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If you have a smartphone right now, chances are it's running on 4G. But not for long...
We're going to show you the profit opportunities in by taking a look at the companies that make 5G chips today.
The 5G network infrastructure market nearly doubled last year, from $2.2 billion to $4.2 billion. But this is only the beginning of the growth we're about to see as the 5G chip stocks begin to pop.
That's because 5G contains many subsectors.
Apple Inc. (NASDAQ: AAPL) announced on June 9 that it would begin production of 5G Apple iPhone models starting next month. Meanwhile, telecom companies are building out their 5G networks across the world.
But an important sector of the 5G market that people often miss is 5G semiconductor stocks. Once we get through our top five companies that make 5G chips, we'll show you how to take advantage of a $17.14 billion opportunity in 5G stocks...
No. 1: Qualcomm Inc.
Qualcomm Inc. (NASDAQ: QCOM) is a San Diego-based chipmaker with specialties all across the tech field. It makes different kinds of wireless software too. This company has made chips for Apple iPhones in the past. A legal battle over patents kept Apple from using Qualcomm's chips in their 2019 line. But now that they've settled, it looks like the latest 5G iPhone will be powered by Qualcomm's 5G chip. Shares of QCOM go for $84 right now. But analysts think it could reach $110 in 12 months. A nice 29% gain.
No. 2: Broadcom Inc.
Broadcom Inc. (NASDAQ: AVGO) also has a strong relationship with Apple. In fact, 20% of its revenue in 2019 was from Apple. They currently have an agreement to supply $15 billion of wireless parts for the products Apple will be releasing over the next three and a half years. Its other products cover data center, networking, software, broadband and storage services. The stock currently trades for $293. The high 12-month target is $372. That's a potential gain of 26%. The company also pays a nice 4.4% dividend.
No. 3: Xilinx Inc.
Xilinx Inc. (NASDAQ: XLNX) focuses on processing platforms across many industries. They power technologies like data centers, artificial intelligence, machine learning, aerospace, and defense. The company is currently providing a platform for Samsung to deploy its 5G solutions. The platform is called ACAP, or "acceleration platform," designed to "accelerate 5G commercial deployments." This makes Xilinx a major player in the 5G market. You can buy shares for $89 today. They could hit $115 by the end of the year. That's a 29% jump.
No. 4: Skyworks Solutions Inc.
Skyworks Solutions Inc. (NASDAQ: SWKS) specializes in chips for radio frequency and mobile communications. And believe it or not, it's another Apple supplier. Apple contributed 51% of this company's revenue in 2020. This company's revenue took a hit after Chinese company Huawei was blacklisted by the United States. But it has made up for that by selling more chips through in the Internet of Things (IoT) market, another key 5G sector. You can buy shares of SWKS for $123 today. Analysts put it at $165 in 12 months. That's a 34% gain.
No. 5: Intel Corp.
Intel Corp. (NASDAQ: INTC) is another California chip company. You've probably seen its sticker on laptops before. It supplies Apple, Lenovo, HP, and Dell. More than just semiconductors, this company manufactures essential computer "guts" like network interface controllers, integrated circuits, and embedded processors. Intel put together an "Open Innovation Lab" with NASA and T-Mobile this year. They are going to explore new 5G use cases involving AI and Internet of Things. You can buy shares of INTC for $59 right now. The 12-month target is a nice 44% gain at $85.
Of course, all of these stocks are great to hold in the advent of 5G. But there are even more opportunities in here.
This is one of the best 5G stocks to buy outside of the chip sector...
The $17.14 Billion Trend Moving 5G Stocks
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.
Motley Fool and other publications are making a really big deal about Apple's September launching. But I can't find anything significantly new. Can you advise? I like Qualcomm but it has quadrupled in price in three months and must be overpriced. Is there any one technology more "impressive" than semiconductor manufacturing, as, for example, in the "disruptive industries" and in biomedical. Your responses will be appreciated. Thank you. Gwen.