Last Updated on August 3, 2021 by Henry John
Technology changes the way we spend our days and consequentially, new technologies drive the growth rate of the tech sector. As we approach 2021, 5G technology, which has for years been under development, is seemingly going to drive the growth rate of the tech sector to a great extent next year.
Best 5G Stocks for 2021 with great growth potentials
There are lots of opportunities, for growth-seeking investors, in the 5G space. Phone makers like Apple, for instance, are building their 2021 strategy around 5G, there are the 5G IoT and chip market, all of which are huge.
How to invest in 5G: 5 Strategic ways
Among the many ways to approach investing in the 5G space, picking out really good small-cap 5G stocks could be even more rewarding than the established large-cap stocks like Apple.
If you are looking for Small-Cap 5G stocks under $5 billion to invest in, here are 10 5G small-cap stocks to consider:
1. EXFO Inc.
EXFO Inc. provides test, monitoring and analytics solutions for fixed and mobile communications service providers, web-scale operators, and network equipment.
It offers field network testing products, such as copper/DSL testing, dispersion analysis, fiber inspection, light sources, live fiber detection, network protocol testing, optical fiber multimeter, optical loss testing, optical time domain reflectometry and iOLM, power meters, spectral testing, test function virtualization, and test reporting and automation products, as well as modular test platforms.
The company also provides lab and manufacturing testing network protocol testing products, network simulation and load testing products, optical benchtop kits, optical communication analyzers, optical light sources, optical power meters, optical spectrum analyzers, switch and utility modules, test platforms, variable attenuators, tunable filters, optical component testers, and tunable sources; and service assurance products, such as fiber monitoring, network probe, network topology management, monitoring and troubleshooting, RAN optimization, and real-time analytics.
In addition, it offers mobile portfolio that consists of network simulators and optical radio frequency test solutions for turning up and troubleshooting fiber-based mobile networks; PC-centric and open-ended platforms with cloud-based software applications; and Internet protocol assurance services, as well as monitoring services for 2G, 3G, 4G/LTE, and 5G mobile networks.
The company sells products through its direct sales force, sales representatives, and distributors in the Americas, Europe, the Middle-East, Africa, and the Asia-Pacific.
EXFO Inc. was founded in 1985 and is headquartered in QuÃ©bec City, Canada.
2. Boingo Wireless
Boingo Wireless, Inc., together with its subsidiaries, provides wireless connectivity solutions for smartphones, tablets, laptops, wearables, and other wireless-enabled consumer devices worldwide.
It offers distributed antenna systems and small cell networks at managed and operated locations; high-speed Wi-Fi services for residential consumers on military bases and at multifamily properties; and wholesale Wi-Fi services to network operators, device manufacturers, technology companies, enterprise software and services companies, venue operators, and financial services companies, as well as retail Internet access services.
The company also provides advertising services for advertisers to reach consumers with sponsored Wi-Fi access, promotional programs, and display advertising.
It serves largest carriers, telecommunications service providers, global consumer brands, and property owners, as well as troops stationed at military bases and Internet savvy consumers.
The company was formerly known as Project Mammoth, Inc. and changed its name to Boingo Wireless, Inc. in October 2001.
Boingo Wireless, Inc. was founded in 2001 and is headquartered in Los Angeles, California.
3. Ceragon Networks
Ceragon Networks Ltd. provides wireless backhaul solutions that enable cellular operators and other wireless service providers to deliver voice and data services.
Its wireless backhaul solutions use microwave and millimeter wave technology to transfer telecommunication traffic between base stations, small sells, and the core of the service provider’s network.
The company also offers wireless fronthaul solutions that use microwave technology for ultra-high speed, ultra-low latency communication for wireless 5G and 4G base stations.
In addition, it provides IP-20 all-outdoor solutions, such as IP-20C, IP-20C-HP, IP-20S, IP-20E, and IP-20V; IP-20 split-mount/all-indoor solutions comprising IP-20N/IP-20A, IP-20GX, IP-20F, and IP-20G; and IP-50 disaggregated solutions, including IP-50E, IP-50C, and IP-50FX for various short-haul, long-haul, fronthaul, and enterprise access applications.
Further, the company offers network management system; and network and radio planning, site survey, solutions development, installation, network auditing and optimization, maintenance, training, and other services.
It provides its services to smart-phone applications, such as internet browsing, social networking, image sharing, music, and video applications; oil and gas companies; public safety organizations; business and public institutions; broadcasters; energy utilities; and private communications networks.
The company sells its products through direct sales, original equipment manufacturers, resellers, distributors, and system integrators.
It operates in North America, Europe, Africa, the Asia Pacific, the Middle East, India, and Latin America.
The company was formerly known as Giganet Ltd. and changed its name to Ceragon Networks Ltd. in September 2000.
Ceragon Networks Ltd. was founded in 1996 and is headquartered in Tel Aviv, Israel.
4. CEVA Inc
CEVA, Inc. operates as a licensor of wireless connectivity and smart sensing platforms to semiconductor and original equipment manufacturer (OEM) companies worldwide.
It designs and licenses various digital signal processors, AI processors, wireless platforms, and complementary software for sensor fusion, image enhancement, computer vision, voice input, and artificial intelligence (AI).
The company licenses a family of signal processing intellectual properties (IPs), including DSP-based platforms for 5G baseband processing in mobile and infrastructure; imaging and computer vision for any camera-enabled device; audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets; sensor fusion software and IMU solutions for AR/VR, robotics, remote controls, and IoT; AI processors capable of handling the gamut of neural network workload and on-device; IPs for Bluetooth, Wi-Fi 4/5/6, and NB-IoT.
Its technologies are licensed to companies, which design, manufacture, market, and sell application-specific integrated circuits and application-specific standard products to wireless, consumer electronics, and automotive companies for incorporation into various end products.
The company delivers its DSP cores, platforms, and AI processors in the form of a hardware description language definition; and offers development platforms, software development kits, and software debug tools that facilitate system design, debug, and software development.
CEVA, Inc. licenses its technology through a direct sales force.
The company was formerly known as ParthusCeva, Inc. and changed its name to CEVA, Inc. in December 2003.
CEVA, Inc. was founded in 1999 and is headquartered in Mountain View, California.
InterDigital, Inc. designs and develops technologies that enable and enhance wireless communications in the United States and internationally.
It provides technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks.
The company develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G NR, LTE-Advanced, and cellular Internet of Things (IoT) areas, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products.
It also provides video coding and transmission technologies; and engages in the research and development of artificial intelligence.
The company’s patented technologies are used in various products that include cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, which comprise base stations; components, dongles, and modules for wireless devices; and IoT devices and software platforms.
As of December 31, 2019, it had a portfolio of approximately 32,000 patents and patent applications related to wireless communications, video encoding, display technology, and other areas.
The company was founded in 1972 and is headquartered in Wilmington, Delaware.
MasTec, Inc., an infrastructure construction company, provides engineering, building, installation, maintenance, and upgrade services for communications, energy, utility, and other infrastructure primarily in the United States and Canada.
It operates through five segments: Communications, Oil and Gas, Electrical Transmission, Power Generation and Industrial, and Other.
The company builds underground and overhead distribution systems, including trenches, conduits, cell towers, cable, and power lines, which provide wireless and wireline/fiber communications; natural gas, crude oil, and refined product transport pipelines; electrical power generation, transmission, and distribution systems; power generation infrastructure, such as renewable energy; heavy industrial plants; compressor and pump stations, and treatment plants; water and sewer infrastructure, including water pipelines; and other civil construction infrastructure.
It also installs electrical and other energy distribution and transmission systems, power generation facilities, buried and aerial fiber optic and other cables, and satellite dishes, as well as home automation and energy management solutions.
In addition, the company offers maintenance and upgrade support services comprising maintenance of customers’ distribution facilities, networks, and infrastructure, including natural gas and petroleum pipeline, communications, electrical distribution and transmission, power generation, and heavy civil infrastructure; emergency services for accidents or storm damage; and routine replacements and upgrades to overhauls.
Its customers include public and private energy providers, pipeline operators, wireless and wireline/fiber service providers, broadband operators, install-to-the-home service providers, and government entities.
The company was founded in 1929 and is headquartered in Coral Gables, Florida.
7. Sequans Communication
Sequans Communications S.A. develops and provides 5G and 4G chips and modules for massive, broadband, and critical Internet of Things (IoT) markets.
For 5G/4G massive IoT applications, the company provides a comprehensive product portfolio based on its flagship Monarch LTE-M/NB-IoT and Calliope Cat 1 chip platforms featuring low power consumption, a set of integrated functionalities, and deployment capability.
For 5G/4G broadband and critical IoT applications, Sequans Communications S.A. offers a product portfolio based on its Cassiopeia Cat 4/Cat 6 4G and high-end Taurus 5G chip platforms optimized for residential, enterprise, and industrial applications.
The company was founded in 2003 and is headquartered in Paris, France with additional offices in the United States, the United Kingdom, Israel, Hong Kong, Singapore, Taiwan, and South Korea.
8. Casa Systems
Casa Systems, Inc., a communications technology company, provides solutions for next-generation centralized, distributed, and virtualized architectures for cable broadband, fixed-line broadband, and wireless networks in North America, Latin America, the Asia-Pacific, Europe, the Middle East, and Africa.
It offers converged cable access platforms; wireless network core products, such as virtual evolved packet and 5G core products, and security and wireless gateways, as well as small cell solutions and fixed wireless access devices; and optical access solutions, virtualized broadband network gateway router and multiservice routers, fiber-to-the-distribution-point devices, and residential broadband gateways; and machine-to-machine and industrial internet of things routers.
The company was founded in 2003 and is headquartered in Andover, Massachusetts.
9. Inseego Corp.
Inseego Corp. engages in the design and development of mobile, Internet of Things (IoT), and cloud solutions for large enterprise verticals, service providers, and small and medium-sized businesses worldwide.
The company provides wireless 3G, 4G, and 5G hardware products for vertical markets, including private LTE/5G networks, First responders network authority/Firstnet, SD-WAN, telematics, remote monitoring and surveillance, and fixed wireless access and mobile broadband devices.
Its products include 4G and 5G fixed wireless routers and gateways, and mobile hotspots, and wireless gateways and routers for IIoT applications, Gb speed 4G LTE hotspots and USB modems, integrated telematics, and mobile tracking hardware devices, which are supported by applications software and cloud services designed to enable customers to analyze data insights and configure/manage their hardware remotely.
The company also sells software-as-a-service (SaaS), software, and services solutions in various mobile and industrial IoT vertical markets comprising fleet management, vehicle telematics, aviation telematics, usage-based insurance, stolen vehicle recovery, asset tracking, monitoring, business connectivity, and subscription management.
Its SaaS delivery platforms include Ctrack platforms, which provide fleet, vehicle, aviation, asset, and other telematics applications; and Device Management Solutions, a hosted SaaS platform that helps organizations in managing the selection, deployment, and spend of their wireless assets by helping them to save money on personnel and telecom expenses.
Inseego Corp. was founded in 1996 and is headquartered in San Diego, California.
10. Wireless Telecom
Wireless Telecom Group, Inc., together with its subsidiaries, designs, develops, manufactures, and markets radio frequency (RF) and microwave devices in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.
The company operates in three segments: Network Solutions, Test and Measurement, and Embedded Solutions.
The Network Solutions segment designs and manufactures RF components and integrated subsystems, including low passive intermodulation radio frequency and microwave products used in small cell deployments, distributed antenna systems, in-building wireless solutions, and cellular base-stations.
This segment also provides power combiners, directional couplers, attenuators, terminators, and filters for broadband applications to support commercial in-building wireless networks, public safety networks, rail and transportation deployments, corrosive salt/fog environment build-outs, and global positioning system (GPS) signal distribution; and GPS digital repeaters and splitters for cellular timing synchronization, as well as a passive systems monitor for real-time diagnostics of an in-building distributed antenna system.
The Test and Measurement segment offers power meters, power sensors, voltmeters, and audio and modulation analyzers for radar, avionics, electronic warfare, electromagnetic interference compatibility, and satellite and wireless communications applications; and noise generation instruments, calibrated noise sources, noise modules, and diodes.
The Embedded Solutions segment provides embedded signal processing and radio frequency modules; and long term evolution physical layer and stack software for 4G and 5G mobile network applications.
The company markets its products under the Boonton, Microlab, Noisecom, and CommAgility brands through its in-house sales force, manufacturers’ representatives, and distributors.
Wireless Telecom Group, Inc. was founded in 1985 and is headquartered in Parsippany, New Jersey.
In this article, we will be looking at the 12 best 5G stocks to invest in right now. To skip our detailed analysis of these stocks and the 5G industry, you can go directly to see the 5 Best 5G Stocks To Invest In Right Now.
The 5G industry continues to thrive with its potential to shape the future of global connectivity. During the 2021 Tokyo Olympics, Japan demonstrated its 5G technology with its 5G network-powered speedy facial recognition ID. The technology was used to check for security and at the same time, fuel Toyota Motor Corporation's (NYSE: TM) e-Palette vehicles to transport athletes around the Olympic Village.
Another example of countries developing in the 5G industry are Hong Kong with its China Mobile Limited and Beijing with its China Broadcasting Network Ltd. In January 2021, the companies announced a collaboration to build 400,000 700 MHz 5G base stations in China by the end of 2021. While, according to research from JPMorgan, the North American 5G market will surpass $180 billion by 2030.
Some of the notable 5G stocks to invest in right now are Verizon Communications Inc. (NYSE: VZ), Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC), Apple Inc. (NASDAQ: AAPL), and Nokia Corporation (NYSE: NOK).
One of the pioneer 5G companies in the US is telecom giant Verizon Communications Inc. (NYSE: VZ). In 2015, Verizon Communications Inc. (NYSE: VZ) launched the first 5G Technology Forum (5GTF), which brought together industry leaders such as Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC), and Samsung Electronics Co., Ltd. to develop and deploy 5G technology. In the second quarter of 2021, Verizon Communications Inc.'s (NYSE: VZ) revenue grew 10.89% to $33.76 billion, driven by strong demand in 5G phone and wireless service adoption.
According to JPMorgan data, in October 2020, Apple Inc. (NASDAQ: AAPL) unveiled the first line of iPhones to support 5G connectivity, accounting for 47% of the 5G smartphone market. In July 2021, Apple Inc. (NASDAQ: AAPL) announced that all its scheduled iPhone releases for 2022 will be 5G-capable. Shares of Apple Inc. (NASDAQ: AAPL) jumped 18.60% in the last three months and 28.84% year-to-date.
Another notable stock in the 5G industry is Finnish 5G network provider Nokia Corporation (NYSE: NOK). In July 2021, Nokia Corporation (NYSE: NOK) was awarded a contract by Taiwan Star Telecom to expand its 5G network in the country. Shares of Nokia Corporation (NYSE: NOK) increased by 5% in the last month.
Photo by Mario Caruso on Unsplash
Insider Monkey tracks data of about 866 hedge funds. We used this data to pick the 5G stocks most popular among these funds. We also chose stocks with positive analyst ratings, solid fundamentals, and growth catalysts.
Why pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 12 best 5G stocks to invest in right now.
Best 5G Stocks To Invest In Right Now
12. Gilat Satellite Networks Ltd. (NASDAQ: GILT)
Number of Hedge Fund Holders: 8
Gilat Satellite Networks Ltd. (NASDAQ: GILT) ranks 12th on the list of 12 best 5G stocks to invest in right now. Gilat is a networking technology company that specializes in satellite-based solutions and services. The company is based in Israel and was founded in 1987. GILT first introduced its 5G-ready high-speed modem in 2019 through its Telesat's Phase 1 LEO satellite.
In February 2021, Gilat Satellite Networks Ltd. (NASDAQ: GILT) launched its next-generation Very Small Aperture Terminal (VSAT) "Aquarius". Aquarius was designed to support LEO/MEO constellations and 5G networks.
Gilat Satellite Networks Ltd. (NASDAQ: GILT) has a market cap of $597.27 million and currently offers a dividend yield of 9.37%. In the second quarter of 2021, Gilat Satellite Networks Ltd. (NASDAQ: GILT) reported an EPS of $0.00, beating estimates by $0.04. The company’s revenue came in at $56.9 million, up 49% year-over-year and beating estimates by $3.45 million. Shares of Gilat Satellite Networks Ltd. (NASDAQ: GILT) gained 17.58% in the last three months and 87.74% in the last twelve months.
Just like Verizon Communications Inc. (NYSE: VZ), Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC), Apple Inc. (NASDAQ: AAPL), and Nokia Corporation (NYSE: NOK), Gilat Satellite Networks Ltd. (NASDAQ: GILT) is one of the best 5g stocks to invest in right now.
By the end of the first quarter of 2021, 8 hedge funds out of the 866 tracked by Insider Monkey held stakes in Gilat Satellite Networks Ltd. (NASDAQ: GILT) worth roughly $30.2 million. This is compared to 5 hedge funds in the previous quarter with a total stake value of around $19.6 million.
11. Nokia Corporation (NYSE: NOK)
Number of Hedge Fund Holders: 21
Nokia Corporation (NYSE: NOK) ranks 11th on the list of 12 best 5G stocks to invest in right now. The multinational telecommunications company operates in over 130 countries and was founded in 1865.
Nokia Corporation (NYSE: NOK) first introduced 5G to its customers in 2017 when the company tested a 5G connection in Finland using the 5GTF standard which was backed by Verizon Communications Inc. (NYSE: VZ), and Intel Corporation (NASDAQ: INTC) architecture-based equipment.
Earlier this year, Nokia Corporation (NYSE: NOK) and Taiwan Mobile entered a partnership to launch the first New Radio Carrier Aggregation (NR CA).
On August 3rd, Societe Generale analyst Aleksander Peterc raised his price target on Nokia Corporation (NYSE: NOK) to $7.74 per share from $6.21 per share and kept his Buy rating on the shares.
The company has a market cap of $34.79 billion. In the second quarter of 2021, Nokia Corporation (NYSE: NOK) reported an EPS of $0.11, beating estimates by $0.05. The company’s second-quarter revenue came in at $6.32 billion, up 4% year-over-year and beating estimates by $193.68 million. Shares of Nokia Corporation (NYSE: NOK) gained 22% in the past three months and 53.96% year-to-date.
Just like Verizon Communications Inc. (NYSE: VZ), Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC), and Apple Inc. (NASDAQ: AAPL), Nokia Corporation (NYSE: NOK).
By the end of the first quarter of 2021, 21 hedge funds out of the 866 tracked by Insider Monkey held stakes in Nokia Corporation (NYSE: NOK) worth approximately $352 million. This is compared to 19 hedge funds in the previous quarter with a total stake value of roughly $186 million.
10. Analog Devices, Inc. (NASDAQ: ADI)
Number of Hedge Fund Holders: 50
Analog Devices, Inc. (NASDAQ: ADI) ranks 10th on the list of 12 best 5G stocks to invest in right now. The Massachusetts-based semiconductor company produces data converters, radiofrequency, microelectromechanical systems technology, and other sensors.
In March 2021, Analog Devices, Inc. (NASDAQ: ADI) launched its Application-Specific Integrated Circuit (ASIC)-based radio platform O-RAN. The platform is equipped with the fundamental functionality required in an O-RAN compliant 5G radio unit.
On July 26th, Analog Devices, Inc. (NASDAQ: ADI) was initiated at an Equal Weight rating with a $170 price target from Wells Fargo analyst Gary Mobley. The analyst believes shares of Analog Devices, Inc. (NASDAQ: ADI) may perform similarly to those in its equal.
In the second quarter of 2021, Analog Devices, Inc. (NASDAQ: ADI) reported an adjusted EPS of $1.54, beating estimates by $0.09. The company’s revenue in the second quarter of 2021 came in at $1.66 billion, up 26% year-over-year and beating estimates of $57.29 million. Shares of Analog Devices, Inc. (NASDAQ: ADI) gained 13.37% in the last three months and 46.71% in the last twelve months.
Just like Verizon Communications Inc. (NYSE: VZ), Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC), Apple Inc. (NASDAQ: AAPL), and Nokia Corporation (NYSE: NOK), Analog Devices, Inc. (NASDAQ: ADI) is one of the best 5g stocks to invest in right now.
By the end of the first quarter of 2021, 50 hedge funds out of the 866 tracked by Insider Monkey held stakes in Analog Devices, Inc. (NASDAQ: ADI) worth approximately $4.86 billion. This is compared to 58 hedge funds in the previous quarter with a total stake value of around $5.31 billion.
Weitz Investment Management mentioned Analog Devices, Inc. (NASDAQ: ADI) in its Q4 2020 investor letter:
"Analog Devices benefited from several global, long-wave trends such as automation, electric vehicles, and the 5G network build-out. The company’s quarterly sales into the auto, industrial, and communications sectors exceeded expectations, giving the stock a lift."
9. NXP Semiconductors N.V. (NASDAQ: NXPI)
Number of Hedge Fund Holders: 53
NXP Semiconductors N.V. (NASDAQ: NXPI) ranks 9th on the list of 12 best 5G stocks to invest in right now. The semiconductor manufacturer was founded in 2006 and operates in over 35 countries.
In June, NXP Semiconductors N.V. (NASDAQ: NXPI) introduced multi-chip modules for 5G infrastructure. NXPI integrated Gallium Nitride (GaN) technology into its multi-chip modules increasing 5G energy efficiency by 8%.
This August, Truist analyst William Stein raised the price target of NXP Semiconductors N.V. (NASDAQ: NXPI) to $244 per share from $233 per share and kept his Buy rating on the stock. The analyst highlighted the company's solid quarterly results and stronger outlook.
In the second quarter of 2021, NXP Semiconductors N.V. (NASDAQ: NXPI) reported an EPS of $2.39, beating estimates by $0.07. The company’s second-quarter revenue came in at $2.60 billion, up 43% year-over-year and beating estimates by $19.51 million. NXP Semiconductors N.V. (NASDAQ: NXPI) gained 79.07% in the last twelve months and 36.63% year-to-date.
Just like Verizon Communications Inc. (NYSE: VZ), Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC), Apple Inc. (NASDAQ: AAPL), and Nokia Corporation (NYSE: NOK), NXP Semiconductors N.V. (NASDAQ: NXPI) is one of the best 5g stocks to invest in right now.
By the end of the first quarter of 2021, 53 hedge funds out of the 866 tracked by Insider Monkey held stakes in NXP Semiconductors N.V. (NASDAQ: NXPI) worth approximately $1.71 billion. This is compared to 66 hedge funds in the previous quarter with a total stake value of approximately $2.25 billion.
ClearBridge Investments mentioned NXP Semiconductors N.V. (NASDAQ: NXPI) in its Q1 2021 investor letter:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns, and one-off production delays as well as demand resilience in areas like autos and smartphones. Two recent additions, specialty semiconductor maker NXP Semiconductors and semiconductor capital equipment firm ASML also delivered a strong performance in the first quarter. NXP rose as auto production ramped up and electric vehicle sales continued to expand. ASML, which operates in a virtual monopoly for high-end chipmaking equipment, began to exert pricing power as it works through an order backlog that has stretched to over a year. Both are Dutch-based companies and out-of-benchmark names that provide access to different growth profiles than are available in the U.S. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurt wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
8. Broadcom Inc. (NASDAQ: AVGO)
Number of Hedge Fund Holders: 53
Broadcom Inc. (NASDAQ: AVGO) is a semiconductor and infrastructure software manufacturer based in California. The company first introduced its 5G Wifi SOCs in 2013 through various mobile phones such as Samsung Electronics Co. Ltd.'s Galaxy S4 and LG Electronics Inc.'s Nexus 5, among others. Broadcom Inc. (NASDAQ: AVGO) ranks 8th on the list of 12 best 5G stocks to invest in right now.
In 2020, Broadcom Inc. (NASDAQ: AVGO) sold over $15 billion worth of wireless components to Apple Inc. (NASDAQ: AAPL). Analysts suspect that the components will be used for Apple's 5G compatible iPhones.
On July 8th, Oppenheimer analyst Rick Schafer raised the price target on Broadcom Inc. (NASDAQ: AVGO) from $700 per share to $925 per share, while keeping an Outperform rating on the stock. Schafer highlighted the strong demand for the semiconductor group.
In the second quarter of 2021, Broadcom Inc. (NASDAQ: AVGO) reported an EPS of $6.62, beating estimates by $0.16. The company’s second-quarter revenue was $6.61 billion, up 15% year-over-year and beating estimates by $103.58 million. Shares of Broadcom Inc. (NASDAQ: AVGO) gained 9.59% in the past three months and 48.83% year-to-date.
Just like Verizon Communications Inc. (NYSE: VZ), Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC), Apple Inc. (NASDAQ: AAPL), and Nokia Corporation (NYSE: NOK), Broadcom Inc. (NASDAQ: AVGO) is one of the best 5g stocks to invest in right now.
By the end of the first quarter of 2021, 53 hedge funds out of the 866 tracked by Insider Monkey held stakes in Broadcom Inc. (NASDAQ: AVGO) worth roughly $3.31 billion. This is compared to 59 hedge funds in the previous quarter with a total stake value of approximately $3.34 billion.
ClearBridge Investments mentioned Broadcom Inc. (NASDAQ: AVGO) in its Q2 2021 investor letter:
“A good way to conceptualize how we think about portfolio construction is to picture a pyramid. At the bottom of the pyramid are the durable compounding growth companies that form the strong foundation, resilience, and consistency for the Strategy. We think these companies should comprise just under half of the portfolio assets and feature annual revenue growth rates ranging from two times GDP up to 20% as well as healthy free cash flow generation.Broadcom has delivered similar long-term appreciation through a combination of organic growth, capital deployment into new and adjacent opportunities through merger and acquisition activity as well as returning capital to shareholders through buybacks and dividends.”
7. Verizon Communications Inc. (NYSE: VZ)
Number of Hedge Fund Holders: 69
Verizon Communications Inc. (NYSE: VZ) ranks 7th on the list of 12 best 5G stocks to invest in right now. Verizon Communications Inc. (NYSE: VZ) is a multinational telecommunication company founded in 1983. The company started using 5G technology in 2018 after the rollout of Verizon 5G in select cities in the U.S. Today, Verizon's 5G Ultra Wideband is available in over 35 countries.
This July 22nd, Cowen raised the price target of Verizon Communications Inc. (NYSE: VZ) to $68 per share from $66 per share and kept its Outperform rating on the stock. Analyst Colby Synesael highlighted the stock as one of the best defensive value names in its peer group.
In the second quarter of 2021, Verizon Communications Inc. (NYSE: VZ) reported an EPS of $1.37, beating estimates of $0.07. The company’s second-quarter revenue was $33.76 billion, up 10.89% year-over-year and beating estimates by $1.03 billion. After strong quarterly results, Verizon Communications Inc. (NYSE: VZ) raised its FY2021 adjusted EPS to $5.25-$5.35 per share from $5.00-5.15 per share.
Just like Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC), Apple Inc. (NASDAQ: AAPL), and Nokia Corporation (NYSE: NOK), Verizon Communications Inc. (NYSE: VZ) is one of the best 5g stocks to invest in right now.
By the end of the first quarter of 2021, 69 hedge funds out of the 866 tracked by Insider Monkey held stakes in Verizon Communications Inc. (NYSE: VZ) worth roughly $11.38 billion. This is compared to 67 hedge funds in the previous quarter with a total stake value of around $10.5 billion.
Miller/Howard Investments mentioned Verizon Communications Inc. (NYSE: VZ) in its Q1 2021 investor letter:
“We sold Verizon (VZ) based on concerns over how much they might spend in ongoing spectrum auctions. Management may legitimately view spending billions of dollars to expand their spectrum holdings as necessary, but we believe the payoff will be slow and will make it challenging to grow the dividend at a good pace.”
6. QUALCOMM Incorporated (NASDAQ: QCOM)
Number of Hedge Fund Holders: 73
Ranking 6th on the list of 12 best 5G stocks to invest in right now is QUALCOMM Incorporated (NASDAQ: QCOM). The California-based wireless technology provider specializes in 5G, 4G, CDMA2000, and WCDMA mobile communication standards.
Earlier this year, QUALCOMM Incorporated (NASDAQ: QCOM) created the first 5G mmWave data link that can support a carrier bandwidth of 200 MHZ.
KeyBanc analyst John Vinh raised the price target on QUALCOMM Incorporated (NASDAQ: QCOM) from $180 per share to $190 per share this July, while keeping his Overweight rating on the stock.
In the third quarter of 2021, QUALCOMM Incorporated (NASDAQ: QCOM) reported an EPS of $1.92, beating estimates by $0.24. The company’s third-quarter GAAP revenue came in at $8.00 billion, up 63% year-over-year and beating revenue estimates by $431.67 million. Shares of QUALCOMM Incorporated (NASDAQ: QCOM) gained 13.63% in the last three months and 34.03% in the last twelve months.
By the end of the first quarter of 2021, 73 hedge funds out of the 866 tracked by Insider Monkey held stakes in QUALCOMM Incorporated (NASDAQ: QCOM) worth roughly $2.76 billion. This is compared to 85 hedge funds in the previous quarter with a total stake value of approximately $2.72 billion.
ClearBridge Investments mentioned QUALCOMM Incorporated (NASDAQ: QCOM) in its Q1 2021 investor letter:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns, and one-off production delays as well as demand resilience in areas like autos and smartphones. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurt wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
Click to continue reading and see 5 Best 5G Stocks To Invest In Right Now.
Disclosure. None. 12 Best 5G Stocks To Invest In Right Now is originally published on Insider Monkey.
Here are five stocks to own for the 5G network buildout
The 5G rollout has been long touted, but the new technology, which will move data at 100 times the speed of current 4G networks, is only available within some cities. However, Apple Inc.’s AAPL, rollout of two 5G-enabled iPhones phones this week, with starting prices unchanged from last year’s iPhones, underlines how quickly demand for the faster networks will grow.
Here are five small-cap companies that Cuellar believes are primed to take advantages of “a good multiyear spending environment” for 5G network construction, sorted alphabetically. Scroll the table at the bottom to see all the data.
|Company||Ticker||Total return - 2020 through Oct. 13||Market cap. ($mil)||Forward Price/ earnings ratio||Estimated change in sales - calendar 2020||Change in sales - calendar 2019|
|Lumentum Holdings Inc.||LITE,||5%||$6,268||14.8||-1%||31%|
You can click on the tickers for more about each company.
All five stocks are held by the Buffalo Small Cap Fund, which is rated four stars (out of five) by Morningstar. Only two of the five are expected to show higher sales for all of 2020, while three achieved double-digit increases last year.
Here’s more about the five, followed by a summary of the opinions offered by Wall Street analysts (also known as the sell side).
During an interview, Cuellar called Adtran Inc. ADTN, “the best way to play share gains from Huawei in Europe, if they happen.” Huawei Technologies has been under tremendous pressure from the Trump administration as well as in many other countries over network security concerns and the company’s links to the Chinese government.
Cuellar called Adtran “a 2021 story,” because he expects network spending to “ramp” among the company’s largest customers, including BT Group PLC BT.A, , Deutsche Telekom AG DTE, DTEGY, and Orange ORAN, .
Calix Inc. CALX, can benefit from increased spending among smaller, regional U.S. broadband service providers, Cuellar said. The company has added software services in recent years, and revenue from systems is growing much more quickly than hardware sales. That shift not only means better profit margins but an expected “multiple expansion” for the stock, he said.
Ciena Corp. CIEN, operates optical networks, and Cuellar believes the company is another beneficiary of a global move away from Huawei.
The stock plunged 24% on Sept. 3, after CEO Gary Smith warned during the company’s earnings call that a decline in customers’ spending brought about by the coronavirus crisis would hurt revenue for “the next few quarters,” and the price hasn’t recovered. But Smith added that demand for broadband access was increasing at an annual pace of 25% to 30%, meaning Ciena’s customers would eventually be forced to increase spending.
Cuellar said the shares are “pretty attractive” after the drop. He described Ciena’s service offerings as “pretty broad” and said the company’s technology was “dominant” in the quality of its engineering relative to its peers.
Inphi Corp. US:IPHI provides components for companies that make network equipment for telecommunications carriers and data center operators. Cuellar called it “a higher-growth name that has the best product cycle story in the space.”
Inphi has the highest forward price-to-earnings ratio on the list, but in this market, investors are clearly placing a premium on sales growth in the high double-digits. Cuellar said Inphi’s management expects 5G spending by its customers to “ramp hard” in 2022.
Lumentum Holdings Inc. LITE, sells optical and 3-D components globally, including laser sensors used in iPhones. Cuellar said the company is moving out of lower-margin businesses and makes “some really high value-added products with less competition.”
Here’s a summary of sell-side analysts’ ratings and price targets for the group:
|Company||Ticker||Share 'buy' ratings||Share neutral ratings||Closing price - Oct. 14||Consensus price target||Implied 12-month upside potential|
|Lumentum Holdings Inc.||LITE||88%||12%||$83.06||$102.50||23%|
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Investing in 5G Stocks
Updated: Sept. 20, 2021, 10:58 a.m.
National 5G networks went online in 2020, but this massive technology rollout will for years encompass wide swathes of the global economy -- from small tech and infrastructure companies making 5G equipment and small-cell radios to the actual mobile network providers delivering 5G service. Along the way, consumers will need to upgrade to smartphones and other devices that can actually connect to the 5G networks. The 5G upgrade cycle has begun and is worth investors’ attention.
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The top 5G stocks to buy in 2021
5G is the fifth generation of wireless networking technology. It offers lower latency (the time between an input or request for data and the network’s response), along with download speeds up to 100 times faster than those associated with 4G. While mobile network providers such as T-Mobile(NASDAQ:TMUS) and rivals Verizon(NYSE:VZ) and AT&T(NYSE:T) are all great options for investing in 5G, investors wishing for more concentrated portfolio exposure to 5G can focus on companies providing related infrastructure, equipment, and technology.
Semiconductor manufacturers (also known as chipmakers), manufacturers of core equipment and infrastructure, and holders of real estate assets are all well positioned to benefit from the proliferation of 5G. Several 5G exchange-traded funds (ETFs) also focus on the technology.
Equipment and infrastructure
As with all tech, the basic building blocks for 5G are semiconductors -- the computer chips that process data and execute commands. These companies provide the chips that make 5G work:
Qualcomm's (NASDAQ:QCOM) product portfolio includes chips that enable 5G technology in everything from Internet of Things (IoT) devices such as industrial equipment to smartphones, cars, and modems and other equipment that make up the 5G network itself.
Qualcomm has profited from the smartphone boom since the early 2000s, focusing on the tech behind 3G and then 4G mobile networks. The smartphone industry has matured, and unit sales no longer reliably post double-digit percentage growth. However, the 5G upgrade cycle is likely to significantly benefit Qualcomm. The company has ample cash on its balance sheet to drive further innovation in hardware, and it has consistently paid a dividend for nearly two decades.
2. Skyworks Solutions
Skyworks Solutions(NASDAQ:SWKS) sells some of the basic components that power 5G networks. As a smartphone and consumer electronics supplier, the company is using its connectivity know-how to successfully enter other sectors, including smart-home devices, connected industrial equipment, and medical devices. It bolstered its presence in this area with the recent purchase of Silicon Labs’ (NASDAQ:SLAB) automotive and network infrastructure segment. Although it’s the smallest chipmaker on this list, Skyworks has a healthy balance sheet, which supports its continued growth as 5G continues to become available.
3. Advanced Micro Devices
AMD(NASDAQ:AMD) makes this list because of its acquisition of Xilinx(NASDAQ:XLNX) -- the industry leader in field-programmable gate array (FPGA) chips. FPGA chips have flexible designs that customers can reprogram and reconfigure even after they’ve been built. As new hardware is developed for 5G, FPGA chips’ adaptability makes them ideal for constructing the basic equipment to deploy 5G technology. Xilinx gives AMD access to a best-in-class research and development department and is also likely to improve AMD’s profitability since Xilinx’s profit margins are far higher than those of AMD’s traditional semiconductor chips.
Nvidia's (NASDAQ:NVDA) graphics processing units (GPUs) are most commonly used in high-end video games, but they are also being used for many other applications, 5G included.
Since 5G networks enable not only faster download speeds but also have the ability to handle higher traffic and intelligently route network signals where they’re needed most, high-end GPUs are required for this task. Nvidia's GPUs are being used by telecom companies and equipment makers, and 5G deployment is likely to increase the need for GPUs to operate cloud-based video games that are streamed over telecom networks. Already a huge enterprise, Nvidia is finding a potentially massive new market in 5G and has a history of making technological advancements.
Chip design giant Broadcom(NASDAQ:AVGO) is a top name in 5G. Its circuitry designs can be found across the mobile network ecosystem from devices such as smartphones that connect to a wireless signal to the wireless base stations that create 5G signals managed by mobile service providers. Broadcom’s large and diverse chip business is complemented by an infrastructure management software segment that assists customers with monitoring and securing their networks and cloud computing assets.
Image source: Getty Images
5G Equipment and Infrastructure Stocks
Beyond the basic chips needed to power 5G telecommunications, general equipment makers provide the necessary hardware. To reach businesses and consumers, wireless 5G signals need extensive hardware to make the technology work.
Before it gets turned into a high-speed Wi-Fi signal, 5G data needs to travel along the wired portion of the internet just like other electronic data. That’s where fiber-optic cable comes in, and Corning(NYSE:GLW) -- the legacy glass and ceramics manufacturer -- is a major provider. Even as they deploy new radio towers, many telecoms providing 5G service also need to add more high-speed cable to their back-end networks, and Corning is a top supplier for many of those companies. Corning is also getting into the small-cell antenna space, which is a core component of 5G systems, by partnering with Qualcomm to supply in-building network equipment. And the company is helping to solve some of the problems 5G signals have in penetrating solid surfaces.
Corning is a solid investment, boosted by its long history of paying dividends.
Small but steadily growing Ciena(NYSE:CIEN) sells fiber-optic equipment and design services to communications companies. Thus far, Ciena's profits from the expansion of 5G technology have enabled the company to pay down debt and increase its cash reserves. As organizations update their systems to handle 5G, this company is capable of providing both the engineering design and materials needed.
3. Arista Networks
Data center and internet infrastructure company Arista Networks(NYSE:ANET) is another often-overlooked 5G stock. Because 5G can carry massive amounts of data -- enabling ultra-high-definition video streaming or communications for network-connected vehicles -- data centers will play an increasingly important role in digital information systems. Arista is a top equipment provider for data centers, with open-source hardware and software-defined management and cybersecurity tools. Arista is also well positioned to benefit from the accompanying boom in mobile 5G data.
Real estate and 5G
5G requires real estate. Towers and other fixed assets are needed to broadcast 5G signals, and the real estate investment trusts (REITs) American Tower(NYSE:AMT), Crown Castle(NYSE:CCI), and Digital Realty Trust(NYSE:DLR) are the largest landholders in the sector. American Tower and Crown Castle own and operate buildings and cell tower sites that are crucial to the function of both mobile networks and internet infrastructure at large. These real estate companies also establish fiber-optic networks that connect 5G small-cell sites to the rest of the internet. As for Digital Realty Trust, it’s a top developer and acquirer of data centers. Its clients include telecommunications companies that are building the physical assets needed to make 5G possible.
Although these investments are primarily designed to generate income, all three REITs have seen their share prices grow significantly over time. As mobility becomes increasingly important around the globe and data volumes continue to boom, the communications real estate assets in which American Tower, Crown Castle, and Digital Realty Trust specialize will only become more in demand.
The providers of phone, internet, and television services along with the necessary infrastructure.
A vast sector that includes gadget makers, software developers, streaming services, semiconductor makers and more.
Makers and distributors of films, TV shows, music, and other programming.
A large, fast-growing market as consumers seek out new types of interactive entertainment.
Invest in 5G for the long term
While previous telecom network upgrades enabled the smartphone and mobility booms, 5G technology is making every device more mobile and further entrenching digital technology in everyday life. Investors who are patient throughout the lengthy course of 5G’s deployment are likely to see attractive, long-term returns.
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7 5G Stocks With More Catalysts Than 5G
5G technology is set to become one of the most important technologies for the next several years. This isn't news – 5G stocks have been on investors' radars for quite some time.
In fact, 5G stocks as purely 5G plays are almost played out.
Still, the tremendous growth in the space is hard to ignore. For instance, 5G network infrastructure spending doubled in 2020 after a staggering 350% rise in 2019, according to a forecast from Gartner.
"Early 5G adopters are driving greater competition among (communication services providers)," says Kosei Takiishi, senior research director at Gartner. "In addition, governments and regulators are fostering mobile network development and betting that it will be a catalyst and multiplier for widespread economic growth across many industries."
But investors looking to play this powerful trend should perhaps consider 5G stocks that have other things going for them. Most catalysts likely will at least tie into 5G use as the network continues to roll out and new uses are discovered, but in some cases, strong parts of the bull argument are completely independent from 5G.
Here are seven 5G stocks that can continue to benefit from the growth in the technology, but also boast other factors that make them even more appealing.
Data is as of March 1. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.
1 of 7
- Market value: $126.1 billion
- Dividend yield: 2.7%
- Catalyst: Automation
The German-based industrial conglomerate Siemens (SIEGY, $78.91) isn't an obvious play on 5G … at least when looking at 5G as purely a consumer-based technology. However, outside the world of faster downloads to a smartphone, 5G networks can be built on non-cellular networks.
For a giant factory, enabling a business-level 5G network can allow for more optimized automation, which can drive costs down and directly improve a company's bottom line.
"Enterprise applications allowing different machines to talk to each other in factories and automation. That's a real 5G use case that you're starting to see," says Reaves Asset Management analyst Brian Weeks. "That's not mobile internet, those are private networks that don't rely on a wireless spectrum."
Siemens is the leader in these business and industrial applications for 5G technology – not just in use, but in development. In November, for instance, the company released the first industrial 5G router. These routers will allow companies to integrate networks and better automate processes across giant plants.
BofA Securities analysts give Siemens a Buy rating and recently upgraded their estimates in part because of "strong growth and good visibility in China on both industrial automation and software businesses."
While SIEGY shares, which trade over-the-counter in the U.S., have been flat for years, a broader shift into industrial stocks, as well as Siemens' advances in industrial automation, could drive better performance going forward.
2 of 7
- Market value: $200.8 billion
- Dividend yield: 7.4%
- Catalyst: Streaming
You can't have a list of 5G stocks without one of the major telecoms.
AT&T (T, $28.09) has spent several years and mountains of debt – $151 billion in long-term IOUs as of the end of 2020 – building itself into more than just a telecom play.
Its acquisitions of DirecTV and Time Warner gave it access to broadcasting as well as content creation. The former hasn't gone so well; AT&T has been trying to unload its satellite business for months, and finally agreed to a deal with private equity firm TPG Capital that will see the firm spin off DirecTV into a separate entity.
However, Time Warner – which includes Warner Bros., HBO, and numerous Turner properties including CNN, TBS and TNT – is a catalyst some investors might be sleeping on.
The company's HBO Max service saw signups surge by 40% amid the exclusive release of Wonder Woman 1984 starting on Christmas. That's a higher growth rate than Disney's (DIS) Disney+ enjoyed when it released the highly anticipated Hamilton on its service in July, though it was starting from a lower number.
It's a potential catalyst, albeit one with some risks. Some signups might not stay with the service, especially given its high price of $14.99. There also are worries about streaming interest waning as COVID-19 does.
"The nearly $5 billion investment in HBO Max over the next five years represents a substantial risk for AT&T if subscriber acquisition/retention metrics and/or financial returns for the service do not accord with management's projections," writes Argus Research analyst Joseph Bonner (Buy). But he adds, "We think management did a good job with content and pricing, and will undoubtedly market the new service through all of its many consumer touch points."
Despite this, and the potential wave of growth from 5G service, shares trade like … well, a telecom. T stock is priced at less than nine times future earnings estimates, largely out of concerns about the company's high debt level and what it means for the sustainability of the dividend. AT&T pays out $2.08 per share annually, translating into a high 7% yield at current prices.
The good news on that front? The TPG deal will give AT&T $7.8 billion to use against its debt, and Argus believes it will "have a positive effect on margins and EBITDA growth."
3 of 7
- Market value: $29.2 billion
- Dividend yield: 0.9%
- Catalyst: 4G
What if 5G networks take more time than expected to roll out? Technological hiccups aren't exactly rare, and already, some early predictions for 5G network coverage have been proven overly optimistic.
In that case, companies still providing 4G coverage should fare well.
But no matter how fast or slow 5G rolls out, it's all good news for cell tower companies. Why? Because these firms act as the onramp for network coverage, no matter what generation. It's effectively an oligopoly that drives strong returns for the participants. Even better, the likelihood of future tower growth is slim; most 5G tech will use much of the same tower real estate as the existing 4G network.
"The biggest winner from 3G to 4G were the towers," says Reaves Asset Management's Weeks. "You didn't even have to pick the right one, you just had to throw a dart. It's one of the best business models ever. The existing inventory of towers in the U.S. is the inventory in the future. You can't really build new towers because of zoning and regulatory issues."
Enter SBA Communications (SBAC, $262.80).
SBA Communications is a telecommunications real estate investment trust (REIT) that leases infrastructure out to telecom providers. While REITs are a traditionally dividend-friendly sector given their mandate to share most of their profits with stock owners, SBAC doesn't offer much in the way of yield. Fortunately, that's largely a byproduct of its rapid share price growth over the past few years.
Given the company's likely growth trajectory on fixed costs and rising profits, however, the yield is likely to increase over time.
The company recently made a $973 million deal with PG&E (PCG) to place its antennas on the utility company's electric towers – a deal UBS's Batya Levi (Buy) says "will increase leverage." She adds, however, that "management expects to return to its targeted range by YE21 while still supporting a 25% dividend increase, other portfolio growth and/or continued share repurchases."
SBAC shares have cooled off significantly after years of ramping higher, and are now down roughly a quarter from their 52-week highs. That provides a much better entry point for this eventual 5G beneficiary.
4 of 7
- Market value: $342.9 billion
- Dividend yield: 0.1%
- Catalyst: IoT, AI, machine learning, cryptocurrency
Nvidia's (NVDA, $553.67) graphics processors are a key ingredient for the various tools that will run on 5G networks. For instance, in early 2020, Nvidia reported that researchers were using the company's processors to develop artificial intelligence that could use machine learning more efficiently for growing out the 5G network.
"We have found that for some very hard telecom problems, there's no math formulation, but AI can learn the problem models automatically, enhancing our GPU-based parallel solutions," says Yan Huang, a PhD student and researcher on the project.
In short, Nvidia might just surprise as a 5G play, as it can help develop the technologies that run on it. It might even come up with the most ubiquitous uses that, 10 years for now, seem obvious in hindsight if they seem impossible today.
Regardless, Nvidia's current role in a number of other emerging technologies – take your pick, whether it's the Internet of Things, artificial intelligence, cryptocurrencies – places it front and center of a digital gold rush, much like the pick-and-shovel sellers in the gold rushes of yore obtained the safest and most consistent profits.
Consider the company's most recent report, which showed 2020 revenues up 53% year-over-year, and adjusted earnings up 73%. Those results were driven by products attached to a number of these trends, such as the company's A100 universal AI data center GPUs.
"Thousands of companies across the world are applying NVIDIA AI to create cloud-connected products with AI services that will transform the world's largest industries," CEO Jensen Huang said in a release.
From a hardware standpoint, Nvidia is a major player in a lot of areas. 5G is just a slice of a fast-growing pie.
5 of 7
- Market value: $158.8 billion
- Dividend yield: 1.9%
- Catalyst: Mobile infrastructure upgrades
Qualcomm (QCOM, $139.49), which is essentially a warehouse of patents on wireless communications, is another likely winner in the 5G race.
"Qualcomm is truly an incredible company (we own its shares, which we bought for the first time in 2015)," writes portfolio manager Vitaliy Katsenelson. "It owns essential patents on wireless technology. Your mobile phone runs on Qualcomm's intellectual property. Every time a mobile phone is sold on any part of this large planet, Qualcomm collects a few bucks. An incredible and very profitable business."
That's true whether a phone is 4G or 5G. Even if the upgrade cycle to 5G takes longer than expected, Qualcomm still benefits. That's the beauty of the company's royalty business model.
Remember: This isn't a one-and-done event. A study by Cambridge's Edward Oughton and the Universidad Politécnica de Madrid's Zoraida Frias estimates that 5G won't even reach 90% penetration until 2027. No matter how long the rollout takes, that leaves a long runway for companies benefitting from the trend, and a company selling products to suppliers of mobile devices on a royalty basis will likely continue to be a big winner, even if the market has already realized it.
QCOM has other avenues of growth, too. For instance, Argus Research's Jim Kelleher (Buy) says of Qualcomm's recent acquisition of Nuvia, "This under-the-radar acquisition, in our view, can accelerate Qualcomm's development of ARM-based CPUs for cloud and data center applications."
Still, 5G is an unquestionably significant driver for QCOM going forward.
"We believe that Qualcomm has barely begun to monetize its significant intellectual capital and multigenerational lead in 5G technology," Kelleher says. "As the 5G ramp moves from mainly infrastructure investment to the mass adoption of 5G handsets, we continue to look for a significant boost to revenue, margins, and EPS."
6 of 7
- Market value: $1.6 trillion
- Dividend yield: N/A
- Catalyst: Autonomous fleets and warehouses
Amazon.com (AMZN, $3,146.14) founder Jeff Bezos announced in early February that he would step down as CEO later this year. His replacement? Andy Jassy, who currently leads the company's cloud business.
Many consumers still see Amazon as a primarily online retail operation. While that's a massive business, the profit driver is the company's Amazon Web Services. The development of the company's cloud storage business and ancillary services has generated far thicker profits – which the company admittedly sometimes wipes clean with massive expansion reinvestments – than in its internet retail operations.
Here, the industrial applications of local 5G networks come into play. Amazon could easily test out autonomous fleets running on a local 5G network, which might allow it to better automate its warehouses.
"AWS is uniquely positioned for enabling the grid of the future," the company notes. "With the scalability that can deliver dynamic load flows in near-real time, AWS can offer unprecedented insights to the grid operators of the future. With sophisticated AI/ML tools, AWS can carry the heavy lift of complex decision making in controlling these dynamic grids, where generation and load (electric vehicles) can itself be mobile too."
5G or not, Amazon will continue to benefit from the two-headed monster that is its e-commerce and AWS services.
"As the leader in two large and rapidly growing sectors (eCommerce & cloud), with an emerging high margin marketing business, Amazon remains well positioned in a recovery scenario given cloud services, marketing services and certain eCommerce categories/geographies are still in the early phases of development," say Stifel's analysts, which rate the stock at Buy.
7 of 7
- Market value: $1.4 trillion
- Dividend yield: N/A
- Catalyst: Software suite for 5G applications
Sure, Google parent Alphabet (GOOGL, $2,069.66) is already releasing 5G versions of its Pixel smartphone. But that hardware story has been known for some time.
At the end of 2020, Google expanded its Anthos 5G ecosystem, which allows its software applications to better utilize 5G networks. Anthos is simply the company's old Cloud Services division, which was rebranded in 2019.
This software side of the equation is where the real catalyst for higher profits for the company going forward – and likely a higher share price.
"When 5G is available to them, enterprise customers can benefit from higher speeds and lower latency, and Anthos makes it very easy for these customers to then deploy an application once and scale it across networks, including to the edge – which is why we call it 'the effortless edge,'" Amol Phadke, Google Cloud's managing director, said in a release announcing the Anthos expansion.
Right now, this side of the business is still reinventing itself for 5G applications. In February, Google reported $15.6 billion in Q4 earnings. This cloud services division lost more than $1.2 billion – more than its notoriously unprofitable "Other Bets" division, which lost $1.1 billion.
In time, however, this division could end up being a major growth and profit center for the company. "5G needs the cloud more than the cloud needs 5G," Reaves Asset Management's Brian Weeks quips.
10 top 5G stocks for 2021: discover some of the hottest 5G companies
5G stocks, as with most investments, have been affected by a turbulent year in 2020, but in 2021 we are starting to see 5G stocks recovering from the effects of coronavirus, and from the uncertainty that surrounded the US presidential race.
The stock market saw big dips at the end of March 2020, and 5G stocks were amongst those affected. However, since then the market has started its recovery, and the picture for 5G stocks in 2021 still looks attractive to investors. And October through November has seen 5G stocks continuing to increase in value, which will be further buoyed by the recent launch of the 5G iPhone.
The Covid-19 outbreak, and the need for many people to work remotely, and access the internet on the move, has highlighted the importance of 5G technology. And rather than sideline plans for 5G investment, some reports show that the pandemic has moved 5G up the priority list of many enterprises, and consumer use is also increasing.
5G stocks have fluctuated over the last 12 months. Mobile network operators around the world chose 2020 to roll out their first 5G services, billions of dollars were spent on upgrading technology and marketing these new services, and Apple – although a little late to the party – chose 2020 to release its 5G iPhone.
But with so much disruption within the networking and telecommunications industries, what can we expect to see in 2021?
5G stocks prices are on the up
The launch of 5G will affect a huge number of companies, from mobile networks, to healthcare and gaming. This will consequently boost the stock market, as 5G brings new opportunities and revenue streams for companies. And 5G stock prices are likely to increase, as they have over the last 12 months.
In fact, there are entire funds dedicated to 5G tech, such as the The BlueStar 5G Communications Index, which, even with 77 listed companies can sometimes miss 5G stocks that might not fall within its relatively strict remit (such companies focussing on services delivered via 5G). (Defiance ETFs is an exchange-traded funds sponsor and registered investment advisor focused on the next generation of sector investing.)
In this update we bring you updates on the hottest 5G stocks.
Disclaimer: The information below is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
Hot 5G stocks: T-Mobile
5G stock info
Current price: $127.57
Market cap: $158.58bn
Year high: $150.20
Year low: $108.86
P/E ratio: -
Dividend yield: -
T-Mobile US (NASDAQ:TMUS) completed its merger with Sprint in April 2020, creating what the company heralded as a "supercharged Un-carrier that will deliver a transformative 5G network". And marketing speak aside, this wasn’t far off the mark.
At the merger announcement the company said that it expects 14 times more total capacity over the next six years than T-Mobile has today, with T-Mobile also announcing that all new subscribers to T-Mobile would get free access to 5G.
T-Mobile has performed consistently well over the last five years, which has seen the stock price grow from $40 to $115 over that period. And even after the T-Mobile merger with Sprint had been completed, T-Mobile had a debt of $72.5 billion, which, although significant, is far less than the $169 billion and $113 billion that AT&T and Verizon owe, respectively.
Week-on-week we saw T-Mobile recover from a market-wide dip that affected most 5G stocks in the heat of the US election, and T-Mobile shares recovered by 12 cents, bringing it close to its 12-month high.
Most recently, T-Mobile addressed what it called the “carrier death grip” of its competition, announcing three new products – 'Home Office', 'Collaborate', and 'Enterprise Unlimited' plans – which will fall within a new offering called ‘WFX’ (work from anywhere). And in April the company announced 74 cents in earnings per share in the first quarter, which was above Wall Street’s average estimate of 54 cents. Revenue was $19.8 billion, almost a billion dollar above expectations, and the company also added a net 1.2 million increase in bill-paying subscribers, which was also higher than expected.
This resulted in a boost to the company's stock of around three percent, with the share price rising to $136.00 by September 6th. But a move by KeyBanc Capital Markets to downgrade T-Mobile may have had a negative effect, as the share price dipped to $127 as of September 16th.
Hot 5G stocks: Skyworks Solutions
5G stock info
Current price: $176.97
Market cap: $29.19bn
Year high: $203.80
Year low: $132.60
P/E ratio: -
Dividend yield: -
Skyworks Solutions (NASDAQ: SWKS), the semiconductor company, generated 51% of its total revenue from Apple last year. This is both good and bad news as the 5G iPhone release was hit with delays in the wake of coronavirus, which resulted in a 5% dip, followed by an almost immediate recovery. And whilst November 2020 saw a certain amount of volatility in price, Skyworks' share price rose to $151.84 by the 15th January 2021, and jumped a further 20% in the following weeks, hitting a 52-week high of $204 by the end of April.
However, citing the "limited upside potential," Goldman Sachs has recently downgraded Skyworks Solutions from 'Buy' to 'Neutral'. And this announcement, as well as the recent news that its stock had underperformed when compared to some major competitors, saw the 52-week high quickly followed by a dip that took the share price down to $171.31 as of June 21st. However, it has recovered significantly over the last few months, recovering to $183.01 by September 6th, before dipping again to $176.97 by September 16th.
"While we remain constructive on Skyworks' long-term competitive position in the growing RF market, we expect the stock to perform largely in line with our broader Semiconductor and Semiconductor Capital Equipment coverage universe through the balance of the year, with our CY21/22 estimates only marginally above Street consensus and the stock trading at a NTM P/E multiple relative to the S&P 500 that is largely in line with its past 3-year median," explained Goldman Sachs analyst, Toshiya Hari.
Gartner had originally estimated that 221 million 5G smartphones could be sold in 2020 and the Covid-19 outbreak has had an obvious knock-on effect.
However, with Skyworks being one of the main chipmakers for huge players such as Apple, and with the US trade ban on Chinese technology spreading around the globe, it isn’t an investment to be overlooked. And despite Skyworks being on the radar of many investors over the last few months, it still looks like a good choice for those looking for 5G stocks.
Hot 5G stocks: Ericsson
5G stock info
Exchange: STO: ERIC-B
Current price: SEK 100.06
Market cap: SEK 307.42bn
Year high: SEK 121.80
Year low: SEK 93.42
P/E ratio: 17.26
Dividend yield: 1.96%
Ericsson (STO: ERIC-B)stock jumped around 10% as Ericsson announced adjusted sales for the last financial year of SEK69.6bn (£6bn), an increase of 13% year on year, which the company says was driven by 5G and by sales in Northeast Asia, Europe and North America. Operating income, which excluded restructuring costs, also increased by 80% to SEK11bn, while reported net income was SEK7.2bn.
Strategic contracts, especially those in China, were flagged up by Ericsson as a cause for confidence, and it will no doubt be looking to expand on key partnerships, such as winning an 11.5% stake in a $52bn China Mobile tender (the only European company to do so).
Elsewhere, strong investments in R&D have resulted in the company’s patent licensing business continuing to perform well, due to its impressive IPR portfolio, much of which has taken place in the 5G market with “proven performance and cost of ownership benefits".
“We have continued to increase our market share in several markets by leveraging our competitive product portfolio,” Ericsson's Q2 report says. “Profitability in earlier awarded strategic contracts has improved according to plan. We consider strategic contracts to be a natural part of the business and we will stop our forward looking commentary unless there is an extraordinary impact.”
To top off a good period for the company, it also announced recently that it would be working in Oman to help deliver 5G, as part of a multi-year partnership. And this resulted in the company's share price rising from 87.64 SEK to 96.86 SEK in just 24 hours. And since mid-October, we've seen a slow but steady climb in price, and following better-than-expected financial results, it currently sits at SEK 100.06.
So not the strongest of 5G stocks, but well worth considering if you're looking at a longer-term investment.
Hot 5G stocks: Nokia
5G stock info
Current price: €4.82
Market cap: €27.35bn
Year high: €5.38
Year low: €2.70
P/E ratio: n/a
Dividend yield: n/a
In October 2019 Nokia (HEL: NOKIA) dropped its 2019/2020 outlook as profits came under pressure due to the company spending more on its 5G networks.
Whilst Nokia did meet third-quarter expectations, it still decided to cut profit predictions. On top of this, the company paused dividend payments in order to raise investments for 5G. The extra investments that 5G demands put pressure on the company's finances, and as a result Nokia shares plummeted by 21%.
However, there are green shoots of a recovery coming through, and Nokia has been vocal about its support for open O-RAN technologies, which will be music to the ears of potential partners that may be looking to move away from Huawei.
This has resulted in Morgan Stanley analyst, Dominik Olszewski, upgrading Nokia's 5G stocks rating to Overweight from Equal Weight, with a new price target of €5.00, up from €3.65. Add to this the fact that Nokia's year-on-year sales rose 3% to €5.08 billion, and Nokia looks to be eyeing a brighter future, with its share price currently sitting at €4.82 as of September 16th.
Nokia has also announced its next-generation 5G AirScale Cloud RAN solution based on vRAN2.0, which will be commercially available in 2020. And earlier this year it announced a €400m 5G deal with Taiwan Mobile.
Hot 5G stocks: Ciena
5G stock info
Current price: $53.38
Market cap: $8.27bn
Year high: $61.09
Year low: $38.03
P/E ratio: 18.09
Dividend yield: -
Ciena Corporation (NYSE: CIEN) is a US-based fiber networking specialist, which also produces a number of software-based products that enable network operators to manage xHaul (existing backhaul and fronthaul networks) within 5G networks and beyond.
Ciena specializes in the installation and management of fiber optic networks, which are an essential part of the 5G networking infrastructure, and although other technologies can be used for IP transport, fiber is still the preferred choice.
During the company's fiscal 2020 second quarter, revenue increased by a conservative 3.4%, but adjusted earnings per share rocketed up by 58%, which is a reliable indicator that investors see a positive future for Ciena’s fiber solutions such as its Adaptive IP product. Although, due to the coronavirus pandemic, shares took a hit earlier this year, despite still being up year-on-year. For those that already own Ciena stock, now is not the time to sell. But it may be good point for investors to consider them, as historically Ciena posts annual growth.
In the week commencing 2nd November, Ciena's stock was valued at $39.15, but following the market rally after the US election, it returned to $42.87, and has continued to climb, to the point where it broke $50 by the end of December 2020. And although it still sits a little of its 2020 high of $60, Ciena has seen a decent recovery since the huge sell-offs across the stock market in September 2020, and, as of September 6th, it now sits at $56.92, bolstered by Bank of America changing its purchase status from 'neutral' to 'buy' at the end of January 2021.
As more networks make the move to 5G standalone, and upgrade networking infrastructure accordingly, Ciena will be well placed to handle installation, configuration, and management of fiber optic backhaul within 5G networks.
Hot 5G stocks: Qualcomm
5G stock info
Current price: $138.24
Market cap: $155.93bn
Year high: $167.94
Year low: $108.30
P/E ratio: 17.26
Dividend yield: 1.97%
Qualcomm (NASDAQ:QCOM) is one of the most prominent 5G stocks, and following a market-wide slump in the wake of coronavirus, Qualcomm's share price has recovered incredibly well, and it recently hit its 2020-high of $158.09 during December. Since then, it dipped slightly, dropping to $151.79 at the start of January, and after a short recovery, it dipped further to $127.87 by March 11th, recovering slightly over the next four months, to the point where it now sits at $138.24.
Having gained 83% in 52 weeks, Qualcomm should have had a good February, but its stock dropped, with a further decline at the start of March. For those questioning why this happened, it looks like Qualcomm's strong 2020 may not have been strong enough for some investors. So rather than Qualcomm being a busted flush, it might actually be a good time to buy.
And given its history, Qualcomm should bounce back. According to Yahoo! Finance: "One of the stand out quality metrics for Qualcomm Inc is its 5-year Return on Capital Employed, which is a solid 13.0%. Good, double-digit ROCEs are a pointer to companies that can grow very profitably."
And Qualcomm has also seen its stock on the rise following the recent announcement that Qualcomm was launching its new Robotics RB5 platform, which integrates key capabilities such as high-performance heterogeneous computing, 5G/LTE, hi-fidelity sensor processing for perception, odometry for localization, mapping, navigation, strong security, and Wi-Fi connectivity.
The news instigated a six dollar jump in Qualcomm's share price, as the momentum around 5G use cases within the industrial sectors. (The Qualcomm Robotics RB5 platform is designed for the next generation of high compute, low-power robots and drones for the consumer, enterprise, defense, industrial and professional service sectors.)
Hot 5G stocks: Aviat
5G stock info
Current price: $34.87
Market cap: $489.33m
Year high: $43.76
Year low: $9.25
P/E ratio: 3.70
Dividend yield: -
Aviat Networks (NASDAQ: AVNW) recently announced that it is working with Safaricom, the largest telecom company in Kenya, to deliver a backhaul connection in remote areas using microwave technology.
Given what we've already reported, regarding the slump during the conclusion of the US election, it should come as no surprise that Aviat Networks had recovered from $18.75 to $34.87 by September 16th 2021.
Rolling out 5G in more remote locations poses a number of challenges for mobile network operators (MNOs) around the world, one of the biggest being establishing a backhaul connection when there isn’t the option to run fiber or copper cable to a cell site.
In these cases, MNOs are turning to microwave frequency bands, which, although having extremely poor general coverage, are perfect for focusing a narrower beam, which creates a point-to-point connection between sites, and can deliver speeds of up to 10Gbps, over a distance of six miles.
And Aviat says that its multi-band products, such as the The WTM 4800, provide the lowest TCO for 5G backhaul, especially in countries, like Kenya, where the cost of microwave spectrum is high.
Hot 5G stocks: Marvell Technology
5G stock info
Current price: $62.46
Market cap: $51.44bn
Year high: $64.07
Year low: $35.30
P/E ratio: -
Dividend yield: 0.38%
Marvell Technology Group (NASDAQ: MRVL) received a downgrade at the start of the year, but this didn't cause panic amongst investors, who saw the stock rally, from $21 at the end of February, to over $45 at the beginning of December. And it jumped further at the start of January, settling to $50.98 by February 22nd, and over the summer it has climbed steadily to $62.46 as of September 16th.
Similar to Qualcomm, the reason for this is likely to be lower-than-expected results, despite Marvell stock increasing by 80% in the past year the PHLX Semiconductor index only increasing by 58% in comparison).
Marvell, which made nearly $3 billion in revenue during 2019, has entered partnerships with companies such as Nokia, which it will supply with a new range of system-on-a-chip and infrastructure processors. Marvell's chipsets will eventually replace the field programmable gate arrays (FPGAs) that Nokia originally chose for its 5G products. These were an expensive option that doesn’t appear to have paid off.
The fact that Marvell stock has grown so significantly in recent years may have moved it beyond the interest of many investors, with some claiming that it may be over-valued, but it could still make a good buy for those looking for a longer-term investment.
Hot 5G stocks: American Tower Corporation
5G stock info
Current price: $297.17
Market cap: $137.46bn
Year high: $302.94
Year low: $198.90
P/E ratio: 59.88
Dividend yield: 1.71%
American Tower Corporation (NYSE: AMT) is an owner and operator of wireless infrastructure. This company has an impressive $100.36bn market cap and a huge global footprint. AMT owns over 170,000 telecom infrastructure sites, and so is perfectly placed to benefit from 5G.
At the beginning of 2020 AMT stock rose by nearly 2% after it was upgraded to ‘Buy’ by Goldman Sachs, as they see rapid growth from expanding 5G coverage.
However, the stock has seen more conservative increases as the company was hit by the effects of the coronavirus pandemic, and the slowing roll out of 5G around the world.
But, like other communications infrastructure companies, the next few months should see a return to previous levels of growth, and its stock currently sits at $297.17, just a few cents of its 12-month high. And this increase has also been buoyed by above-average performance against analyst reports.
Add to this the increasingly defensive position of the US government when it comes to technology providers, and the future looks bright for the American Tower Corporation, as demand for 5G infrastructure continues to grow.
Hot 5G stocks: MediaTek
5G stock info
Current price: 936.00 TWD
Market cap: 1.49tn TWD
Year high: 1,185.00 TWD
Year low: 581.00 TWD
P/E ratio: 18.33
Dividend yield: 3.95%
In August 2020, US sanctions on Huawei were extended to MediaTek Inc. (2454:Taiwan), as the US DOC announced that it has added 38 Huawei affiliates to the US government's economic blacklist, taking the total to 152.
This caused a 10% drop in MediaTek’s share price, but this knee-jerk drop, alarming as it was for investors, doesn’t really paint a true picture of MediaTek’s investment potential. In fact, it may have made it even more appealing for investors willing to look at the longer-term.
Like other shares, it took a hit in the US election campaign, dropping to 665.00 TWD, but recovered to 686.00 TWD within a week, reflecting the resilience of this stock. And it has rallied every since, and by February 22nd it reached 951.00 TWD (having reached 1,010.00 TWD a few days prior to that, before dipping slightly). And the stock took a further dip, dropping to 870.00 TWD by March 23rd, before recovering to 936 TWD as of September 16th.
MediaTek recently announced its 7nm Dimensity 800U chipset, which has an impressive list of features, supporting sub-6Ghz SA and NSA networks, whilst also supporting technologies such as 5G+5G dual SIM dual standby (DSDS), dual Voice over New Radio (VoNR), and 5G two carrier aggregation (2CC 5G-CA).
And in recent news realme announced that it would be continuing to expand its range of affordable 5G phones, with the new realme 8 5G becoming the UK’s first smartphone to feature MediaTek’s Dimensity 700 5G processor.
Dan is a British journalist with 20 years of experience in the design and tech sectors, producing content for the likes of Microsoft, Adobe, Dell and The Sunday Times. In 2012 he helped launch the world's number one design blog, Creative Bloq. Dan is now editor-in-chief at 5Gradar, where he oversees news, insight and reviews, providing an invaluable resource for anyone looking to stay up-to-date with the key issues facing 5G.
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The penny stock market is like the minor leagues in professional baseball. In this space, former high- and mid-priced stocks compete for the possibility of returning to a higher level. Also, it is where new stocks vie for a big break.
The emergence of 5G — 5th generation — communication technology has energized investor interest in 5G penny stocks. Any company with a connection to super-fast 5G communication technology has a chance of sharing in the growth. Are you interested? Here is a list of 5G penny stocks with great growth potential.
Overview: 5G Penny Stocks
Investors once considered penny stocks to be any security trading under $1. The Securities Exchange Act of 1934 changed that. The Securities Exchange Commission used this law to establish the penny stock trading rules and set the penny stock price classification at $5 and under. You can trade these stocks over the counter (OTC) or through any of the major exchanges.
Penny stocks’ low prices allow easy acquisition. This helps investors control their risk while gaining exposure to possible exponential gains. In many cases, you can buy 5,000 shares of a penny stock for $200 — $0.04 per share. A $0.20 per share increase would give you a 500% profit or $1,200. If the company goes bankrupt, you only lose $200.
Installing 5G super-fast networks has the power to boost the fortunes of technology and telecom companies — big and small. Penny stocks provide investors a low-cost way to share in this growth.
Trading in the penny stock market, however, can be highly risky. Relying on luck and tips is a strategy for failure. 5G penny stock trading requires you to be as informed as you can.