Despite AI’s dominance, 5G stocks have huge growth potential that’s too good to pass up
We are in the era of fifth-generation (5G) wireless internet, a transformative technology that represents a new era of connectivity. And given the disruption this technology has caused and will cause, investing in 5G stocks makes sense.
However, 5G stocks have lagged behind AI and other disruptive technologies. Many believe the 5G boom is over, especially since AI has propelled the stock market to new heights over the last year. However, the 5G wireless market is projected to grow significantly from $30.13 billion in 2023 to $224.47 billion by 2032. Therefore, it’s a great opportunity for investors to jump on 5G stocks that stand to gain big as the technology becomes more widely adopted.
With this in mind, these three companies are heavily involved in the development and deployment of 5G technology. Moreover, these 5G stocks are set to benefit greatly from its global adoption, boasting great prospects for investors who want to bet on the future of innovation.
T-Mobile (TMUS)
Image source: Shutterstock
T-Mobile (Nasdaq:TMUS) is the third largest wireless carrier in the United States, with over 30% market share. Additionally, its strong presence in the communications sector has made it a pioneer in the 5G field, and its 5G services are often considered the best option among its peers.
Peter Osvaldik, T-Mobile’s executive vice president and chief financial officer, supports this view, highlighting that T-Mobile boasts at least 40% market share in the top 100 markets, and recent research backs up the company’s lead in 5G coverage nationwide, at about 54%.
Moreover, TMUS shares have demonstrated an incredible wealth compounding effect, returning more than 482% to shareholders over the past decade – an astounding statistic that highlights the strength of the company’s underlying business, which has an industry-leading margin profile and enviable liquidity.
Verizon Communications (VZ)
Image source: Tada Images / Shutterstock.com
Verizon Communications (New York Stock Exchange:VZ) is a top US telecommunications company that continues to outperform in a fiercely competitive arena. The company is the #1 US telecommunications company in terms of revenue and is playing a key role in the 5G wave. Its recent quarterly report offers some interesting insights into the company’s aggressive expansion into new territories and improvements to its existing network.
According to RootMetrics, Verizon provides 5G access to about 13% of the U.S. and is considered the most reliable 5G network. The mobile network testing company reported that in the first half of 2023, Verizon outperformed competitors in 112 of 125 markets.
Like T-Mobile, Verizon also operates a consistent business with a similar profit margin profile. However, the biggest differentiator for investors is Verizon’s superior dividend profile. It has a 6.5% dividend yield and has increased its dividend for 19 consecutive years. Thus, the company plays a key role in shaping the future of the US communications industry.
Broadcom (AVGO)
Source: T. Schneider / Shutterstock.com
Broadcom (Nasdaq:AVGO) is a major semiconductor company that makes the microchips and processors needed to power millions of 5G networks across the United States.
As a leader in the 5G chipset industry, Broadcom’s semiconductor innovations are applied in base stations and network equipment. The company’s advanced chips effectively improve data throughput and connectivity, and it develops essential radio frequency system solutions and switch fabric technologies to meet the demands of 4G with higher speeds and lower latency.
In 2023, Broadcom’s 5G-related revenues will surge by $5.9 billion, with AI-related revenues accounting for $4.2 billion of its total revenue of $28.2 billion. However, in recent quarters, the company’s AI-related revenues have skyrocketed, dominating other segments. Still, 5G sales will still make up a significant portion of the total and could be a major growth driver for the company’s stock price. Moreover, the company’s strategic positioning in these cutting-edge technologies continues to highlight its market dominance while ensuring continued growth and influence in the technology sector.
As of the date of publication, Muslim Farooq did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are solely those of the author, which is subject to InvestorPlace.com copyright. Publication Guidelines.
On the date of publication, the editor in charge did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
