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The global market for 5G technology is poised for substantial growth, with projected revenues rising from $30.62 billion in 2022 to $44.71 billion in 2023. Notably, Gartner forecasts a 22% increase in 5G infrastructure spending this year, surpassing $23 billion worldwide. This optimistic outlook positions semiconductor companies, mobile tech equipment manufacturers, and real estate asset holders as prime stocks to capitalize on the widespread adoption of 5G. Here are seven carefully selected stocks to harness the power of 5G investing.
7 Stocks That Could Silent Goldmines of the Decade You Might Be Ignoring
- Skyworks Solutions
- Marvell Tech
- T Mobile
- American Tower
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Skyworks plays a crucial role in driving the progress of 5G technology with its extensive range of semiconductor solutions. Their diverse product portfolio, encompassing front-end modules, amplifiers, filters, and integrated circuits, offers vital support to 5G infrastructure and devices. It is worth noting that Skyworks gained recognition as a favored 5G stock among billionaires in the first quarter of 2023. In fiscal Q2 2023, Skyworks Solutions delivered impressive financial performance, achieving $1.153 billion in revenue and an operating income of $273.3 million under GAAP standards. This noteworthy profitability and strong cash flow generation further solidify the company’s position. Skyworks has consistently demonstrated market leadership through strategic partnerships with prominent industry players like Samsung and Cisco. These collaborations drive the development of innovative capabilities and solutions for smartphones and enterprise networking. As a result, Skyworks establishes itself as a significant player in the 5G landscape, reinforcing its influence and impact.
Despite not being directly engaged in manufacturing 5G networking equipment, AMD plays a vital role in bolstering the overall 5G ecosystem through its technology. Nvidia foresees significant expansion in data center operations for the fiscal second quarter, evident in their revenue projection of $11 billion, reflecting a remarkable 64% surge compared to the previous year. This outstanding performance corresponds to the robust demand for Nvidia’s data center GPUs, which reportedly experience delays due to high demand. Meanwhile, AMD has recently introduced the MI300X GPU, specifically tailored to accelerate generative AI applications, thus broadening its portfolio within AI. AMD said this chip can provide “the compute and memory efficiency needed for large language model training and inference for generative AI workloads.” AMD has also combined eight MI300X accelerators on its Instinct Platform and claims it is “the ultimate solution for AI inference and training.”
Marvell has solidified its position as a leading provider of semiconductor solutions for data infrastructure, which is critical in facilitating high-speed 5G connectivity across various spectrums. This pivotal involvement in 5G wireless infrastructure makes Marvell stock an attractive investment option. Beyond its contributions to 5G, Marvell showcases its innovative capabilities in AI, drones, and cloud computing. The company’s recent financial performance surpassed expectations, particularly in the AI sector. Notably, Marvell’s potential in cloud-optimized ASICs has expanded, with a significant rise in AI-related opportunities. With robust fundamentals and impressive growth rates, such as 20% in revenue and approximately 36% in EBITDA over the past five years, Marvell presents an enticing long-term prospect within these interconnected, high-growth fields. A number of analysts have reiterated their strong outlook for the stock as well.
T-Mobile is one of the strongest frontrunners in the 5G race. Its impressive 5G coverage spans 5,000 cities, encompassing 200 million individuals with its high-speed services. Even during a bear market in 2022, T-Mobile’s stock outperformed the S&P 500, experiencing a notable 21% gain compared to the S&P 500’s decline of over 19%. In the first quarter of 2023, T-Mobile added 538,000 postpaid phone subscribers to its network. The company’s effective utilization of low-band spectrum enables it to provide reliable coverage. Its commitment to connectivity extends to rural areas, ensuring that nearly 96% of rural Americans have access to its digital services. T-Mobile foresees a significant enhancement in its robust 5G network by 2024, aiming for a tenfold improvement. This acceleration is fueled by its strategic merger with Sprint, further propelling its growth trajectory. The company plans to invest an estimated $9.4 billion to $9.7 billion in 2023, potentially bolstering its 5G infrastructure further.
Corning occupies a unique and influential position in the 5G domain, excelling in producing fiber optic cables, vital components for meeting the speed and capacity demands of 5G networks. Their groundbreaking achievement came in the form of the TXF fiber, introduced last year, capable of transmitting data at an impressive rate of 800 gigabits per second over 800km. This remarkable innovation can potentially revolutionize multiple industries, particularly in the realm of long-haul transmissions. Despite prevailing macroeconomic challenges, Corning’s overall outlook remains promising as these headwinds gradually subside. Furthermore, the company’s solid dividend profile, marked by 12 consecutive years of growth and a dividend yield exceeding 3%, enhances its appeal to investors focusing on the burgeoning 5G landscape. Analysts have upgraded their assessment of Corning, expressing heightened confidence in its margin expansion targets, thanks to recent price increases in the Display segment amid a tighter supply-demand environment.
With 225,000 cell towers, American Tower is positioned to leverage the immense demand for 5G infrastructure. The company is driven by carrier network investments and remarkable organic growth, particularly in the North American region. This favorable momentum enables American Tower to capitalize on the transformative 5G revolution. Moreover, the company’s strong financial standing, characterized by consistent revenue growth and dividends, enhances its investment appeal. Despite a decline of approximately 11.5% in its stock in 2023, American Tower’s dividend yield has risen to an attractive 3.26%. Since its conversion to a REIT in 2012, the company has demonstrated an impressive track record of dividend payments. It has consistently increased its payout yearly, achieving a compound annual growth rate of over 20%. American Tower generates substantial cash flow, sufficient to cover its dividend payments. It anticipates disbursing $3 billion in dividends this year, resulting in a dividend payout ratio of around 67% of its adjusted funds from operations (FFO). This allows the REIT to retain ample cash to fund its growth capital spending plan of $1.5 billion.
Amazon has made substantial investments in 5G technology, focusing on its cloud computing enterprise. In February, it brought on board phone companies, including T-Mobile and parent Deutsche Telekom AG to offer private wireless services to businesses. In 2020, Amazon introduced AWS Wavelength, an innovative service enabling developers to build applications that leverage the power of 5G networks. By facilitating low-latency connectivity between AWS compute and storage services, and 5G devices, AWS Wavelength paves the way for enhanced performance and efficiency. Amazon has also launched Project Kuiper, an ambitious initiative to bridge the digital divide. Under this, the company will deploy multiple satellites to provide high-speed, low-latency broadband services, particularly in rural areas. Amazon has established itself as a significant contender in the 5G market by offering backhaul solutions to wireless carriers, enabling them to deliver both LTE and 5G services. This dual strategy highlights Amazon’s strong dedication to seizing the advantages of 5G technology.
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