The race to 5G wireless is on – and if your mobile carrier isn’t already pestering you to upgrade to a 5G phone, they will be soon. All of this is made possible by the hardware inside. In my experience, great hardware is one of the best ways to profit from any tech boom – and that includes 5G. In that vein, chipmaker Qualcomm (NASDAQ:QCOM) just announced its latest contribution to the 5G revolution. And Apple (NASDAQ:AAPL) is sure to take notice.
While the iPhone 11 launch in September was all about “slofies” (and a third camera), Apple is said to be working on a more innovative iPhone 12 for its 5G debut this fall.
The hot new product Qualcomm announced today, the Snapdragon X60, is a 5G modem. Now, when most people think of modems, they think of something like this – the equipment that gets you online at home or work:
Source: Wikimedia Commons
But the modems we’re talking about here are actually tiny chips that go inside smartphones (and other mobile devices):
Above you see an example from Intel (NASDAQ:INTC), which in August sold a modem division to Apple for a cool $1 billion. Like its Chinese competitor, Huawei Technologies, Apple was more inclined to develop its OWN chips.
Custom hardware is a hallmark of Apple products. But, in the meantime, Qualcomm is still its chip supplier for the next few years – and the new X60 chips prove that it can make them as small and as efficient as Apple (and other smartphone makers) could hope for.
Qualcomm has not announced the exact dimensions of this year’s Snapdragon X60 chips. But we do know that it’s made of transistors that are just 5 nanometers (that’s 5 billionths of a meter!) in size.
And Qualcomm’s making another key upgrade from the current X55 chips: This will be the first “to support spectrum aggregation across all key 5G bands and combinations.” 5G will use new millimeter-wave technology, and basically Qualcomm will deliver chips that let you access 5G speeds in any of the different networks.
With 5G chips that are more versatile, efficient and smaller than its rivals, Qualcomm is clearly a step ahead in terms of the technology. How about as an investment?
To help you see why, here is how QCOM stock is looking right now in my Portfolio Grader:
QCOM stock earns top marks of “A” for its Quantitative Grade, which indicates popularity on Wall Street. That is certainly a strong point in its favor. But overall, Qualcomm’s sales and profitability scores make for a mediocre Fundamental Grade of “C.”
Add it all up, and QCOM stock does manage to ring in as a B-rated “Buy.” But I’ve got a better way to invest in 5G now.
Grab the Biggest Slice of the 5G Profits
As amazing as 5G promises to be, it doesn’t get us anywhere without the right infrastructure in place. You can never stream Netflix (NASDAQ:NFLX) using your smartphone plan (at any speed!) unless there’s a cell tower nearby.
With 5G, those cell towers will be able to provide cable modem speeds (approximately 100mps) to wireless devices. Within two years, most cell phones will be 5G enabled and be able to wirelessly handle television streaming. In fact, with the 5G infrastructure market set to grow at an annual rate of 67% over the next 10 years, the entire market will go from $780 million to nearly $48 billion. This buildout is where I see opportunity now.
Cable companies can do their best to fight back with fiber optics…but their services aren’t even available in many rural areas. And anyway, they can’t compete with the convenience of a smartphone, once it’s got ultrafast 5G. That’s how my 5G infrastructure play will capture more market share from the broadband cable companies.
The stock I’m targeting is enjoying an influx of big money on Wall Street, and it has strong fundamentals, too – making it an A-rated “Strong Buy” in my Portfolio Grader system.
When you do, you’ll see how to claim a free copy of my new investment report, The Netflix of 5G, which has full details on this company – and what makes it such a great buy now.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In one recent feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.