Forget About TSLA and RIVN – The Big Money Is in Smart Buildings and Homes

By: September 14, 2023

While smart buildings and homes are two different sectors due to their unique challenges, many of the MegaTrend companies that are involved have significant overlapping business models. For example, as you can see below, smart homes today are driven by a la carte devices in particular sectors.

Source: Statista

So, it’s no surprise to see the consumer Goliaths winning this round – I’m talking Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), and Apple (NASDAQ: AAPL). All three of them have strong brand recognition, and they’re all involved in the various devices people are retrofitting into their homes. They’re also working with builders to make smart homes from scratch.

As a matter of fact, the three of them founded Project CHIP in 2021 to start certifying manufacturers’ compatible devices.

The Contrarian Trend Is in Place

While the urbanization MegaTrend may seem a bit contrary given the fact that many workers have opted for remote or hybrid work, that doesn’t mean people aren’t living in cities.

For example, while the tech boom gutted San Francisco of affordable housing for working class and middle class, non-tech workers, it has given a boost to nearby cities, like Oakland and other East Bay cities, where workers can live affordably with access to San Francisco and the Silicon Valley. Plus, developers are eyeing these “second cities” as a great place to put on new smart buildings or upgrade older properties.

Source: Global Market Insights

The winners in the smart building sector aren’t the same as the consumer tech companies that are dominating the residential sector.

Commercial buildings have their “old reliables,” but they’re not the companies that most people think about – unless you’re a commercial property owner.

Some of the major players are Honeywell (NYSE: HON), ABB (NYSE: ABB), Schneider Electric (OTC: SBGSY), Johnson Controls (NYSE: JCI), and IBM (NYSE: IBM).

The exciting aspect is that we’re on the front end of this major trend. It will be playing out as we get closer to 2030. Right now, we’re focused on the smart home side as it builds momentum, but the commercial will be ramping up very soon.

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