The best 5G stocks will evolve over time as business services delivered via cloud computing usurp consumer applications.
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Investors should look for updates on the company’s earnings calls as more internet-connected smartphones, laptops, cars and industrial devices use 5G technology.
T-Mobile USA (TMUS) and Verizon Communications (VZ) continue to increase 5G wireless broadband services in homes. They are offering discounts on 5G broadband packages and cell phone services.
“Fixed wireless is the initial 5G killer application, private 5G will be next in 2024,” Oppenheimer analyst Tim Horan said in a note to clients.
iphone maker Apple (AAPL) always deserves to be considered as a 5G stock.
5G Stocks: Smartphone Insights
Meanwhile, Apple’s stock supply chain is a seasonal and cyclical opportunity for investors looking for 5G stock.
chip maker Qualcomm (QCOM) has warned of weakening global smartphone sales.
T-Mobile has gained 7% in 2023 after advancing 22% last year. TMUS shares have the most 5G wireless spectrum among US service providers.
Telecom network equipment makers expect spending on 5G infrastructure to slow in 2023 after booming this year. However, companies like Verizon are finally moving traffic to separate 5G “core” networks. That will affect the types of network equipment they buy.
Semiconductor stocks offered an early opportunity in 5G wireless technology and continue to be an opportunity. Investors have been wary of makers of 5G network equipment and other infrastructure builders, such as cell tower operators.
Cloud computing, 5G wireless synergy
Ultimately, 5G wireless services delivered to businesses through cloud computing giants like amazon.com (AMZN), Microsoft (MSFT) and Alphabet’s (GOOGL) Google could offer the best 5G actions. Many startups are active in “edge computing.” Cloud computing infrastructure is expected to play an important role in the deployment of 5G wireless services.
“In recent years, major telecom operators have signed partnerships with leading cloud stalwarts to help deliver greater network efficiency, reduced latency and faster speeds to enhance the entire 5G ecosystem,” said Daniel Ives. , a Wedbush analyst, in a note.
He added: “The opportunity for cloud providers arises from edge computing, which is moving data processing power closer to customer devices for better performance. As the momentum for 5G continues across the country, There is a clear multi-billion dollar opportunity for cloud providers to win.”
Research firm Dell’Oro projects that 5G workloads in the public cloud will grow revenue at an 88% CAGR between 2022 and 2026. During that period, Dell’Oro estimates cumulative revenue will be $4.6 billion.
5G Actions: Capital Spending Leaps in 2022
South Korea and China lead in 5G network coverage, while Europe lags behind.
Analysts expect 2022 to be a big year for capital spending by US wireless carriers. Some 5G stocks should get a boost as telcos increase spending on those networks.
Credit Suisse expects wireless capital spending in 2022 to hit a record $39.4 billion.
Led by T-Mobile, wireless carriers in the US are rolling out 5G wireless services using high-performance mid-band radio spectrum. Verizon and AT&T (T) are catching up and will spend more in 2022 and 2023.
dish networks (DISH), a satellite television service provider continues to build a 5G wireless network
Best 5G Stocks: Multi-Year Boom for Chipmakers
Smartphones currently generate the most demand for 5G chips.
Research firm Omdia forecasts that by 2026, 40% of all mobile subscriptions will be 5G, with a total of 4.8 billion. In addition, the annual revenue of 5G mobile service is expected to reach $540 billion worldwide by 2026, accounting for 60% of revenue.
With the China market already highly penetrated, Barclays expects India to be the fastest growing market for 5G smartphones from 2022 to 2024.
Aside from Qualcomm, other companies that make chips embedded in smartphones include Qorvo (QRVO), Marvell Technologies (MRVL), Skyworks Solutions (SWKS) logical cirrus (CRU) and analog devices (ADI).
Detractors still question the return on investment in 5G for telcos. They point to the lack of a 5G “killer app” for consumers.
The business market could be an income generator
A wide range of technology companies are building 5G ecosystems for private networks that provide business-to-business services. Telecommunications industry group 5G Americas forecasts that the addressable market for incorporating 5G into private commercial networks will increase 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.
Experts expect 5G wireless technology to play a role in automating manufacturing, cloud gaming, autonomous vehicles, drones, and remote healthcare services.
Over time, the breadth of 5G stocks will expand. The future of 5G wireless technology lies in the Industrial Internet of Things, remote healthcare, 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 chip makers sell 5G network equipment on the market. They include Marvell, broadcom (AVGO), Intel (INTC), Texas Instruments (TXN) and analog devices. Meanwhile, xilinx (XLNX) manufactures programmable chips embedded in prototype network equipment.
5G networks require fiber optic technology
The global 5G radio access market will rise to $21 billion by 2024, up from less than $4 billion in 2019, research firm Omdia forecasts.
In addition, 5G is also a long-term opportunity for network equipment manufacturers Ericsson, Nokia, and Samsung.
cell phone tower operators american tower (AMT), Castle of the Crown and SBA Communications (SBAC) could also get a 5G boost, analysts say. Crown Castle will be a Dish Network 5G infrastructure partner.
5G networks will connect to fiber optic networks for “long distance” purposes. That will provide reliability for emerging automotive, robotics and medical applications. Possible 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. Small cell antennas, hung on utility poles or on the roofs of buildings, will require fiber optic connections to local hubs. However, local government approval is required to expand 5G networks.
Rysavy Research projects that there will be 1 million outdoor small cells in the US by 2028, 10 times more than current levels.
How 5G wireless technology will change cloud computing
Edge computing deploys data processing, storage, and networking close to sensors and where other data originates, near the “edge” of the network. The goal is to process and analyze data locally in real time instead of sending it to distant data centers in the Internet cloud.
“The arrival of 5G should mean the launch of many new technologies that we certainly haven’t imagined yet,” economist Ed Yardeni said in a recent report. “To make them possible, tech gurus say cloud computing will shift from a distant cloud server to computers at the edge of a neighborhood network. Edge computing should continue to increase the speed of transmission of data, but operators will have to open their wallets for this to happen.”
Microsoft is selling global network transport and routing services to 5G network operators. Microsoft calls the initiative “Azure for Carriers.” Microsoft bought AT&T’s cloud network business.
Wireless companies 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.
AWS’s “5G in a Box” service will initially use shared “CBRS” spectrum. Ultimately, 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 largest providers of data center processors for cloud applications.
Mini-data centers in neighborhoods will connect to cloud computing infrastructure. Nokia and Ericsson are developing 5G cloud gateways.
Dell Technologies (OF THE), Hewlett Packard Company (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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