5G stands for fifth generation mobile network and is a new global standard. It enables a network to connect many things, including machines, objects, and devices. 5G wireless technology is designed to be much faster, more reliable, and more efficient than its predecessor, 4G.
5G is being rolled out worldwide, and the technology is booming. US News and World Report compare the 5G rush to the California and Klondike gold rushes of the 1800s and early 1900s. Statista and Ericsson say that global 5G subscriptions will likely double in 2022, and infrastructure spending will need to increase 22 percent to meet the need. If this is the case, it would be prudent to focus on investing in 5G stocks.
Three industries are part of the 5G revolution.
- The first industry is semiconductor manufacturers, which make chips.
- The second is infrastructure and equipment, which provide hardware.
- The third is real estate, such as towers.
Suppose you want to include some stocks from each industry in your 5G portfolio. You’ll want to look at each company’s potential for revenue growth with 5G technology.
Because any technology has the risk of being superseded by another technology, you’ll want to be sure the companies you choose are stable and agile enough to switch to 6G or other technologies if necessary.
Best 5G Stocks to Invest in Today
1. Verizon Communications (NYSE: VZ)
Verizon Communications is a large multifaceted telecom company with over 100,000 employees. The Bell Atlantic and GTE Corp. merger created the company in 2000. Because of its longevity and diversity of telecommunication offerings, it is stable and could pivot to other technologies if necessary.
Verizon Communications also has the largest number of subscribers of any US wireless company. It is partnering with many companies that could use its 5G technology in different ways, such as virtual reality.
On the other hand, Verizon faces significant competition from other companies, such as AT&T. Because many people still lack a smartphone, its market saturation could be surpassed by one of its competitors. It is also a legacy company, which means it has a lot of obligations for pensions that could hurt its bottom line.
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2. T-Mobile (Nasdaq: TMUS)
T-Mobile is one of the largest wireless network providers, especially since it acquired Sprint in 2020. It has 75,000 employees. It has been particularly successful in gaining wireless customers, which may mean that its revenue will continue to grow as more people acquire smartphones.
T-Mobile has also been around a long time, since 1999, so it is a stable company with longevity. T-Mobile used to be the provider of choice for prepaid/pay-as-you-go phones.
However, the number of post-pay smartphone customers is growing. The company has also increased its guidance for several metrics, and its stock price has tripled over the past few years.
On the other hand, T-Mobile has a lot of debt, even for a telecom company. Its indebtedness seems to grow rather than decrease, which is troubling when evaluating investment options.
There are rumors that it will merge with Sprint. This would certainly help T-Mobile acquire more subscribers. However, Sprint also has a lot of debt.
3. AT&T (NYSE: T)
AT&T is also a telecom giant. It is a holding company that provides a wide array of services through its subsidiaries, including wire and data services and equipment. It has more than 172,000 employees.
It has existed since Alexander Graham Bell founded it in 1885, so it has longevity in its favor. It is also so well-diversified that it will still be solvent and able to invest in other technologies should 5G go bust.
AT&T is still expanding its number of 5G customers and reached an initial target of 70 million people more quickly than anticipated. The company is also increasing its equipment sales.
While the stock has traditionally provided high yields, its debt has led to lower dividends as of late. The company is trying cost-cutting measures, which may reduce expenses and affect development and customer acquisition.
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4. Broadcom (Nasdaq: AVGO)
Broadcom is a prominent developer of smartphone chips widely used across the mobile network ecosystem. It also designs circuitry, base stations, and parts that connect smartphones to a wireless signal.
Broadcom continues to make acquisitions in an effort to diversify its operations, mainly to add infrastructure management software and cloud computing services. Broadcom typically packages software with hardware, and its acquisitions have boosted its profit margins.
Broadcom is also seeking to make additional acquisitions to add networking hardware to its product list. It is a top stock because of its continuing involvement in many aspects of the 5G boom.
Broadcom is a global company with 20,000 employees. It has existed since the 1960s and has a long history of innovation. The company has stability.
On the downside, the company’s stock is not without risk. In fact, it has been volatile at times.
Also, acquisitions are not without risk. There are different cultures among companies, which can often prevent a company from realizing all the benefits they expect from an acquisition.
5. Nvidia Corp (Nasdaq: NVDA)
Nvidia is a pioneer in manufacturing the three-dimensional graphics processing unit (GPU) used in most high-end video games. Its expansion into 5G has been through its AI-on-5G platform, which simplifies the deployment of AI applications over 5G networks.
Many telecom companies use its GPU. As 5G use increases, the need for GPUs to operate cloud-based video games streamed over networks will also increase and could become quite a large market. The company has about 22,000 employees.
Nvidia began in 1993, and its founders are Jensen Huang, Chris Malachowsky, and Curtis Priem. At the time of its founding, more than two dozen chip makers existed, and a few years later, 70 existed.
By 2006, Nvidia was the only one still around. This staying power indicates stability and resilience to me. The company also has consistently grown over the years.
One possible risk of investing in Nvidia is its high stock price. US News and World Report also believe the company is overvalued.
Its market cap is a whopping $422 billion. We may see a decline in stock price, at least in the short term.
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6. American Tower Corp. (NYSE: AMT)
American Tower Corp. is a Fortune 500 company and one of the country’s largest real estate asset holders. It is a real estate investment trust (REIT) that owns a portfolio of more than 220,000 towers.
Although the name has America in it, the company owns towers in several countries. Towers are critical assets for 5G expansion. The company also has many towers in rural areas, which is a potential growth location for smartphone use. It is well positioned.
Ownership of towers in many different locations seems to insulate it a little from risk. If smartphone and 5G expansion fail to grow in one country, they may still succeed in others.
American Tower also establishes fiber-optic networks that connect 5G small cell sites to the rest of the Internet. This connection is essential for mobile network operators as more people begin to rely on their mobiles for Internet access.
The company was incorporated in 2011, so it has some longevity. Fund managers and hedge fund managers tend to favor this stock. Sustainability is one of the pillars the company was built on.
The downside is that the stock price is high and requires a more significant minimum investment than many other stocks on the list. Its stock price also tends to be a little volatile.
7. Qualcomm (Nasdaq: QCOM)
Qualcomm is a leading chipmaker, and many of its chips enable 5G. Just about every phone contains some Qualcomm equipment. However, Qualcomm is not just putting 5G-enabled chips in phones.
They are also embracing opportunities in the Internet of Things devices, cars, and industrial equipment, which all comprise the 5G network. Qualcomm also serves customers worldwide.
The company was founded in 1985 and rolled out its first major commercial product in 1995. It has 45,000 employees. I believe its longevity speaks to its stability and resilience.
Its income is growing, and its stock has consistently paid a dividend. It is diversified into other technologies, such as Bluetooth and artificial intelligence, so it is insulated from the risks of one technology becoming obsolete.
Qualcomm has been ramping up its research, development, and appetite for acquisitions. One acquisition was NXP Semiconductors. The R&D and acquisition investments should help the company grow.
The significant risk in investing in Qualcomm is its recent legal troubles. Qualcomm bases its business model on receiving royalties from smartphone sales worldwide.
It sometimes collects royalties even if none of the company’s technology is used. This model has faced legal challenges in China, South Korea, and the United States. If Qualcomm were to sustain a sizeable legal loss, it could jeopardize its profitability.
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8. Corning (NYSE: GLW)
Corning is probably best known as a global glass manufacturer. However, it is a major supplier of fiber-optic cable. Before 5G can become a high-speed WIFI signal, it must first travel along the wired portion of the Internet.
It does so on high-speed fiber-optic cable. Many telecoms that provide 5G service will need to add more fiber optic cable to their network infrastructure. The company recently announced opening a new fiber optic manufacturing plant in Poland.
Corning also builds other equipment. Small cell antennas and their software are core components of many 5G systems. Corning is a legacy company, having existed since 1966. However, its stock has generally performed well and provides good dividends.
The company attributes much of its success to sustained investment in research and development. It has more than 60,000 employees in 150 locations across 30 countries.
Because of its emphasis on R&D and its continued investment in fiber optics and other 5G components, it is a good possibility that market share in this industry will grow. The company is well diversified in different businesses, so it is somewhat insulated from the risk of 5G becoming obsolete.
It has also demonstrated its ability to pivot to new technologies as they are needed. It certainly has longevity. On the other hand, Corning’s ability to maintain a profit margin in some of its manufacturing lines may be in jeopardy. For example, it faces competition from India and China.
9. Arista Networks (NYSR: ANET)
Arista Networks is a data center and Internet infrastructure company. 5G carries large amounts of data.
This means data centers will become increasingly important in mobile network management. Arista Networks provides data center equipment with open-source hardware and tools for network management and cybersecurity.
Arista Networks is a global company with about 3,000 employees. As 5G increases the capabilities of mobile devices, the company and its investors should benefit.
Andy Bechtolsheim, Ken Duda, and David Cheriton founded Arista Networks in 2008 to be a leader in “data-driven, client-to-cloud networking” for large data center environments. It launched its first switch product in 2010.
The company went public in 2014 and now has more than 7,000 customers, including many Fortune 500 companies. While it hasn’t been in business as long as some of the other companies on this list, it has experienced management and is known for its superior proprietary technology.
Traditionally, the company has provided a very high return on investment and is light on assets. Yet, it still shows a lot of cash on its balance sheet.
The company also is said to have a culture of innovation. The company is investing for long-term growth and is one of Motley Fool’s favorite stocks. Other analysts recommend the stock as well.
One potential risk is that companies such as Arista have made heavy capital investments in economic situations where interest rate rises may hurt.
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10. Marvell Technology Group (Nasdaq: MRVL)
Marvell Technology Group designs data processing and networking chips that move large amounts of information. Marvell has recently broadened its exposure to 5G and the cloud through its acquisitions of Inphi and Innovium in 2021. These acquisitions further positioned Marvell for growth as 5G technology advances.
Marvell has existed since 1995 and was incorporated in 2020. It has about 7,000 employees. Its sales of mobile and WIFI chips have been increasing.
Motley Fool indicates that shares are trading less expensively than expected, at only nine times earnings. The company also pays attractive dividends.
Marvell is a major player in the hard disk drive market. A potential negative is slowing demand for PCs could hurt the company’s profits.
How To Invest in These Best 5G Stocks
Now that you have a list of stocks, you need to decide on the best way to invest. Of course, you could always use retail investor accounts. But if you want to be technology forward and invest from a mobile app, you can choose from several platforms.
M1 Finance LLC is a brokerage company that created a super app that keeps investing, saving, and borrowing in one place. It’s an excellent tool for self-directed investing. You can choose between opening an account for general investing or one for retirement.
To invest, you sign into the app and set up a portfolio, deciding how much of it you want to allocate to each of the ten stocks listed above. The allocation process is essentially based on the slices of a pie.
The pie contains 100 slices, and you decide how many of them to devote to each stock. Once you fund the “pie,” the platform automatically allocates the money according to your preferences.
The app is free and charges no commissions. You can also borrow against your portfolio if you need to do so.
If you decide you’re unsure about this information on the best 5G stocks, you can sign up for one of the already curated portfolios.
The downside of M1 Finance is that it is aimed at long-term investments. It won’t work well if you decide to invest in a particular stock for one day and then sell it the next. It also won’t let you tax harvest, which is automatically selling off securities at a loss to avoid capital gains taxes.
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Betterment is one of the largest Robo-investing platforms. Using Betterment will provide algorithms to build an investment portfolio for you, and you won’t have to worry about whether you’ve chosen the best 10 5G stocks.
Betterment invests in ETFs, so your portfolio is appropriately diversified. It automatically recommends the best one for you based on the information provided around goals and preferences. It continually rebalances your portfolio to keep the right mix.
If you’ve done a lot of research and you’re a reasonably experienced investor, you may opt to adjust the asset class weights in the automated portfolio to better suit what you’ve learned through your research. Betterment calls this the “Flexible Portfolio” option. Betterment will also provide feedback about your portfolio.
Betterment has low fees and allows for investing in fractional shares, so you can use all the cash you have available for investing. You can choose a general or retirement portfolio option.
Betterment also invests based on ESG criteria, so you know you’re positively impacting society. Betterment also allows for tax harvesting and other tax strategies.
It also offers checking accounts and trust accounts. The downside is that it does not allow for direct indexing.
Robin Hood allows you to invest commission-free in stocks, options, or ETFs. One feature of Robin Hood is its cash card. You can have your paycheck deposited directly to the cash card, then use it as a debit card for all your purchases.
The card rounds your purchases up to the nearest dollar and invests that extra money. This rounding up is an easy way to grow your investments.
The debit card also allows you to send checks to pay bills. You can make instant transfers from a traditional bank account into your Robin Hood account for up to $1,000 and use the money to make trades.
With Robin Hood, you can choose your own stocks and can invest in fractions of shares. You can invest as little as $1 in a company.
You can also choose ETFs, such as growth ETFs, real estate ETFs, and telecom ETFs. You can also borrow from your holdings. The mobile interface is easy to use, and you’ll receive your first share of stock for free.
Robin Hood is great if you have the confidence that you’ve thoroughly researched and picked the best 5G stocks. The downside is that the free app has very little research information, so you’ll have to depend on other sources.
You can pay $5 a month for a premium plan that provides research access. You can also pay extra for a premium plan that allows you to transfer more than $1,000 instantly from your bank account.
Robin Hood has no mutual funds available, only individual stocks. Another downside is that it only offers an individual taxable account rather than also offering the retirement accounts that Betterment and M1 Finance offer.
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M1 Vs Betterment Vs Robin Hood. Which is Better?
All of the investment platforms are good, depending on your needs. M1 offers a more comprehensive personal finance solution than any of the others. It has taxable and retirement accounts, checking accounts, credit cards, and margin loans.
It offers completely self-directed investing, a curated portfolio, or a hybrid option. You can invest in individual stocks or ETFs. It lacks some sophisticated tax solutions. M1 Finance is a good choice if you want a complete solution, but the tax solutions are less critical.
Betterment offers automatic portfolios based on the information provided. While you can tweak the suggested portfolio, you can’t create one entirely on your own.
You also can’t invest in individual stocks. However, the platform does offer several tax solutions. If you don’t want to do much self-directing or invest in individual stocks but need tax solutions, this platform is best for you.
Robin Hood offers only self-directed investments in individual stocks. It also provides only an individual taxable account, but it is the most straightforward app to use.
It also allows you to round up spending to fund your investments. Robin Hood is a good option if you simply want to invest in each of the ten best 5G stocks and don’t need tax solutions or a retirement account.