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5G technology stocks cover a vast range of innovations, from driverless cars to cloud computing. And they are multiplying by the minute.
That's why Allied Market Research projects 11,977% growth for the 5G industry. It's worth around $5 billion today, but it has the potential to reach $667 billion by 2026.
While there are all sorts of companies connected to the 5G push, one of the best growth opportunities is in 5G infrastructure. These are the companies that make the systems work, and they're just heating up right now.
But it's important you don't go in blind. 5G is a very technical sector, and you will want to understand the waters before diving in.
Today, we're going to help you do that.
You see, 5G is going to change the way the world works. With speeds up to 100 times faster than 4G, you're going to see a spike in mobile capability like never before.
Imagine a doctor performing surgery remotely. Imagine telling your car where to go, then getting there without moving a muscle.
But 5G technology goes so much deeper than that. From chipmakers to cell towers to software as a service (SaaS), there are wealth of opportunities to profit in the 5G market.
So we want to talk about the latest of what's happening in the 5G world and what sectors are best to invest in. Then we're going to show you some of the top 5G stocks to buy, including one we think has the biggest upside right now...
What's Happening with 5G Networks
5G is currently in the process of being built all around the world. The 5G network will be comprised of many different cell sites that spread radio waves across different areas to achieve near universal coverage.
This is similar to how 4G works. The difference is that 5G uses much larger channels to transmit radio waves than 4G.
According to PCMag, 4G channels are 20MHz and can be bonded together for 140MHz at a time. 5G channels can be up to 100MHz alone, and they can bond together for as much as 800MHz - that is what Verizon Communications Inc. (NYSE: VZ) has been up to.
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Verizon was one of the earliest developers of 5G infrastructure in the United States. The company started offering 5G services in Chicago and Minneapolis in Spring 2019. Both Verizon and AT&T Inc. (NYSE: T) became leaders in the race after launching their 5G networks in late 2018/ early 2019.
But these weren't the first to do so nationwide.
The first America-wide 5G network came from T-Mobile Corp. (NASDAQ: TMUS) in December 2019. It reports covering "more than 200 million people and more than 500 cities and towns all across the country."
That's another benefit of 5G that did not exist with 4G. Because of the broader bandwidth, people in rural areas that previously didn't have Internet access will have a better chance of connecting.
The power of 5G networks is now on display after a merger was completed between T-Mobile and Sprint Corp. on April 1 this year. These companies aren't as big as AT&T and Verizon in revenue, but they do control more of the communications bandwidth.
Internationally, you have companies like Ericsson (NASDAQ: ERIC) and Nokia Oyj (NYSE: NOK) leading the charge with 5G infrastructure. But China's embattled tech giant Huawei is also developing its presence in countries like France and Germany.
Huawei is a major leader in 5G infrastructure and 5G chips. Serving the world's biggest population as well as those in other countries, it has been a force to reckon with.
But controversy has always accompanied Huawei's success. The company was banned from the United States for a time, before discussions in recent months about whether restrictions should be loosened to avoid hurting U.S. companies that work with Huawei.
Still, as a Chinese company that is not publicly traded, you can't invest in Huawei. However, we're going to show you some of the best 5G infrastructure companies to invest in now, starting with the sectors they operate in.
Let's talk about why 5G infrastructure stocks could give you the most mileage investing in 5G...
Why Invest in 5G Stocks?
5G is such a broad field, you're going to see a lot of different sectors that provide many different goods and services to make 5G happen.
One of the most important and considered 5G stock sectors is 5G chip stocks. These are the chips that go into phones, computers, towers and more, basically the power source behind 5G technology.
Some of the best 5G chip stocks are Qualcomm Inc. (NASDAQ: QCOM), Broadcomm Inc. (NASDQ: AVGO), and Skyworks Solutions Inc. (NASDAQ: SWKS).
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So 5G semiconductors will certainly power 5G networks. But investing in the 5G production line isn't necessarily "linear." 5G is such a huge, all-encompassing industry that investing in a single 5G stock could mean investing in a web of other wireless devices. You could be investing in an underlying technology, or the infrastructure that holds it all together.
Yes, semiconductors stocks give you access early in the production line, as long as they continue making chips. But 5G infrastructure is another extremely effective way to get your foot in the door of this industry.
With 5G infrastructure stocks, you're investing in a much more consistent stream of income. There are companies out there, which we'll cover in a minute, that collect rents from 5G cell tower locations. Others are commissioned to build towers. They benefit as long as wireless services exist.
5G investors might gloss over these stocks because they aren't a smartphone or some other tangible piece of technology you interact with every day. However, you shouldn't stop there.
In fact, there are plenty of sectors in the 5G industry offering great profit potential in the years to come.
Different 5G Wireless Investing Opportunities
Finding the best 5G stocks can be tricky, especially in an industry with so many arms and legs. A great place to start is the people who supply the 5G network itself...
5G Network Stocks
5G networks are supplied by telecom companies. There will be different 5G networks with different capacities, some more than others. Investors will want to look at the 5G networks with the greatest capacity for improvement. AT&T and Verizon, for example, don't have the most bandwidth right now, but they are a couple of the biggest network providers by market cap. So do not write them off simply because T-Mobile is sprinting from the jump. This is a long race.
After 5G networks, you have 5G chip stocks. This is where you start getting into the hardware, as opposed to comparing radio waves. 5G chips are, literally, the chips that power devices connected to 5G. Companies like Qualcomm Inc. (NASDAQ: QCOM) and Intel Corp. (NASDAQ: INTC) develop these chips for laptops, smartphones, smart watches, and other smart devices. They could even develop them for self-driving cars down the road. The first 5G smartphones using Qualcomm chips arrived in 2019, from Samsung. Apple's first 5G iPhone is rumored to arrive late 2020 or early 2021.
Software for 5G
Next in the 5G supply chain, you have the 5G software. New, resilient software is required to adapt devices and networks with this unprecedented power. For this, 5G investors can look at Cisco Systems Inc. (NASDAQ: CSCO) for cloud-based 5G solutions. They can also look at companies that support business infrastructure, which will provide those solutions that help businesses adapt. One example is ServiceNow Inc. (NYSE: NOW), which provides a platform to support companies' digital communication infrastructure. In fact, ServiceNow supports Microsoft Corp. (NASDAQ: MSFT) with its Azure cloud solutions.
That's a good starting point for 5G investing. But the future looks even more profitable as technology merges...
The Future of 5G Technology Stocks - Artificial Intelligence
We've covered 5G chips and infrastructure. But the truth is that, over time, there will be increasingly more backdoor opportunities to invest in 5G.
That's because 5G is enabling entire new waves of technology that previously couldn't exist. One of those is self-driving and connected cars. Another could be autonomous drones delivering food to your door, made-to-order by a robot.
This is a system that all needs to work in sync to accomplish its goals.
According to Counterpoint Research, there will be 125 million connected cars on the market by 2022. That would require the market to grow 270% in two years.
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5G is behind that capability. You see, connected cars - especially self-driving cars - will require powerful wireless performance to respond in real time to events on the road and driver commands, and store and transmit other data.
Microsoft Corp. (NASDAQ: MSFT) also has a new Microsoft Connected Vehicle Platform for this purpose.
The platform is based in the Microsoft Azure cloud, which will power faster and more accurate navigation and communication than ever before. Systems like these, as cars become more Internet-based, could allow car owners to run diagnostics that only mechanics could have performed previously. Or, if there is an emergency, the car itself can call the dealer on the spot to have it dealt with.
This is just one example of a futuristic 5G technology coming down the pike. Expect more from cloud computing, AI, Machine Learning, Internet of Things, and much more.
Here's the latest catalyst for 5G artificial intelligence. Then we'll show you some of the best 5G stocks to watch as it develops.
How AI Is Already Helping 5G
The latest 5G news has a lot to do with 5G infrastructure. Samsung recently debuted an artificial intelligence solution to adjust 5G antennas using drones.
This is meant to replace the need for people to climb high towers, which can be dangerous and time consuming. With this solution, the same can be done in 15 minutes using a smartphone.
Behind this solution, artificial intelligence or AI servers actually measure the position of the antenna and notifies the operator whether the antenna needs tweaking.
Samsung successfully tested the system in Seoul, South Korea. It's going to be a huge benefit to the future of widespread U.S. 5G. As the network connects us further, society will be increasingly dependent on the resilience of these 5G antennae. A short could be catastrophic, even.
5G is benefiting from drone technology in this case. But 5G is going to return the favor down the road. The faster network is expected to expand what we can accomplish with drones. In addition to monitoring towers for issues, drones have already been used in emergency response and package delivery. Adding AI to the equation will make the drones smarter and faster in these functions.
We should expect Samsung's drone-based AI network sometime later this year.
Drones are expected to handle a variety of tasks in the 5G era, including various remote monitoring and emergency response functions, as well as policing, package deliveries, and video recording - assuming future 5G network bandwidth lives up to expectations. But drones' use in helping to actually build out 5G networks is a new twist that - along with future AI innovations - could eventually lead to constantly self-improving networks.
Samsung plans to launch its drone-based AI network verification and adjustment system globally later in 2020.
Now, Samsung is also not a company you can invest in as of now. But there is a 5G stock that will benefit greatly from AI and 5G working together.
Here is one of our best 5G stocks to buy now...
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