“We can’t keep them on hand. They come in and they go right out. Customers keep calling for more too.”
That’s what a mid-level manager of the largest electronics parts suppliers in the world told me two days ago.
His company ships all the tiny parts from processors to antenna that make smartphones and everything electronic work around the world.
He’s right in the middle of the mobile data boom and he says it’s getting more active every day.
If you’ve been reading the Profit Alert over the last few days you know why.
The Biggest Winners (So Far)
The opportunities in data centers were good, but we determined at this stage, they’re not the best.
They were, however, great examples of the kind of growth we’re looking at in all this. Amazon’s data center business was booming and data center pure-plays like Akamai Technologies (AKAM) were soaring.
Today we’re going to look at the other end of the mobile data market -- the end users.
The end users are the smart phones, tablets, laptops, smart TV’s and dozens of more products like thermostats, refrigerators, this smart egg tray which can can automatically order more eggs when it gets low, and everything else which is going online as part of the massive Internet of Things (IoT) trend.
The end user part of the mobile data market is looking like one of the most appealing parts to be putting your money now.
The growth is just going to be massive.
According to a recent study by The Trend Report, there are currently 15 billion devices hooked up to the Internet now. The total number of devices will grow to more than 50 billion by 2020.
So over the next five years 35 billion more devices will come online. That’s going to take a lot of chips, connections, and data to make it all work and why it really matters to investors now.
It’s already starting to play out too. One of the most direct plays on this is will be the chips that process all the data and make it all run smoothly run.
You see, you don’t need a powerful and expensive chip like you have in your computer and smartphone that can provide you with video, music, e-mail, and everything else you want. You need a chip that will do enough to get the job done. Like just powerful enough to count the eggs left and communicate that information to a central receiver.
There are companies specifically focused on this market and the early are rocketing higher.
One of the big winners so far has been Skyworks Solutions (SWKS).
The company makes the chips and other products necessary for smartphones and smart devices to connect with the Internet.
According to Skyworks’ annual report, its customers include a who’s who of the technology and consumer products world.
Skyworks specifically states its customers include, “Cisco, Ericsson, Foxconn, Fujitsu, General Electric, Google, Honeywell, HTC, Huawei, Landis & Gyr, Lenovo, LG Electronics, Nest, Netgear, Nokia, Northrop Grumman, Rockwell Collins, Samsung, [etc.]”
They’re all the big players in the outgrowth of the mobile data boom and they’re turning to companies like Skyworks for the processing power and connectivity for many of their smart devices.
Wall Street is starting to catch on to how big this is going to be too. Skyworks shares are up 343% in the past two years.
It’s not just Skyworks though. Demand is so great for all of these chips and materials to power the web-enabled Internet of Things boom, many of Skyworks’ competitors are doing extremely well.
For example, NXP Semiconductors (NXPI) shares have soared 176% in the last two years.
And there’s Avago Technologies (AVGO) which is right there too. Its shares are up 239% in the past two years.
These are the types of gains we expect to see in the years ahead for many of the companies in the mobile data boom of which the IoT will be a major driving force.
The question now is, will it lift these stocks specifically?
It’s tough to say after such massive runs they’ve had. But there’s an answer to that in way I’m recommending to get in on all this growth now.
More Growth , More Income
Top technologies are ensuring they’re going to have a foot in the IoT build-out and the are solid players in the mobile data boom.
Mergers and acquisitions are accelerating at a blistering pace.
Last year there were $14.3 billion in acquisitions of 62 IoT-related companies according to 451 Research.
So far this year they’ve tracked $14.8 billion worth of acquisitions. That’s more in half a year than all of last year and a clear indicator this sector is accelerating fast.
We expect there will be many more acquisitions because the big tech companies can’t afford to miss out on this. Again, there are currently 15 billion devices connected to the Internet. In five years there will be 50 billion.
That’s growth big companies can’t and won’t miss out on and it’s why I’m recommending riding the big companies when the price is right in order to get in on the global device build out.
For example, just yesterday I published the latest recommendation to Advanced Wealth Letter readers on the one company positioned perfectly to ride this boom all the way to the top.
Better yet, due to a recent financial misstep (which caused Wall Street to slash its forecast for expected earnings by a mere 7%), it’s shares are down 23% from past highs.
As a result, this leading tech company which is going to play a huge role in the buildout of the mobile data boom is trading at its cheapest valuation ever and is paying out it’s highest dividend yield ever too.
As my friend said, this boom is growing every day. Every major tech company is buying up all the hardware and the companies making the hardware as fast as they can. And it’s creating huge opportunities everywhere.
In five years when there are 50 billion smart devices around the world, you’re going to regret not getting in now.