U.S. Markets open in 8 hrs 6 mins

7 Stocks to Watch Out For as 5G Deployment Gains Momentum

Radhika Pujara
1 / 8

7 Stocks to Watch Out For as 5G Deployment Gains Momentum

Here are seven companies well positioned to benefit from the enticing growth prospects of 5G.

Fifth-generation mobile networks or 5G is touted to revolutionize the way in which we interact with technology through faster download speeds and seamless transfer of data. The next-gen network is anticipated to provide 50 times throughput of the currently available standard 4G LTE network.

Moreover, 5G technology is designed to be more power efficient than any other available wireless network standard. Moreover, 3G and 4G networks lead to high cooling costs and are anticipated to have reached a tipping point in this data-driven age, consequently paving the way for early deployment of 5G.

5G is expected to unlock the full capabilities of emerging technologies such as augmented reality (AR), virtual reality (VR), artificial intelligence (AI) and the internet of things (IoT). Per ResearchAndMarkets data, global 5G market is expected to reach $251 billion by 2025, at a CAGR of around 97% from 2020.

Intensive infrastructure investments for 5G push and favorable trial testing results are positives in this regard. Smart connected homes, hospitals, factories and cities along with self-driving vehicles remain key beneficiaries of 5G.

5G complements IoT considerably. It enables advanced technologies to tap into IoT space, for instance, extending sensor driven IoT capabilities to drones, actuators and robots. Per MarketsandMarkets estimates, the 5G chipset market is projected to be $22.41 billion in 2026 registering a CAGR of 49.2% from the estimated valuation of approximately $2.03 billion by 2020.

The companies well poised to gain from 5G revolution, comprise both technology players developing 5G hardware and telecom providers supplying networking infrastructure.

Telcos Accelerating 5G Deployment Considerably

Given the alluring growth prospects of 5G, there is a palpable urge among telecom players to deploy 5G as soon as possible in a bid to gain first-mover advantage.

Industry players expect 5G standards to be finalized in 2019 at the earliest. Per Gartner, notable worldwide communications service providers (“CSP”) have commenced 5G trials. The research firm envisions that 3% of network-based mobile CSPs will introduce 5G, with commercial deployments to roll out by 2020 across the United States, Japan, South Korea, China, Singapore, Australia, Russia, Middle Eastern countries, Sweden, and European Union countries.

The telecom players are conducting field trials with their associated technology partners. Notably, the networking component providers have a significant role in the implementation of the network.

AT&T Inc. T and Verizon Communications Inc. VZ deserve a special mention in this regard. Both are making commendable progress with respect to 5G initiatives and remain well positioned to benefit significantly from the impending commercialization of the networks.

AT&T is gearing up to launch the first standards-based mobile 5G services in multiple U.S. markets by the end of 2018. The company has been striving to lay the foundation for mobile 5G network since 2017 and has completed network up-gradation in 23 major cities.

AT&T flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AT&T Inc. Revenue (TTM)

AT&T Inc. Revenue (TTM) | AT&T Inc. Quote

Verizon has started conducting field trials for its upcoming 5G wireless network with partners. The company is looking at mobile hotspot and home-based fixed wireless for initial deployment of the next-generation 5G wireless network in the United States in 2018. A full phased 5G wireless network is likely to be offered in 2020.

Verizon carries a Zacks Rank #3 (Hold).

Verizon Communications Inc. Revenue (TTM)

Verizon Communications Inc. Revenue (TTM) | Verizon Communications Inc. Quote

Technology Players Poised to Benefit From 5G

The associated technology partners enabling 5G deployment are also gearing up to make the most of 5G evolution. The tech players are designing solutions to aid enterprises, governments among others, to realize the benefits of 5G. The companies are also aiding telco counterparts to deploy 5G with suitable infrastructure.

Most notable companies are currently QUALCOMM Incorporated QCOM, Qorvo, Inc. QRVO, Skyworks Solutions, Inc. SWKS, Cisco Systems, Inc. CSCO and Intel Corporation INTC.

Qualcomm is one of the largest manufacturers of wireless chipset based on baseband technology. The company achieved a 5G data connection with the Snapdragon X50 5G modem chipset on 28GHz mmWave spectrum. Additionally, Qualcomm is teaming up with Verizon and Novatel Wireless for 5G NR mmWave technology trial. Notably, Qualcomm has been sort of a pioneer in driving Gigabit LTE and 5G in the industry.

Qualcomm carries a Zacks Rank #2 (Buy).

QUALCOMM Incorporated Revenue (TTM)

QUALCOMM Incorporated Revenue (TTM) | QUALCOMM Incorporated Quote

Qorvo launched five new 5G products in the recent past. Qorvo’s gallium nitride (GaN) technology has enabled it to support the emerging 5G infrastructure. The company’s expanding RF product portfolio aimed at enabling 5G is a positive. The company has also participated in dozens of 5G field trials and demonstrations. We believe an expanding portfolio enabling 5G deployment augurs well for the company.

Qorvo is a Zacks Rank #2 stock.

Qorvo, Inc. Revenue (TTM)

Qorvo, Inc. Revenue (TTM) | Qorvo, Inc. Quote

Skyworks’ growing clout in the connectivity solutions and 5G markets is a positive. Notably, the company unveiled Sky5 product suite with 5G antenna tuners in the recent past. With the introduction of this product, Skyworks aims to deliver bandwidth coverage ranging from 60 megahertz to 6 gigahertz.

Skyworks carries a Zacks Rank #2.

Skyworks Solutions, Inc. Revenue (TTM)

Skyworks Solutions, Inc. Revenue (TTM) | Skyworks Solutions, Inc. Quote

Cisco is another company to watch out considering its focus on 5G initiatives. The company’s ‘5G Now’ portfolio is developed to aid global service providers and consequently mobile operator customers globally by advancing their 5G plans.

Cisco is a Zacks Rank #3 stock.

Cisco Systems, Inc. Revenue (TTM)

Cisco Systems, Inc. Revenue (TTM) | Cisco Systems, Inc. Quote

Intel is leaving no stone unturned to position itself as a notable provider of 5G wireless infrastructure. The company is working in 25 5G trials. Intel continues to gain share as customers choose to transform their respective networks enabling 5G transition leveraging the company’s architecture. The company recently collaborated with SiTime Corporation in a bid to add Micro-Electrical-Mechanical Systems (“MEMS”) timing solutions capabilities to its 5G modem platforms.

Intel carries a Zacks Rank #3.

Intel Corporation Revenue (TTM)

Intel Corporation Revenue (TTM) | Intel Corporation Quote

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
Skyworks Solutions, Inc. (SWKS) : Free Stock Analysis Report
 
Qorvo, Inc. (QRVO) : Free Stock Analysis Report
 
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
 
AT&T Inc. (T) : Free Stock Analysis Report
 
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research