5G deployment is set to be one of the most significant technological innovations of the years to come, with implications for multiple industries so finding the best 5G stocks in invest in can reap big profits.
This is an area of great potential, but there are risks involved; make sure you know what you’re doing before you pour your money into 5G stocks.
What you need to know about 5G stocks
5G is the latest generation of wireless networks, superseding 4G and everything that came before it.
The technology will bring faster connection, fewer lags, and new technological possibilities, like software using the internet of things.
When you think of 5G stocks, the first companies that spring to mind are probably mobile phone manufacturers — like Apple — or network providers, such as Verizon Communications.
These companies indeed stand to gain enormously from 5G as consumers upgrade their phones and contracts. However, success isn’t a guarantee. Consumer interest may rely on the invention of a “killer app” — perhaps related to augmented reality gaming.
Some analysts argue consumer interest relies on the invention of a major app — perhaps related augmented reality gaming.
Yet it’s not just consumer-centric firms that will benefit.
5G will also be increasingly relevant for enterprise solutions. It could revolutionize sectors like healthcare, which badly need greater connectivity.
Then there are the parts manufacturers. Semiconductor companies and chipmakers like Qualcomm and NVIDIA could be big winners from the 5G boom.
This list contains a mixture of enterprise- and consumer-oriented firms involved in the phones, parts, and networks involved in 5G deployment.
12 Best 5G Stocks
Qualcomm is a semiconductor company set to benefit from 5G because it produces smartphone parts, including chips for Apple. It also owns Qualcomm Technology Licensing, allowing it to collect royalties from wireless devices and infrastructure.
The chipmaker also plans to establish 5G developmental platforms, such as AI and robotics products that use 5G.
Qualcomm exceeded analysts’ expectations in the third quarter of the fiscal year, earning 86 cents a share instead of 71 cents a share. Going forward, it could earn $1.15 a share for the next quarter.
As a bonus, Qualcomm expects to receive almost $2 billion in September from a legal settlement with Huawei.
As the graph below shows, Qualcomm’s value has sharply increased recently, and it’s likely to keep rising.
As the company continues to make money from selling more 5G chips, some analysts predict 5G solutions could contribute up to $5 billion to its revenue. If you believe 5G will be a profitable business, the success of Qualcomm is almost inevitable.
Nvidia creates chips and graphic cards, both of which will be essential for powering 5G networks and keeping them running fast.
Its smart graphic processing units help stop bandwidth wastage in virtual radio access networks, allowing the transfer of bandwidth from one machine to another. It’s a market expected to grow at around 128% per year by 2024.
Nvidia is also one of the biggest data center processor providers for cloud computing. Cloud applications will use 5G to promote “edge computing,” which uses data at the “edge” of a network in real-time with no lag. The firm is already benefiting financially from this innovation.
Basically, Nvidia is bound to play a huge role in ushering in many futuristic technologies — not just edge computing but also self-driving cars and robotics.
Apart from the dip when Coronavirus first hit, Nvidia has been on an almost linear growth path, and its stock price increased exponentially after recovering from the crash.
It exceeded expectations of analysts last quarter in terms of both top-line profits and adjusted earnings.
This could well be an exciting growth stock in the years to come, and a fantastic option for any futurists.
Nvidia and Ericsson recently partnered to bring greater efficiency through building efficient radio access networks for 5G. If you’re convinced Nvidia will be successful, chances are you’re also willing to bet on this stock.
Ericsson is a big player in the 5G world in its own right. The company sells telecommunications equipment, services, and software.
It currently has a 27% market share in 2G, 3G, and 4G mobile networks, and now it’s hoping to delve into the world of 5G, too.
The company has already signed more than 100 deals to help its customers upgrade their services to 5G.
As you can see below, Ericsson has had an impressive recovery since it bottomed. We’re talking about a multi-billion dollar company with good fundamentals and some promising developments to come — what’s not to like?
Ciena is another telecommunications equipment provider. It helps companies set up their optical fiber networks; essential equipment for 5G since they provide unlimited bandwidth. Ciena’s clients include big-name companies like Vodafone and Verizon (which features lower down on this list).
Ciena’s clients include big-name companies like Vodafone and Verizon (which features lower down on this list).
It also provides related solutions like routers, network software, and transport networks optimized for 5G.
Currently, Ciena has nearly a quarter of the optical network hardware market, a segment set to grow 6% until 2024.
Although there was an initial crash around March, Ciena has mostly benefited from the pandemic thanks to the increased need for those working at home to remain connected.
Ciena’s stock price has been increasing at an alarming rate recently, and there’s no reason to think this upward trend won’t continue thanks to the number of huge companies working with Ciena to get ready for 5G. Analysts believe the stock price remains undervalued and is in a great position to grow over the next few years.
Although Nokia might not be the popular phone manufacturer it once was, it remains a major supplier of infrastructure equipment to wireless companies. The company is worth around $24 billion — not exactly small fry.
It might not be the obvious choice for a 5G stock, but don’t discount Nokia.
It currently has 67 5G contracts and has won almost every bid it’s made so far. Nokia also has less reliance on China than some of the other companies on this list, which could turn out to be a blessing if more countries impose restrictions.
Although Nokia’s stock price fell after the market drop, it’s since recovered to higher than its pre-Covid level. In fact, over the last six months, it’s risen by around 15%. Bank of America has a $4.80 price target.
T-Mobile US (TMUS)
T-Mobile is the third biggest mobile network in the US — of course, it plans to take advantage of 5G.
The network is currently ahead of competitors AT&T and Verizon Communications in terms of 5G deployment in the US, already covering over 200 million people.
Some analysts think it could be the first wireless carrier with a full 5G network throughout the US.
That’s not the only piece of good news. T-Mobile signed a merger deal with Sprint this year, making it a strong competitor against bigger networks.
It also plans to use midband frequencies, which analysts say is a key factor for stock value.
T-Mobile may be the underdog, but it’s stock performance since April has been impressive, and Bank of America has a $110 price target. All in all, it looks like a very promising investment.
As a major smartphone producer that expects to launch its new 5G iPhone later this year, Apple is set to be a significant beneficiary of the 5G boom.
It’s a popular choice for investment thanks to its strong record, but remember that the best time to invest is when a stock is undervalued, and the price of Apple’s stock is currently soaring.
Analysts have predicted the new 5G model could still spark an upgrade cycle. However, its success will partly depend on how expensive the phones are and whether consumers can still afford to upgrade during a recession.
After an initial dip, Apple’s stock price is now well beyond its initial point before the crash. However, many analysts think there’s still room to grow.
Broadcom is a semiconductor firm that makes chips for industry, enterprise storage, and wireless communication — including chips for 5G base stations. It’s different from the competition because its chips use film bulk acoustic resonator technology, which will become more relevant as the world catches on to 5G.
It’s different from the competition because its chips use film bulk acoustic resonator technology, which will become more relevant as the world catches on to 5G.
Like most companies, Broadcom took a sharp hit after Covid, but it has since made a full recovery. It seems in a great position for the future, with impressive cash flow; Bank of America has given the stock a $360 price target.
Broadcom may not experience serious gains from 5G for another year or whenever new 5G smartphones become more mainstream. However, it should benefit from an Apple launch in late 2020.
Of course, it’s good news for investors that growth is still to come — so you might consider getting on board while the stock price remains undervalued.
Analog Devices (ADI)
Analog Devices is another semiconductor company that will play a large role in 5G implementation. But it’s more than just that — the company is vital for 5G radio signal chain technology, owning around a 70% market share in the field.
The stock price took a massive hit during the Coronavirus crash, and US-China relations and problems with Huawei didn’t help. However, since then, it has steadily recovered, with a few peaks and dips along the way.
Forecasts for Analog Devices aren’t unanimously positive. Some analysts think its top line will fall 8% this quarter or expect to see falls in stock prices — but this decline is likely temporary.
Revenue from communications is increasing and 5G should only accelerate this trend. If you’re prepared to take the risk, investing when prices fall could be a smart move. Bank of America set a $140 price target for the stock over the next few years.
Verizon Communications (VZ)
Along with T-Mobile, Verizon Communications is one of the primary US network providers. Its stock price has been shaky over the last few months with no clear trend, so this isn’t an investment for the faint-hearted. However, this could be a great opportunity to buy into an established company likely to gain from 5G.
Verizon has plans to increase its 5G sites by 500% this year, ready for the deployment of its network. It also hopes to gain from more homes demanding 5G wireless broadband services.
The stock price’s recent performance has been inconsistent and is yet to fully recover to its pre-Covid peak. However, thanks to its loyal customer base and strong balance sheet, it’s likely to succeed in the long term. Are you prepared to take a leap of faith?
Skyworks Solutions (SWKS)
Skyworks Solutions may be a minor chipmaker compared to some of the 5G stocks on this list, but that’s what makes it so exciting.
Despite a more modest size, Skyworks Solutions sure has some notable contracts. One of its biggest clients is none other than Apple, so it stands to benefit from any success the company has, including the release of a new 5G iPhone.
Its most recent quarterly report may seem unimpressive on the surface (revenue down almost 4% compared to the year before), but it still surpassed the predictions of analysts. Research firm Argus raised the price target recently from $112 to $146, proving the optimism some pundits now feel toward the stock.
The firm suffered after having to curtail its relationship with Huawei after restrictions imposed. But, after an initial financial hit, it now seems set for a successful end to 2020. The stock price is on a steady upward trend, and this only seems likely to increase further.
Inseego is a telecom infrastructure company that produces Fixed Wireless Access routers and mobile hotspot devices. This equipment is complementary to 5G deployment, meaning Inseego could gain hugely.
The company saw its stock prices grow toward the end of last year in anticipation of the emergence of 5G — its revenue grew by 17% in the first quarter of 2020.
After the market crash, its stock price saw a stark recovery, followed by peaks and dips. But, as a premier manufacturer of parts that are essential for 5G, Inseego is a company to watch over the next few years.
Consumers and businesses alike will be more likely to want its routers, cables, and hotspot devices after the introduction of 5G. Buying in while this is still a small-cap business could prove to be a smart move.
5G stock FAQs
Are 5g stocks a good investment?
5G could be a technological innovation that proves to be a game-changer for both consumers and enterprises over the next few years. Of course, no investment is risk-free, so make sure you do your research before putting your money into 5G stocks. It’s best to understand the underlying technology and not just the hype.
When will 5G stocks take off?
There have been many tensions regarding 5G recently after US-China relations became problematic and the pandemic slowed down 5G implementation. However, in late 2020, the rollout of 2020 should happen, which will trigger smartphone and other technological upgrades. At this point, analysts expect 5G stocks to take off. However, to earn the most from price increases, it’s best to invest before this happens.
What 5G stocks are under $10?
One of the cheapest 5G stocks available is Nokia, which has a stock price currently fluctuating between $4 and $5. Ericsson recently spiked up to around $11, but it may drop down to below $10 again.
Where can I buy 5G stocks?
All the stocks listed above trade publicly in the US. There are various brokers you can use to invest in stocks, including TD Ameritrade, Fidelity, Charles Schwab, and E*Trade.
Why invest in 5G stocks?
Anyone looking for high-growth stocks to invest in should consider companies involved in 5G. The best time to invest in a company is before its technology achieves mainstream success, because the stock price remains undervalued. This may be where we stand now with 5G. According to forecasts, there will be around 120 million 5G smartphone shipments in 2020, showing a vast market.
We’re yet to know whether 5G will take the world by storm or slide into the background, but chances are that it’s here to stay. As we stand on the brinks of mass 5G network deployment and a huge upgrade cycle involving major phone companies like Apple, it’s a vital moment for investors. Will you get involved or stay on the sidelines?
If you’re looking to invest in a stock related to upcoming technology, a 5G stock is an option to consider seriously.
Naturally, some people are more willing to take risks than others. If you’d like to continue researching before making big investment decisions, be sure to sign up for my newsletter, where I share exclusive content to help you trade and make gains.