Allied Market Research predicts the 5G technology sector will explode from $5.53 billion today to $667.90 billion in 2026. An 11,977% projection.
Today, we're going to show you a 5G stock with a hand in every part of that growth.
That 122% compound annual growth rate (CAGR) for the industry might sound too good to be true at first. The average S&P 500 CAGR is a mere 7.20%. I'll be the first to admit that it sounds crazy.
But when you think about it, almost every technological advancement on the horizon either depends on 5G, or it's preparing for it. 5G is a landmark in human history.
We're talking autonomous vehicles and remote surgery. Virtual assistants that are convincingly human. Artificial Intelligence-powered fridges and mirrors. A completely streamlined life.
Those are only some of the innovations resulting from the 100x faster speeds of 5G. And they're going to create hundreds of new, lucrative industries.
Our 5G stock today is not behind any new cell towers or mobile hardware powering the 5G network. Instead, we're looking at some of the soft infrastructure everyone is going to need in place before 5G arrives.
In order for companies to provide those futuristic products and services, their operations need to be ready for those speeds. And this 5G stock is critical in getting businesses prepared.
In fact, it's doing this for some of the biggest tech companies in the world...
What's Moving 5G Stocks in 2020
Cloud computing is one of the most important movements heading into a 5G-connected world.
One reason is that cloud-based innovations are simply more efficient than on-site networks.
Think Google Docs from Alphabet Inc. (NASDAQ: GOOGL). It can be accessed from anywhere. Your changes in a document save in less than a second. If you want to access those changes from another machine, all you need to do is hop on your Google account.
Free Guide: Today's volatile market is perfect for making money with options, and you can learn from a pro with Tom Gentile's Options 101: The Easiest Options Guide You'll Ever Read. Click here to get it.
Now, compare that to before Microsoft Corp. (NASDAQ: MSFT) developed a cloud-based Word app. The entire platform was housed on a single machine. If you wanted to access it from another machine, you'd need to transport it via an external drive. We've all forgotten our USB thumb drives at some point in our lives. Plain inconvenient.
The cloud is easier and faster. So businesses everywhere are transitioning. Oracle Corp. (NYSE: ORCL) expects 80% of businesses to be running on the cloud by 2025.
A large part of that transition is preparing these cloud-based companies to operate with a 5G network. But it's not a simple switch. For some businesses, making mission-critical information accessible from anywhere might seem dangerous.
Think about how you'd feel if someone asked you to store your social security card and birth certificate on a Google doc. All a hacker would need is your name and password to steal them. But companies like the one we're talking about today build environments to prevent that from happening. They set up things like private VPNs and two-factor authentication and make them work in sync for the enterprise.
In short, today's 5G stock is a cloud computing company that specializes in helping companies establish a workflow on the cloud. And as of this year, they're "doubling down" on 5G.
This company is serving some of the biggest names in the world. In fact, it's basically holding Microsoft's hand en route to "cloudification"...
Why Microsoft Relies on This 5G Stock
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
As Money Morning Defense and Tech Specialist Michael Robinson says, "Every company is a tech company." And ServiceNow Inc. (NYSE: NOW) provides information technology (IT) services to keep these companies running smoothly on the backend.
One of its main clients is Microsoft. ServiceNow hosts all its services on the Microsoft Azure cloud platform. That's made this company a "key strategic partner" with Microsoft.
The main function of ServiceNow is to line up the digital workflow inside a company. It ensures everything in IT runs smoothly, from communications to storage, security, and everything in between.
It's molding Microsoft's operations from the inside out to make the company more agile.
It does the same for several other companies as well, including AstraZeneca Plc. (NYSE: AZN), chip leader Broadcom Inc. (NASDAQ: AVGO), and Kimberly-Clark Corp. (NYSE: KMB).
Now that the coronavirus pandemic has forced many of us to telecommute, the demand for ServiceNow's services will skyrocket.
That's already been reflected in the stock price this year. While stocks were falling amid the coronavirus crash, ServiceNow shot up 27%.
At the start of the year, ServiceNow announced that it would be "doubling down" on telecom in anticipation of the new connected services 5G would bring. For that, it's partnered with Accenture Plc. (NYSE: ACN) on a telecom solution. An Accenture rep called 5G "one of the highest priorities" for service providers like ServiceNow.
NOW Stock goes for about $370 right now. This might seem expensive, but Michael Robinson expects it to double down the road.
Would you pass on Amazon.com Inc. (NASDAQ: AMZN) or Alphabet Inc. (NASDAQ: GOOGL) at $370 if you knew they'd reach over $1,000 and $2,000 down the line?
A consistent relationship with Microsoft, and other partnerships, gave this stock a healthy cash flow of $898 million for 2019, up from $567 million in 2018, a 58% increase. But if 5G is truly poised to grow by nearly 12,000%, ServiceNow's services will be even more in demand.
And as more companies adopt the cloud, this is going to be one of the most formidable tech stocks in the world.
Action to Take: ServiceNow Inc. (NYSE: NOW) is the premier tech stock that no one is talking about. It's a cloud computing giant partnering with some of the biggest names in the world. And it's going to rocket with the 5G revolution. Money Morning's Michael Robinson expects it to double down the line. You can pick it up for $370 today.
The New Rules for Buying Low and Selling High in Today's Market
If you want to buy low and sell high in today's market, there's only one rule you need to follow.
Today, Tom Gentile is sharing everything - including the exact formula that could magnify your profits faster than you could ever believe.
Follow Money Morning on Facebook and Twitter.
About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.