Is IoT the Future of Business?
The Internet of Things (IoT) is quickly taking shape all around us. It’s important that investors understand it so they can recognize its investing implications and opportunities. IoT is expanding the power of the internet beyond computers and smartphones to a wide range of objects, processes and environments. IoT connects devices and other items to gather valuable information and send it to the cloud for analysis or even to other connected items. This increased information is already helping businesses and individuals improve decisions, efficiency and produ​ctivity.​​

Chart for companies using the cloud for HR

  • ​Gartner estimates that there were 11.2 billion connected devices in 2018 and that number will rise to 20.4 billion by 2020.

  • When an object is connected to the internet, it can send information or receive information, or both. This capability doesn’t imply that a device has super storage or a super computer inside it; rather it means that a device can connect to super storage or a super computer.

  • Collecting and sending information require sensors that might range from temperature sensors and moisture sensors to air quality sensors and light sensors. These sensors allow us to gather data from the environment and make better decisions. Benefits can be found across all indus​tries. For example, by sensing soil moisture and accounting for potential rainfall according to weather forecasts, crops can be irrigated as needed to avoid the costly consequences of watering crops too much or too little.

  • IoT gives businesses insight into and control over the things and environments that have traditionally been beyond the reach of the internet. For the suppliers of these devices, chips and soft​ware, it may mean higher sales and for IoT users it may mean improved profitability, while those who do not adapt may see profit deterioration.


The views expressed are the views of Fred Alger Management, Inc. as of May 2019. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund shares.

Risk Disclosure: ​Investing in the stock market involves certain risks, and may not be suitable for all investors. Growth stocks tend to be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Technology companies may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies.​​

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