Few people are more excited over 5G advances than online gamers. Investors should be, too, as 5G stocks provide an opportunity for shareholders to benefit in communication progress.
Gamers are part of a segment that helps push the progress envelope. Developers use new chapters in their game titles to make the most of available technology. They are not just being selfish. Players often expect a game’s new version to provide a better experience. And 5G will help meet those expectations, whether the game is enjoyed online with other players or streamed for an individual session.
5G is short for the fifth generation of mobile communications networks. 5G is expected to offer higher speeds, greater reliability and better overall service.
The 5G conversion is taking place globally and is expected to take several years to complete, presenting an opening for investors. Here are 5G stocks to buy that are supporting the future of gaming:
- Advanced Micro Devices (NASDAQ:AMD)
- Nvidia (NASDAQ:NVDA)
- Apple (NASDAQ:AAPL)
- AT&T (NYSE:T)
- Nokia (NYSE:NOK)
- Defiance 5G Next Gen Connectivity ETF (NYSEARCA:FIVG)
- First Trust IndXX NextG ETF (NASDAQ:NXTG)
5G Stocks: Advanced Micro Devices (AMD)
Advanced Micro Devices is a hard-charging innovator in the rough-and-tumble world of computer chips. The company’s chips are known for computing power and reliability. And AMD’s push to advance processor technology enables it to poach business from competitors and become the go-to of several computer makers.
The company’s chips are a favorite of the gaming community. In addition, participants in the cryptocurrency mining effort have been buying AMD’s graphics processing units.
In the last week or so, shares of AMD stock rose about 10%. The company posted strong growth during 2020 (a year not known for being friendly to a lot of companies) and shares are trading around all-time highs. Meanwhile, Advanced Micro Devices is expected to add to its growth trend during 2021. Despite its lofty valuations, AMD is first on the list of 5G stocks to invest in the future of gaming.
Nvidia is another major manufacturer of computer chips, and its products are loved by gaming and professional users.
Demand for the company’s products is high — so high, in fact, that shortages are not unknown. Currently, demand has outpaced the supply of Nvidia’s GPUs.
“It’s going to take several months to catch up some of the demand,” Ian Buck, a VP at Nvidia, said recently.
Gaming is important to Nvidia. Video gaming provided nearly half (48%) of the company’s revenue in the last quarter, and the chip maker said its gaming sales rose about 37%. At the same time, data centers accounted for 40% of its revenue and this segment is expected to keep growing.
Like AMD, NVDA stock is a valid choice among 5G stocks to own.
Apple is on the 5G stocks list because the newest version of its leading source of revenue, the iconic iPhone, heartily embraces 5G.
And frankly, AAPL stock is a name that deserves to be in almost every portfolio.
Apple is very well run even if the company is not the engine of creativity it was during the Steve Jobs years. The company keeps improving its phones and tech products, which have a loyal following. Its wearables division is a serious revenue producer. Also, Apple is putting TLC into its services division, which includes its store, music and video steaming operations.
Writing for InvestorPlace, David Moadel says investors should be ready for Apple’s devices to be high on shopping lists this holiday season:
“Getting ready doesn’t necessarily mean you have to buy those products. As a forward-thinking investor, it just means that you could position yourself now to capitalize on the next leg up in AAPL stock.”
AT&T is not a chip company or maker of devices loved by customers. However, T stock is included among 5G names to buy to diversify this list as a key provider of access to mobile networks.
AT&T’s customers who are avid gamers can reach networks through its cable services as well as mobile phones. The company is a serious revenue producer. And, the shares are often recommended for income investors, as it sports a beefy 6.61% dividend yield at current levels.
Dedicated streamers may assume the company’s HBO Max venture is considered an advantage. Actually, that almost kept it from this 5G stock list. The service’s pricing structure is a concern and it’s hard to see it as a serious threat to Netflix (NASDAQ:NFLX). Also, AT&T’s cannibalization of its studio’s premium movie content is just foolish.
A major global provider of 5G equipment and services, Nokia is not a high-flying stock to own. However, it is very affordable and resilient.
To be blunt, NOK stock has been in a serious slump. But, there are indications that the Finland-based tech shares are poised to turn that around. A major factor is Nokia is well known and trusted by communications companies, and this relationship is valuable as the 5G rollout gains momentum. Nokia is viewed as a more comfortable alternative to China’s 5G offerings.
Meanwhile, Nokia has a newly installed CEO whose top mission is to guide the company out of the slump and increase its share of 5G equipment sales around the world.
NOK stock’s room to grow makes it a 5G stock to buy.
Defiance 5G Next Gen Connectivity ETF (FIVG)
Exchange-traded funds (ETF) give investors a basket of stocks focused on specific themes and a broad opportunity along with more access and lower fees than mutual funds. The Defiance 5G ETF targets several aspects of the 5G conversion.
These include research and development, materials and systems. The ETF is linked to the BlueStar Global 5G Communications index, which tracks 79 companies.
This ETF was launched in March 2019 and has net assets of about $780 million.
First Trust IndXX NextG ETF (NXTG)
The First Trust IndXX NextG ETF is another easy way for investors to play the emerging 5G conversion. NXTG stock is described as “a tiered-weighted index of global equities related to next generation digital cellular technologies.”
It focuses on two key aspects, according to etf.com. The first is hardware and infrastructure, which includes equipment manufacturers as well as real estate investment trusts that own cell towers The second is providers of telecommunications services with access to 5G.
NXTG has been around since February 2011 and its assets total about $784 million
The ETF’s top holdings include Taiwan Semiconductor (NYSE:TSM), which makes up 2.23% of the fund. Others in the fund’s top 10 are two names that you saw earlier: Qualcomm at 2.17% and Advanced Micro Devices at 2.07%.
On the date of publication, Larry Sullivan held a long position in AAPL.
Larry Sullivan is a veteran journalist in Florida who has covered banking and finance for several years. He is a former investing editor at U.S. News & World Report in Washington D.C.