5g stocks to watch
5g is the next stage in mobile communications. It’s about to kick off a revolutionary worldwide smartphone upgrade – and that makes 5g stocks some of the hottest picks to watch this year.
Want to invest in 5g? Check out these stocks
Barclays reports that 525 million 5g equipped smartphones will be sold in 2021, and 700m in 2020. China will the main market, other geographies like the US and Europe will be doing their part increase 5g penetration.
PCs and tablets too will soon be outfitted with this latest generation of mobile internet. It’s going to be big business. Very big business. It won’t just be smartphone manufacturers that will benefit. The entire infrastructure, from mobile networks to component and technology suppliers, will be driving the 5g economy from 2021 onwards.
The 5g stocks we’ve picked here represent that wider spectrum of firms that can potentially come away as champions for this next-generation tech. Take a look below.
Whenever there’s a revolution in technology, Apple is never far away. In many ways, it’s jumped the gun by launching the latest iteration of the iPhone, fully primed with 5g. the iPhone 12 is expected trigger an upgrade super-cycle, essentially an avalanche of smartphone shopping as consumers change up to the new model.
That’s what appears to be happening. Apple just reported its best ever single quarter with sales passing $110 billion and saw the highest number of iPhone upgrades ever too, according to CEO Tim Cook.
Wall Street expectations were blown away on the news, with AAPL EPS coming in at $1.68 – well above the projected $1.41. Q1 2021 revenues broke $100bn too. Essentially, Apple is reaping the 5g whirlwind in typical Apple fashion.
With 5g infrastructure rolling out in rapid order across Apple’s two key markets, the US and China, expect solid share performance as the upgrade cycle gains even more traction. AAPL is looking like one of the key 5g stocks to watch.
Marvell Technology Group
Without components, however, 5g is a lame duck. It’s companies like superconductor manufacturer Marvell Technology Group that are equipping smartphone and device manufacturers with the micro components they need to succeed.
Marvell has been busy on the acquisition front, picking up Inphi for a cool $10bn back in October 2020 in a move that will significantly boost its 5g capabilities. It’s also partnering with some big players to move the 5g rock along, such as Analogue Devices on multi-antenna radio units and with Samsung on multi-radio access technology.
In its latest earnings call, Marvell was reporting some good news, with CEO Matt Murphy commenting: “Overall revenue increased 13% year on year, driven by our networking business, which grew revenue 35% year on year. Strong 5G and Cloud product ramps are fuelling our ongoing success in these strategic growth markets.”
Stocks are looking healthy. MRVL has more than doubled in value in the past 12 months. Basing its expansion strategy around the 5g sphere could pay off with the continued global rollout of the mobile tech. It may be one to watch for those who want to invest in 5g.
Communications forms 20% of Analog Devices revenue, and the superconductor manufacturer sees 5g as a cornerstone of its growth strategy. According to its latest earnings report, Analog Devices predicts it can expand revenues from 5g-related tech and projects 19% year-on-year going forward.
We’ve mentioned above it has partnered with Marvell to develop radio-based technologies to help empower 5g communications. Marvell is using Analog’s transceivers in a massive multiple-input, multiple-output (MIMO) radio units – critical for the functioning of 5G networks.
According to research from Allied Market Research, the global massive MIMO market might enjoy a CAGR of 35% through 2027, hitting nearly $16 billion in revenue.
Analog’s revenues dipped 6% in 2020. However, analysts forecast that, thanks to rapid worldwide 5g adoption, its revenues may be about to skyrocket, with double digit growth forecast for 2021.
QUALCOMM is a chipmaker bridging the gap between iOS and Android. Consumers can be brand snobs, but component suppliers really don’t care if there’s business to be had and a communications revolution If you know your Android tech, then you might know the vast majority of Android-powered smartphones run using QUALCOMM Snapdragon processors. Crucially, it also supplies radios in the uber-popular iPhone 12s.
Long-term, there maybe more competition in the microprocessor space QUALCOMM currently dominates. Samsung, for instance, is developing its own Snapdragon rival, while China’s Mediatek has introduced its own line of 5g mobile processors for use in low-cost smartphones.
Then there is the issue of Apple. It probably wouldn’t be that much of a surprise if the world’s most famous tech company, and pusher of proprietary technology, designed its own 5g modems once its QUALCOMM deal expires in 2025.
For short-term plays though, it may be an idea to look at QUALCOMM. The above aren’t threats to its position right now. In fact, QCOM stock enjoyed a 76% rise across the last year, and it might be able to sustain its upward trajectory across 2021.
Following its merger with Sprint, T-Mobile has been pulled ahead in the US 5g race. Putting its heft deployment capability into practice, T-Mobile claims its 5g network now covers a 1.6m square miles, providing coverage to 280m people. Its Ultra Capacity 5g, i.e. its high-speed 5g service, covers additional 106m people cities in more than 1,000 US towns and cities.
In its last quarter, T-Mobile reported record-high total additions and record post-paid net additions, passing 100m. It appears surging ahead with its desire to invest in 5g is paying off. Customers are probably responding to the fact that T-Mobile offers the fastest 5g download speeds against rival US networks too, verified by Opensignal independent testing.
TMU stock has risen alongside its 5g investment, growing 62%. It could be one of the key 5g stocks to watch in 2021, but if other competitors can step up their 5g capabilities, T-Mobile may see its position as top dog challenged.