and RFID technology, in particular, are proving to be game-changers in various industries. By embracing these innovative solutions, businesses can enhance their operational efficiency and gain a competitive edge in the digital age. RFID technology's rise ensures that exploring its potential within a new business can lead to significant growth and success.
Article First Published at: https://www.cnbc.com/2023/07/20/tech-investor-names-2-internet-of-things-stocks-to-own.html
