3 Top Stocks at the Heart of the 5G Revolution


  • The 5G revolution has begun, with the following stocks being the brightest names in this transformative technology:
  • Qorvo (QRVO): The combination of 5G and microchip manufacturing forms a strong presence in the market.

  • Verizon Communications (VZ): A 6.35% dividend yield from a company with strong financials is promising for long-term investors.

  • T-Mobile US (TMUS): 322% YoY net income growth in Q3 2023 sets the stage for long-term returns.

5G technology stocks - 3 Top Stocks at the Heart of the 5G Revolution

Source: Fit Ztudio / Shutterstock.com

Along with the coronavirus pandemic, a wave of demand for fast and reliable communication has risen. Employers wanted to give workers access to resources and expect quick results. Content consumers did not want to miss a single second because of the quality of the connection. This demand for high-quality Internet services became the driving force behind the development of the 5G communications segment. 

The construction of fifth-generation mobile networks requires significant financial investments and promises equally high returns. Therefore, it is worth taking a closer look at 5G technology stocks that are ready to bring sustainable profits to their owners.

Qorvo (QRVO)

The logo for Qorvo (QRVO) is shown on a sign outside the company's headquarters.
Source: Michael Vi / Shutterstock.com

Qorvo (NASDAQ:QRVO) is involved in high-tech products ranging from IoT and defense to automobiles and smartphones. It specializes in microchips used in various devices. The company’s interests include the development of 5G technologies. It is predicted that about half of all Android smartphones will be able to use 5G by the end of 2024. That is why a significant growth of attention to Qorvo and QRVO shares is expected.

Fifty of the company’s facilities in North America, Asia Pacific, and Europe continue to provide consumers with modern products. As a result of the tremendous work, sales in Q2 FY 2024 approached $1.1 billion. Almost half of this amount was accounted for by Apple (NASDAQ:AAPL) and Samsung (OTCMKTS:SSNLF). And deliveries to these companies are only growing.

After October 2023, QRVO demonstrated its capacity to grow rapidly as one of the promising 5G technology stocks. An analysis of the company’s intrinsic value shows a value of roughly $162, indicating a great time to enter.  

In the next two years, the company plans to increase cash flow and grow its revenue by 49%. If the company’s expenses remain under control, investors may find themselves in a significant gain, taking advantage of the current undervaluation of the asset.

With a market capitalization of roughly $10 billion and exceeding analysts’ expectations for earnings per share, Qorvo is a highly promising investment target. The stock’s one-year low and high are $80.62 and $114.97, respectively. Analysts have been revising QRVO upward in the last three months. Given that Qorvo has exceeded earnings expectations for 20 consecutive quarters, investors can feel more confident about having shares of this company in their portfolio.

Verizon Communications (VZ)

Verizon store sign. VZ stock.
Source: Shutterstock

5G and broadband are key focus areas for Verizon Communications (NYSE:VZ). The company’s performance over the past few months shows how right it is. 400,000 new subscriptions in Q3 2023 and the success of myPlan helped to strengthen Verizon’s position.

It’s worth looking at the company’s Q4 2023 results. According to this data, total revenue reached $35.1 billion, which is similar to the last quarter of 2022. Operating income growth is observed in both the business and consumer segments. In both cases, the growth rate is close to 3%. Sales of wireless services proved to be a significant source of revenue for the company, growing to $19.4 billion.  

The growth of the customer base demonstrates the company’s advantages over other providers in the industry and is consistent with the marketing campaign. This is evidenced by the 16.9% increase in postpaid phone top-ups — the best result in the last four years. That is, Verizon is able not only to retain its current customers but also to lure customers from competitors. 

The company’s shares did not stay away from such improvements and gained in value. From October’s $30, VZ experienced a surge, rising above $42, making it an enticing option among 5G technology stocks. Verizon can attract investors not only because of the company’s performance but also because of its competitive dividend. The dividend yield is about 6.35%, which is above the market average and attracts income-oriented investors to VZ. 

T-Mobile US (TMUS)

tmobile (TMUS) logo on an office building facade
Source: Shutterstock

With 21.6 million prepaid users and 96.3 million customers, T-Mobile US (TMUS) is the largest wireless operator in the United States. Keeping pace with the times, the company focuses on 5G to maintain its market position. Its 5G network is the largest and fastest in the country. 

Comparing the 3rd quarter of 2023 and 2022, the company made a breakthrough in terms of net profit, marking an unprecedented 322% growth, positioning T-Mobile US as a standout among 5G technology stocks. In one quarter, T-Mobile managed to earn $2.1 billion, with the stocks’ performance being the best indicator of the company’s success. T-Mobile showed a profit of $1.82 per share, surprising even experts who predicted lower profitability.

In fiscal 2024 EBITDA is expected to grow 9%, which is a significant achievement in the field of 5G technology stocks. But analysts expect that the rate could be higher for several reasons. These include the expected buyout of a large volume of TMUS and the results of deals with Deutsche Telekom and SoftBank (OTCMKTS:SFTBY).

The 2020 acquisition of Sprint expanded the company’s 5G spectrum. This gave it an advantage over other market participants and increased the number of ways T-Mobile could make money, which couldn’t but influence customer growth. The company predicts that the number of 5G fixed broadband subscribers will increase to 7-8 million by 2025.

On the date of publication, Julia Magas did not hold (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.

Julia Magas is a writer who covers the latest trends in finance and technology. Her work is published in a number of financial media outlets such as Nasdaq, Cointelegraph, Investing, SeekingAlpha, FXEmpire, and Beincrypto. She primarily covers cryptocurrency and blockchain technology with a focus on market performance, innovations and trends.

Article printed from InvestorPlace Media, https://investorplace.com/2024/01/5g-technology-stocks-leading-technological-transformation/.

©2024 InvestorPlace Media, LLC