The battle for 5G supremacy has begun and the attention toward this battleground has thrust numerous “5G stocks” into the spotlight. But not all of them are created equally.
Mobile service providers are already staking their claims as the first company to roll out 5G in the coming months. At the same time, most are hedging their bets that a major introduction will not arrive until mid-2019.
Only one company can be first. But in the coming years there will be a slew of big winners as 5G becomes mainstream. Telecom companies are poised to the profit the most, so today I’d like to highlight my two favorites of the 5G stocks group.
The first is Qualcomm (NASDAQ:QCOM). This company isn’t exactly a true telecom play, but its exposure to the industry via its chips puts it in a better position than many other businesses in the industry.
QCOM introduced 5G phones powered by its mobile chips at this week’s Snapdragon Tech Summit. Its partners, AT&T (NYSE:T) and Verizon (NYSE:VZ), set up live networks to show off the impressive capabilities of the new technology.
QCOM stock hasn’t been the best performer this year. It desperately needs a fresh catalyst to push it to new highs. However, the long-term story for Qualcomm is compelling. I believe QCOM stock will be one of the biggest winners on the semiconductor side of the 5G revolution. With the stock currently trading below $60, I view it as a great buying opportunity.
Wireless Providers Lead the Pack of 5G Stocks
Most of the wireless providers have outperformed the stock market over the last few months as we inch closer to the launch of 5G. Samsung, Sprint (NYSE:S) and AT&T have all said they plan to launch their first 5G smartphones in the first half of 2019. Verizon has stated the same thing. It is already in the midst of a limited 5G launch for the home, which should expand greatly next year.
But T-Mobile (NASDAQ:TMUS) stock stands out from the rest of the pack. The company is also targeting 2019 for its 5G rollout, and it expects to have a nationwide 5G network up and running in 2020. I’ll admit that is quite an aggressive goal, but if there is one company that can pull that off it is T-Mobile and its brash CEO, John Legere.
One thing that is greatly helping TMUS stock is its planned merger with Sprint. This will form a mobile telecom company that can finally take on the two giants in AT&T and Verizon. There are still some regulatory hurdles, but I anticipate the merger being completed in the first half of 2019.
Like the rest of the wireless providers, TMUS stock has traded well recently. Anticipation of the merger and 5G rollout have the stock sitting near all-time highs. While the future for all telecom providers – and 5G stocks in general – looks bright, the up-and-coming T-Mobile stands out head and shoulders above the rest.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt just launched two new investment advisories focused around the “next” generation investing theme. His trademark three-prong investing approach targets the mega-trends old Wall Street is missing out on. Click here for more information on the “NexGen” Experience.