Image source: Getty Images.

Investors will be forgiven for wanting to give up on Sierra Wireless (NASDAQ:SWIR). The Internet of Things (IoT) pure play is one of the top embedded-module makers in the world. Its technology is used to connect Tesla's vehicles to the internet and many other devices boast its machine-to-machine modules. But the company has failed to deliver for its investors, despite all of its potential.

Sierra Wireless' stock is down 32% over the past 12 months and is trading at a massive premium of 112 times its current earnings (the tech industry average is about 25 times earnings). 

Investors looking for better (and cheaper) ways to cash in on the $7.1 trillion IoT market need to look no further than NVIDIA (NASDAQ:NVDA) and General Electric (NYSE:GE). They aren't exact comparisons to Sierra's machine-to-machine connection business, but these stocks are certainly better buys.

NVIDIA's growing IoT angle

Driverless cars are NVIDIA's key Internet of Things angle. The company is already on the second version of its Drive PX supercomputer for driverless cars, which gives vehicles situational awareness and allows them to process complex visual data around them. Drive PX2 is already used by 80 automakers and tier 1 suppliers. 

The company also recently partnered with Chinese tech giant Baidu to launch a cloud-to-car autonomous-car platform that original equipment manufacturers (OEMs) can implement into their vehicles. Baidu is already a leader in the driverless-car world and has bold plans to bring autonomous vehicles to Chinese streets in the next two years. 

Investors should keep in mind that NVIDIA made only about 6.4% of last year's total revenue from its automotive segment. So this isn't a pure IoT play by any means.

But the company's stock price has skyrocketed 179% over the past 12 months and currently trades at just 40 times its earnings (much lower than Sierra's P/E ratio of 112).

The driverless-car market will be worth an estimated $42 billion by 2025, and NVIDIA is already positioning itself to benefit from this massive IoT segment. 

GE's Industrial Internet can't be overlooked

I wrote recently that I've been overlooking the massive potential from IoT in the industrial sector, and other investors shouldn't make the same mistake. In fact, the top industry that's seeing revenue gains of more than 30% from the IoT is industrial manufacturing, according to BI Intelligence. And GE is starting to take center stage in all of this. 

The company has focused its attention on bringing industrial production and maintenance into the future by incorporating more sensors and using its own Predix analytics software into its industrial equipment.

GE's Predix Industrial Internet software analyzes industrial equipment in real time and determines when it needs to be serviced (which reduces downtime) and how it can be used more efficiently (turning equipment off or reducing energy at certain times) to save GE's customers money. 

The company already earned $6 billion from the software last year and expects to bring in $10 billion from it by 2020. GE believes that the Industrial Internet will add $10 to $15 trillion to the global GDP over the next 20 years.

If all that weren't enough, the company's P/E ratio is just 26 (the average for the industrial sector is 37) and its stock is up more than 25% over the past year.

The bottom line

Sierra Wireless' prospects seem to have fizzled out, while NVIDIA's and GE's IoT potential is just taking root. That doesn't mean Sierra can't become a solid investment later, but investors who are looking for cheaper IoT plays that are already bringing their shareholders solid returns should certainly give NVIDIA and GE a hard look. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.