Every month, in a small conference room on 12th Street SW in Washington, D.C., the U.S. Federal Communications Commission (FCC) chair, along with the FCC commissioners, gather to discuss America's communications system.
During these meetings, the FCC approves or denies technologies and budgets.
The votes they make can mean billions to American corporations developing these technologies.
The next meeting takes place this Thursday, April 23. And it could have major ramifications for one 5G stock in particular...
What Thursday's Meeting Means for 5G Stocks
During this Thursday's meeting, 5G will be the focus.
5G is on the FCC's mind after it came across a significant problem with 4G. It's one it needed desperately to fix with 5G's rollout.
It was recently uncovered that mobile carrier coverage maps didn't cover what they had claimed. It turns out that promised speeds didn't meet expectations 40% of the time and that some tower locations did not even exist.
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Coverage is more important than ever. Especially with a large percentage of the workforce now working from home. This under-coverage (unreported or not) is a significant issue for the U.S. economy.
This is all set to change on Thursday.
That's when the FCC will vote on a $9 billion fund to expand 5G to the far reaches of the United States. It's an issue that is very important to Ajit Pai, the current chair of the FCC. He believes that 5G needs to narrow the digital divide and that rural Americans should also benefit from wireless innovation.
Approximately 97% of the U.S. land area is in rural counties, with 60 million people living there. That's roughly 20% of the population.
It's a massive amount of territory to cover, and 5G is perfect for this space, especially when you consider how expensive it would be to get fiber to all those locations.
Just think of all the new towers, antennae, and networking equipment that would need to be put in place in order to get 5G across the entire United States.
Projects with this kind of scope and spending don't come around every day.
That's why I'm going to show you one 5G stock set to capitalize on $9 billion of new 5G spend.
This 5G Stock Could Take a Chunk of the FCC's $9 Billion Fund
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Keysight Technologies Inc. (NYSE: KEYS) is well positioned for the enormous growth of the 5G economy. It's one of the leading providers of test and measurement solutions for wideband RF and millimeter-wave technology.
Since 5G can be used across a wide variety of sectors and technologies (like fully autonomous cars, remote surgery, and exponentially decreased download speeds), companies will need ample means to test how their technology works across different kinds of platforms.
To learn parallel parking, you don't start by going to downtown NYC and trying to squeeze between two cars. You go to a parking lot with cones to mark off where you need to go. And that's exactly what Keysight gives companies; a parking lot to test its technology.
As 5G expands, so will Keysight.
Every time chip or equipment manufacturers want to make sure their products work correctly, they go to Keysight.
They're already translating 5G success into bottom-line profits, and that will only continue to expand as more cities offer 5G.
Right now, Keysight is in a great financial position. Net Income is up over 200% from 2018 to 2019, and its cash position has grown in lockstep up 60% from the year earlier.
The best part of all is that it has done this while cutting down on debt. In 2019, long-term debt was cut 12.7% from $2.048 billion to $1.788 billion.
Why Startups Can Have an Edge During a Recession
Uber, Airbnb, Slack, Pinterest, and Venmo have something big in common - something other than their big names.
These startups were founded during the last recession.
And now, some of the most iconic companies of our time could launch into Fortune 500s during days like today.