If you are keeping a check on the telecommunications industry, you know that 5G technology is going to be the most disruptive force that this sector has ever experienced. While 3G and 4G helped onboard the common people with the telecom revolution, 5G is going to give both individuals and institutions a much-needed boost to gain more from their online activities. It will also help cloud services a lot since data will be faster and more reliable.
Here are the best 5G stocks that you can invest in 2019.
Before you start looking at telecom companies, start with telecom equipment manufacturers. One of the prominent amongst them is Swedish company Ericsson which could play a crucial role in creating a 5G infrastructure for the world. The company recently teamed up with Oppo, a Chinese smartphone brand. It has a licensing agreement with high-growth Company. Because Huawei, a Chinese company, has faced national security allegations in recent times, Ericsson could be benefited significantly.
The company is already busy subverting expectations. Its Q1 profit this year was 4.9 billion Swedish krona, almost double of the 2.8 billion Swedish krona market expectations. Some of this profit is being contributed by the US, which is quickly creating the infrastructure necessary for 5g adoption.
Who doesn’t know about Qualcomm- the prominent chip manufacturer that has some of the best 5G tech IP in the world? The company will be manufacturing 5G chips for Apple this year (and continue for the next six years).
With just 5G enabled iPhones in the market, the company stands to win big and provide a significant dividend to its shareholders. The more of deals it strikes with other phone makers, the better its chances of profit.
Though Xilinx is not a well-known company like Qualcomm, it is one of the pioneers of the 5G chip making arena. The company could turn out to be a dark horse in the global 5G race and has even witnessed a massive 74% jump in YoY communications segment in the recent quarter.
It has a powerful system-on-a-chip technology alongside radio frequency tech that is useful for 6Hz or lower spectrum bands. This company definitely deserves a look.
Another infrastructure company on the list, Crown Castle is busy building new cell towers that could help on 5G connectivity for the users. As the manufacturers of the last link to customers, this company has the responsibility of providing better network strength and speed to the users.
Crown Castle is a specialist in building smaller cell towers that can beam signal strength over small distances instead of the previously used large towers that beamed over bigger distance. It already has 65,000 small cell nodes and will be taking the figure to 85,000 next year.
If you are looking for a reliable stock in your portfolio, opt for Cisco. Though the company already has a good stream of revenue via its data centers, it wants a bigger piece of the 5G pie. The company recently bought Acacia Communications, an optical component maker to make money via the hardware needed for 5G data.
The company now has better expertise to handle undersea and long-haul data movement, and it already has a short-range data movement infrastructure.
We finally talk about AT&T, the American telecom giant that has already introduced a mobile 5G network in half a dozen cities. It also has fiber deployment in over 11 million customer locations. The telecom giant is uniquely positioned to make 5G a mass adopted product soon.
It could be expected to continue its expansion. Though AT&T has a few legal troubles related to SIM swapping incidents and some controversy around the Time Warner deal, the company will blow past these tailwinds and prove to be a worthy 5G stock.
Did you dismiss Nokia as the phone manufacturer of the past? If yes, think again. The company beat consensus in Q2 of this fiscal thanks to its new 5G deals. It is supporting the world’s 5G infrastructure and has nine live 5G networks and 42 new commercial 5G deals.
It already has more than 300 commercial 4G customers who will be shifting to 5G in the next couple of decades. Nokia, therefore, has a very strong standing in the 5G market and is a company you can’t afford to ignore.
Despite being in trouble in the US, Huawei is one of the leading companies in the 5G sector. It is lobbying in Japan, Canada, Italy, Germany, and other countries to grab contracts.
The company continues to hold 22 commercial contracts for 5g deployment, which means that Huawei will be hard to overlook.
This telecom giant will make it to any list that mentions 5G. Verizon has a leaner operation model as compared to its rival AT&T, and it usually works in its favor. The company focuses extensively on fiber deployment and covers about 1,400 route miles per month.
It is already available in more than 60 cities, and Verizon will spend $17 to $18 billion this year as capital expenditure on building its network. Verizon also offers great speed. Handsets alone could expect speeds of up to 1.3 to 1.5 Gb. The average may go up to 2 GB, which is stupendous considering the speeds offered on 4G today.
Samsung will not just be creating a 5G revolution via its smartphones but also enjoy the privilege of being a prominent network solutions provider company for carriers. Verizon is banking on Samsung for fixed 5G networks for its commercial solutions.
It even works with AT&T to provide 5G ready equipment. If there is one company that will benefit from 5G in all directions, it is Samsung.
5G is going to be the biggest technology disruption in modern times. As it rolls out to new cities and countries and becomes a mass product, the companies listed above will be impacted positively. We still advise you to do your share of due diligence, check the financial statements and ensure that a company is suitable for your portfolio before buying their shares.
Disclaimer: The author does not have any position in the stocks mentioned. Also, the author may not be a certified financial advisor, and the opinions expressed should not be treated as investment advice.
Buying and selling of securities carry the risk of monetary losses. Investors are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.