5G stocks

What Is 5G?

Most smartphones began running on 4G networks in 2010. However, the tech industry, and more importantly tech investors, are now gearing up for 5G – the latest and fastest in wireless cellular communication systems.

5G technology will use a higher-frequency band as compared to 4G technology. This frequency band will allow data to be transferred faster and smoother. In fact, in some tests, 5G has performed 200 times faster than 4G LTE.

Different Types of 5G Stocks

5G is the way of the future. It will bring faster speeds, less latency, and support more devices. As a result, there are different types of 5G stocks for investors to consider.

Network

Wireless networks and telecommunication companies supply 5G networks. Investors will be looking to networks that can upgrade its system to provide this new technology to consumers. For example, AT&T (NYSE: T) and Verizon Communications (NYSE: VZ) will likely be two of the first companies to utilize this new speed.

Chips

Investors may also consider 5G investments in the technology itself. Companies such as Qualcomm (NASDAQ: QCOM) develop chips for smartphones that support commercial 5G services. For example, Verizon and Samsung announced their plans to bring one of the first 5G smartphones, equipped with Qualcomm technology, to market in 2019.

Software

5G trends have shown a need for flexible software-based alternatives to major hardware upgrades of traditional networking gear. Businesses such as Cisco Systems (NASDAQ: CSCO) are launching cloud-based solutions to capture a share in the mobile 5G market.

5G Stocks – Risks and Analyst Concerns

Investors are getting ready as 5G trends heat up. The Federal Communications Commission (FCC) has designed the 5G FAST Plan (Facilitate America’s Superiority in 5G Technology). This comprehensive breakdown for supporting 5G technology leaves investors particularly hopeful.

As with any new technology, individual private companies are likely to compete to secure a portion of the new market. For investors, the risks come down to choosing the right players. The inherent risk of this new technology is that 5G news may not always be reliable. The major players are always changing, which may significantly impact an investor’s portfolio.

For example, Skyworks Solutions is a manufacturer of analog semiconductor products and chips for smartphones. It may currently be a dominant iPhone supplier and may play a significant role as iPhones require new chips to support 5G. However, that can quickly change in a competitive technology ecosystem if Apple (NASDAQ: AAPL) selects another supplier.

Alternatively, you may consider investing in exchange-traded funds or ETFs that include a basket of 5G stocks. This can help diversify your portfolio and 5G investments, while minimizing some risk in case one of the companies fail.