The best 5G stocks will evolve over time as business services delivered via cloud computing usurp consumer applications.
X Investors should look for updates on company earnings calls as more smartphones, laptops, autos and internet-connected industrial devices use 5G technology.
T-Mobile US ( TMUS ) and Verizon Communications ( VZ ) continue to ramp up 5G wireless broadband services to homes.They’re offering discounts on bundles of 5G broadband and cell phone services.
“Fixed wireless is the initial killer 5G app, private enterprise 5G will be next in 2024,” Oppenheimer analyst Tim Horan said in a note to clients.
Fixed wireless/5G home Internet services from T-Mobile and Verizon added about 3.17 million subscribers in 2022 – compared to about 730,000 net adds in 2021.
In addition, Iphone maker Apple ( AAPL ) always merits consideration as a 5G stock.
5G Stocks: Smartphone Outlook Meanwhile, the supply chain of Apple stock is a seasonal and cyclical opportunity for investors eyeing 5G stocks.
Chipmaker Qualcomm ( QCOM ) has warned of weakening global smartphone sales.
T-Mobile has gained 7% in 2023 after advancing 22% last year.TMUS stock holds the most 5G wireless spectrum among U.S.service providers.
Telecom network equipment makers expect spending on 5G infrastructure to slow in 2023 after booming this year .However, companies such as Verizon are finally moving traffic to stand-alone 5G “core” networks.
That will impact what types of network gear they purchase.
Semiconductor stocks offered an early play on 5G wireless and remain an opportunity.Investors have been cautious on 5G network gear makers and other infrastructure plays, like cell-phone tower operators.
Cloud Computing, 5G Wireless Synergy In the long run, 5G wireless services delivered to businesses via cloud computing giants like Amazon.com ( AMZN ), Microsoft ( MSFT ) and Alphabet’ s ( GOOGL ) Google could offer the best 5G stocks.Many startups are active in “edge computing.” Cloud computing infrastructure is expected to play a big role in deploying 5G wireless services.
“Over the past few years, the major telecommunications operators have all signed partnerships with the top cloud stalwarts to help provide greater network efficiency, reduced latency, and faster speeds in improving the entire 5G ecosystem,” Wedbush analyst Daniel Ives said in a note.
He added: “The opportunity for cloud providers arises from edge computing, which is putting data processing power closer to customers’ devices for better performance.As the push for 5G continues throughout the country, there is clear a multi-billion-dollar opportunity for cloud providers to win.”
Research firm Dell’Oro projects that 5G workloads on the public cloud will grow revenue at an 88% compounded annual growth rate from 2022 to 2026.Over that period, Dell’Oro estimates cumulative revenue at $4.6 billion.
5G Stocks: Capital Spending Jumps In 2022 South Korea and China lead in 5G network coverage while Europe lags.
Analysts expect 2022 to be a big year for capital spending by U.S.
wireless service providers.Some 5G stocks should get a lift as telecom firms ramp up spending on those networks.
Credit Suisse expects 2022 wireless capital spending to hit a record high of $39.4 billion.
Led by T-Mobile, wireless firms in the U.S.are deploying 5G wireless services using high-performance, midband radio spectrum.Verizon and AT&T ( T ) are playing catch-up and will spend the most in 2022 and 2023.
Dish Networks ( DISH ), a satellite-TV service provider continues its build-out of a 5G wireless network
Best 5G Stocks: Multi-Year Boom For Chipmakers Smartphones currently drive most demand for 5G chips.
Research firm Omdia forecasts that by 2026, 40% of all mobile subscriptions will be 5G, totaling 4.8 billion.In addition, annual 5G mobile service revenues are expected to reach $540 billion worldwide by 2026, representing 60% of revenues.
With China’s market already highly penetrated, Barclays expects India to be the fastest growing market for 5G smartphones from 2022 through 2024.
Aside from Qualcomm, other companies that make chips built into smartphones include Qorvo ( QRVO ), Marvell Technologies ( MRVL ), Skyworks Solutions ( SWKS ) Cirrus Logic ( CRUS ) and Analog Devices ( ADI ).
Naysayers still question the return on 5G investment for telecom companies.They point to the lack of a 5G “killer app” for consumers.
Enterprise Market Could Be Revenue Driver A wide range of tech companies are building 5G ecosystems for private networks that deliver business-to-business services.
Telecom industry group 5G Americas forecasts that the addressable market to incorporate 5G into private business networks will jump sharply over the next five years, to $16.9 billion in 2025 from $1.9 billion in 2020.
In many industrial settings, 5G infrastructure is expected to displace Wi-Fi-based services.
Pundits expect 5G wireless to have a role in manufacturing automation, cloud gaming, autonomous vehicles, drones and remote health care services.
In time, the breadth of 5G stocks will expand.The future of 5G wireless lies in the industrial Internet of Things, remote health care, drones and robotics, autonomous driving, smart cities and more.
For some 5G stocks, the long-term opportunity will be tied to new networks that blur the line between mobile and fixed-line infrastructure.
Some chipmakers sell into the 5G network gear market.They include Marvell, Broadcom ( AVGO ), Intel ( INTC ), Texas Instruments ( TXN ) and Analog Devices.Meanwhile, Xilinx ( XLNX ) makes programmable chips built into prototype network gear.
5G Networks Require Fiber-Optic Technology The global 5G radio access market will jump to $21 billion in 2024, up from less than $4 billion in 2019, research firm Omdia forecasts.
Further, 5G also is a long-term opportunity for network gear makers Ericsson, Nokia and Samsung.
Cellphone tower operators American Tower ( AMT ), Crown Castle and SBA Communications ( SBAC ) also could get a 5G boost, analysts say.
Crown Castle will be a 5G infrastructure partner of Dish Network.
5G networks will connect to fiber-optic networks for “long haul” purposes.That will provide reliability for emerging automotive, robotics and medical applications.Potential 5G stocks to buy include Corning ( GLW ), Ciena ( CIEN ) and other fiber-optic players.
Crown Castle makes “small-cell” radio antennas for 5G services in urban areas.The small-cell antennas — hung on utility poles or building rooftops — will require fiber-optic connections to local hubs.
Local government approval, though, is required to expand 5G networks.
Rysavy Research projects that there will be 1 million U.S.outdoor small cells by 2028, up 10 times from today’s levels.
How 5G Wireless Will Change Cloud Computing Edge computing deploys data processing, storage and networking close to sensors and where other data originate, near the “edge” of the network.The goal is to process and analyze data locally in real time rather than send it to faraway data centers in the internet cloud.
“The advent of 5G should mean the rollout of many new technologies we certainly haven’t yet imagined,” economist Ed Yardeni said in a recent report.”To make them possible, the tech gurus are saying that cloud computing will move from a cloud server far away to equipment on the edge of a neighborhood’s network.
Edge computing should continue to increase the speed of data transmission, but carriers will have to open their wallets to make it happen.”
Microsoft is selling global network transport and routing services to 5G network operators.Microsoft calls the initiative “Azure for Operators.” Microsoft purchased AT&T’s network cloud business.
Wireless Firms Find Cloud Partners Amazon Web Services and Google are also selling 5G-related cloud infrastructure services.AWS in December 2021 announced plans to sell private 5G network services to enterprise customers.
The AWS “5G in a box” service initially will use shared “CBRS” spectrum.In the long run, Amazon could partner with Dish for a 5G network, analysts speculate.
Verizon has partnered with AWS, Google and Microsoft to develop 5G cloud services.
Edge computing should be a big opportunity for chipmakers Nvidia and Intel, some analysts say.
Nvidia and Intel are the biggest providers of data center processors for cloud applications.
Mini data centers in neighborhoods will link to cloud-computing infrastructure.Nokia and Ericsson are developing 5G cloud gateways.
Dell Technologies ( DELL ), Hewlett Packard Enterprise ( HPE ), Nokia and others aim to capitalize on edge computing.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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