The implementation of 5G networks offers an array of opportunities for the key players in the space, especially because of demand in technical upgrade necessary for 5G. Of course, technology companies are the biggest beneficiaries of the growth in 5G infrastructure.
Therefore, it is crucial for investors to pay attention to specific segments in the technology sector that are well positioned to gain more by virtue of 5G products and services that they offer.
Future of 5G Infrastructure Market Looks Bright
The 5G infrastructure market is approximately valued at $784 million in 2019 and is expected to expand at a CAGR of 67.1% to reach $47,775 million by 2027, per Research and Markets. After all, 5G comes with lower lag time, which is a major reason for the initiatives to adopt it globally.
In addition, rise in mobile data traffic and increasing adoption of virtual networking architecture in telecommunications are also major factors boosting the 5G infrastructure market right now.
How 5G is Fuelling the Smart Cities’ Revolution
In fact, the widespread adoption of 5G is changing the way cities and towns operate technologically, thus giving rise to the concept of “smart cities.” These cities are able to update themselves in real-time.
This means that traffic lights could regulate themselves on the basis of the number of cars and streetlights could light up or turn off by sensing if there are people on the sidewalk and a surgeon may be able to operate on a patient miles away via a wireless network and a robot. What’s more, the trails for adoption of 5G for smart cities have already begun.
Successful implementation of 5G networks would not only boost download speeds but also put to action complex activities involved in the functioning of smart cities. It would make it easier for real-time data-reliant companies such as Uber Technologies, Inc. UBER, Spotify Technology S.A. SPOT, streaming service providers such as Netflix, Inc. NFLX and The Walt Disney Company DIS to operate more efficiently.
4 Stocks to Make the Most of 5G Technology
Investors can thus consider companies that are working on different segments of the 5G technology involved in the making of smart cities. Wireless service providers, semiconductor companies, makers of network gears and smart phone manufacturers are the key players in this league.
We have, therefore, chosen such stocks that are poised to benefit from the increasing adoption of 5G technology. The stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Intel Corporation INTC and Skyworks Solutions, Inc. SWKS announced in February this year that together they are developing 5G communications engines, which can be used in a wide range of end markets. The new Skyworks-Intel platforms are expected to offer highly integrated and optimized wireless system solutions.
Intel sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has risen 5.5% over the past 60 days. The company’s stock price has already outperformed the Zacks Semiconductor – General market in the past one year (+20.0% vs +14.5%). You can see the complete list of today’s Zacks #1 Rank stocks here.
Skyworks Solutions carries a Zacks Rank #2. The company’s stock price has already outperformed the Zacks Semiconductors – Radio Frequency market in the past one year (+6.8% vs +3.6%).
Verizon Communications Inc. VZ is testing its new 5G network in as many as 13 NFL stadiums. The company is also testing its 5G network in Chicago after it launched the network in the city in April this year. In fact, Verizon is testing the network in one of industrial manufacturer Corning’s largest manufacturing facilities as well, to prove how 5G can make manufacturing processes safer, more efficient and successful.
The company carries a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 0.4% over the past 60 days. The company’s stock price has already outperformed the Zacks Wireless National market in the past two years (+27.4% vs +18.8%).
Ciena Corporation CIEN is a provider of hardware networking solutions. The company is a major supplier of fiber optics, which is crucial in the deployment of 5G networks by telecom giants.
The company carries a Zacks Rank #2. The company’s stock price has already outperformed the Zacks Fiber Optics market in the past one year (+16.0% vs +15.0%).
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