The size of the 5G services market is expected to grow from $98.3 billion in 2023 to more than $427 billion by 2028. That equates to forecast compounding annual growth rates above 34% in that period. Those strong figures underpin the need to consider 5G stocks to watch.
Most investors associate 5G with mobile carrier networks. While that is where much of the opportunity lies, 5G also has applications in other markets. Agriculture, smart grids, and other systems will all benefit from the continued development of 5G.
The 5G opportunity reaches deep across the technology sector creating opportunities in hardware, software, chips, and more. It isn’t simply about mobile networks by any means. That means there are a lot of stock opportunities that touch on 5G that some might not expect. Those hidden opportunities and the massive growth anticipated in 5G create exciting opportunities. Let’s learn more about 5G stocks to watch that leverage those opportunities.
T-Mobile US (TMUS)
T-Mobile US (NASDAQ:TMUS) is one of the more prominent 5G stocks available to investors. It is a network service provider and, as such, is deeply exposed to the 5G opportunity. Readers will also note that it’s the only pure play 5G opportunity on this list.
The primary reasons I think investors should consider T-Mobile US are all financial. Some impressive fundamentals lead me to believe that T-Mobile US is headed in the right direction. Due to those improvements, it should be able to capitalize on the 5G opportunity. The company made some impressive improvements in 2023.
Drastic reductions in the cost of revenue and other reduced expenses led to much higher operating income. The result was net income increased by nearly $6 billion in 2023. Meanwhile, T-Mobile US reduced the number of shares outstanding, leading to a bigger pot of earnings and fewer shareholders to pay. That all suggests that the stock will reward shareholders. As the 5G opportunity grows, that pot could grow as well.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is primarily known as an AI chip stock. Most of the potential and excitement around the stock stems from its positioning as the second-best AI chip maker on the market. However, AMD is also a company to watch concerning 5G.
AMD continues to collaborate with other well-known chip makers, including Samsung. Those two firms are collaborating to advance 5G virtualized RAN. The virtualization of RAN is transforming traditional Radio Access Network hardware into software.
AMD is clearly, therefore, also a part of the development of low-latency, high-efficiency networks necessary for the continued development of 5G. Samsung is leveraging new AMD EPYC 8004 processors in the collaboration. Those sales are yet another reason to consider AMD at the moment. The company has a massive opportunity in data centers and all things AI. Yet, AMD is also at the forefront of technological development elsewhere.
AMD provides excellent exposure to multiple high-growth opportunities moving forward. 5G and AI are two of the more prominent opportunities in that regard.
Marvell Technology (MRVL)
Marvell Technology (NASDAQ:MRVL) primarily focuses on 5G semiconductor solutions. As this article notes, the company is not particularly well-known outside of industry circles, but is a prominent supplier of 5G equipment. Its strong association and relationships within the 5G industry have been a blessing and a curse at the same time.
Marvell Technology is the only supplier of physical layer-up chips to Nokia (NYSE:NOK). The company also made important connections with RAN leaders, including Samsung. As good as all of that sounds, the RAN market has suffered lately as the broader 5G opportunity continues to disappoint to a degree.
Analysts continue to be keen on Marvell Technology and its stock. The company is an auxiliary player in the AI market. Some of its digital signal processors connect GPUs that dominate the markets. Marvell Technology is more heavily associated with the 5G opportunity than the AI one.
If and when that opportunity reaches its potential, MRVL stock should grow rapidly.
Alphabet (GOOG,GOOGL)
Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) is such a large and expansive company that many of its opportunities often get lost. Yet, the stock is very much one to watch in relation to 5G.
One of the main reasons to watch Alphabet in relation to 5G is the delivery of wireless services to enterprise customers via the cloud. Cloud infrastructure is widely expected to play an integral role in the delivery of 5G wireless deployments. For that reason, the big three cloud operators are all expected to offer exposure to 5G opportunities.
The 5G opportunity is not the driving force behind GOOG stock and its success. Ad revenues from search are much more important to the company. Fortunately, the company has recovered there. Google’s Cloud segment also continues to grow, which is where much of that 5G opportunity lies. That means there are multiple reasons to consider investing in GOOG stock, 5G being one of them.
Rogers Communications (RCI)
Rogers Communications (NYSE:RCI) is a 5G stock to watch, but it generally doesn’t get a lot of attention. Rogers Communications continues to be downplayed because it’s a Canadian company. For better or worse, Canadian companies don’t garner much attention in the U.S. stock market.
The company is a broad communications firm offering wireless, cable, voice and more. I believe that Rogers Communications is worth paying attention to for the growth the company has experienced over the past few years. Between 2020 and 2023, overall revenues grew by nearly 40%.
Rogers Communications owns Canada’s only true national 5G radio access network. Its 5G Network covers 2,200 communities across the nation. Rogers secured nationwide 5G spectrum with its winning bid for 3.8 GHz spectrum in November 2023. Its shares are rated a “buy” and have the potential to double or more over the next 12 to 18 months.
Cisco Systems (CSCO)
Cisco Systems (NASDAQ:CSCO) is a strong enterprise 5G provider. The company offers private 5G across a diversity of industries. It made a strong name for itself as an ultra-reliable hardware provider. Cisco also offers private 5G networks at the enterprise level.
Outside of the 5G opportunity, there are multiple reasons to consider Cisco Systems. The company is well known to be one of the more reliable tech dividend stocks, yielding 3.3%. Dividend yields of 3% aren’t unusual, but that’s relatively high in the tech world.
My colleague Charles Munyi noted that Cisco Systems is transforming into a recurring software business. That transition offers more predictable, recurring revenues. It is also less exposed to the cyclical ebbs and flows more commonly in the hardware industry. Better margins are another added benefit of a greater overall software exposure. Furthermore, Cisco Systems is exposed to data center AI growth through its switching business.
Iridium Communications (IRDM)
Iridium Communications (NASDAQ:IRDM) stock represents a firm that is part telecom company and part space company. The company provides voice and data communication services to governments, non-governmental organizations and consumers.
It also provides hosted payload services on satellites, satellite handsets, and other products and services that give it a firm footing in the space sector.
Early this year, the company announced that it plans to make its low Earth orbit constellation compatible with 5G standards.
Iridium Communications stands out to me for its fundamentals. The company has experienced strong top line growth over the past five years. However, it’s the last three years that stand out to me. It is within that time frame that the company found overall profitability.
The company posted its first full year of net earnings in 2022, and those earnings nearly doubled in 2023. This suggests that Iridium Communications is a well-run company that is exposed to the emerging 5G opportunity.
On the date of publication, Alex Sirois 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
