It’s time to take a look at stocks to buy that will benefit from the fact that fifth-generation (5G) wireless internet is here and it promises to change the world as we know it.
Not only is 5G internet up to 100 times faster than previous 4G download and upload speeds, but it promises to advance technologies ranging from artificial intelligence to three-dimensional graphics to the Internet of Things (IoT).
Basically, technology is expected to advance leaps and bounds through the use of 5G wireless internet. Owing to its huge advancements, the market for 5G is forecast to reach $65.49 billion by 2026, growing at a compound annual growth rate (CAGR) of 58.7%, according to Research and Markets.
With so much potential, it should come as no surprise that companies all over the world are seeking to capitalize on the switch to 5G networks, which rely on laser lights and spectrum to achieve their incredible results.
Here we look at three stocks to buy as laser beam breakthroughs and technological advancements put the spotlight on 5G wireless.
Stocks to Buy on 5G Breakthrough: Qualcomm (QCOM)
A 5G stock that hasn’t gotten much love this year is Qualcomm. Year-to-date, QCOM stock is down 11% at just above $132 per share.
Despite being at the forefront of 5G wireless technology through its patents, semiconductors, software and services, Qualcomm’s share price has been in the doldrums.
However, the stock recently got a reprieve and moved 3% higher after the company announced a new $10 billion stock buyback plan that goes into effect immediately. The repurchase adds to the company’s stock buyback program announced in 2018, which has $900 million of repurchase authority left on it.
Whether the share buyback leads to long-term, sustained gains for QCOM stock remains to be seen. However, analysts agree that the company is in a solid position to gain from not only its 5G technology but also its Internet of Things (IoT) division.
Qualcomm, which has been a going concern since 1985 and today has about 41,000 employees and a market capitalization of $150 billion, is a leader in wireless technologies that are used in mobile devices.
However, its share price has been depressed by the fact that Qualcomm’s overall share of the semiconductor industry has steadily eroded since 2014, a situation that has gotten worse since Apple (NASDAQ:AAPL) moved to make its own semiconductor chips.
T-Mobile too has had a rough ride in 2021. Down 11% on the year, including an 8% plunge in the past month, TMUS stock is worth a little more than $118 as of this writing.
The company’s shares were underperforming already when, in August, T-Mobile revealed that it was the victim of a cyberattack that resulted in the theft of customer data.
That disclosure sent the stock even lower and it has yet to recover. News of the cyberattack overshadowed the reporting of positive second-quarter results for T-Mobile.
The company announced that its revenue increased 13% year-over-year to $20 billion, slightly more than the $19.8 billion it earned in this year’s first quarter.
T-Mobile’s finances have been growing since the company completed its merger with Sprint on April 1, 2020. The Sprint merger boosted T-Mobile’s 5G network, giving the company loads of 5G spectrum.
Today, T-Mobile has the biggest 5G network in the U.S. The company spent an additional $9.3 billion on 5G spectrum at an auction held this spring to further enhance its wireless capabilities.
Its strong 5G capabilities enabled T-Mobile to grow its total customer base to 104.8 million in this year’s second quarter from 98.3 million a year earlier. T-Mobile also added marquee clients this year such as the U.S. Army.
Stocks to Buy on 5G Breakthrough: Micron Technology (MU)
Micron is a leading supplier of various memory and storage products that are used in everything from personal computers and smartphones to massive data centers.
The rapid growth of 5G is accelerating demand for data storage, particularly at data centers across the U.S.
Micron Technology has been capitalizing on the growing demand with its revenues up 29% for its fiscal 2021 year that ended on Sept. 30. The company’s outlook remains strong as the latest 5G smartphones contain a lot more memory capacity than previous 4G phones.
MU stock has chronically underperformed this year, down 25% in the past six months to $67.73. In the last month, the share price has come down 8%.
The company’s stock took a hit after it was revealed that the iPhone 13, which is 5G enabled, does not use chips from Micron but rather from competing companies.
Previously, Apple had used Micron memory storage technology in all of its iPhones. While the overall 5G smartphone market remains huge, the loss of a sizable customer such as Apple sent Micron Technology’s stock spiraling. The good news for investors is that Micron stock looks attractive at a forward price-to-earnings ratio of just 7.2.
Disclosure: On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.