Artificial intelligence is stealing the headlines, but there are some dark horses in the technology advancements that deserve investors’ attention. 5G technology will be in high demand in 2024 thanks to the availability of 5G networks and more affordable access.
5G is the next generation of mobile internet being developed to replace 4G, offering ultra-fast speeds and reduced communication time between devices.
According to Ericsson, by the end of 2023, 20% of global mobile phone contracts will be 5G-based, reaching 1.6 billion 5G users worldwide. This represents a year-on-year growth rate of 63%. By 2029, more than 5 billion people, representing about 85% of the world’s population, will be using (and paying for) 5G network access.
“5G is one of the key digital revolution trends in the world of connectivity. It is the next generation of wireless network technology,” said Sergey Dorzhevsky, portfolio manager at Gabelli Funds in White Plains, New York. talk. “We expect that large-scale digital transformation will be possible in the future.”
5G is expected to offer ultra-fast data speeds of more than 1 Gigabit per second (peak speeds up to 10 Gigabits), ultra-low latency of less than 1 millisecond, and the ability to connect up to 100 times more devices than today’s 4G networks. I am. says Druzhevsky. “The key drivers for 5G development include the growing demand for broadband on mobile networks and service providers for the Internet of Things,” he says.
As interest in 5G surges in early 2024, investors are lining up to take a swing at 5G stocks, and a familiar name is topping the list. Meanwhile, major carriers are focusing on fixed wireless home broadband, which is the flagship platform of 5G property.
“T-Mobile and Verizon are two wireless carriers that are aggressively expanding their fixed wireless operations in the United States,” Dluzhevskiy says. “At the end of December 2023, between the companies there were approximately 7.9 million fixed wireless home broadband customers, with approximately 3.8 million connections added during the year.”
Here we take a closer look at T-Mobile US Inc. (ticker: TMUS) and Verizon Communications Inc. (VZ), as well as four other rising 5G stocks that also pay fair to excellent dividends. As with any stock addition to your portfolio, it’s important to research individual companies to see if they’re a good fit.
| 5G stock | Future dividend yield |
| Verizon Communications Inc. (VZ) | 6.6% |
| T-Mobile US Inc. (TMUS) | 0.8% |
| AT&T Corporation (T) | 6.5% |
| Broadcom Corporation (AVGO) | 1.6% |
| Nvidia Inc. (NVDA) | 0.02% |
| American Tower Corporation (AMT) | 3.3% |
Verizon Communications Inc. (VZ)
With a closing price of $40.35 per share on March 5, VZ stock is up 8.8% since the beginning of the year. This significantly outperformed the S&P 500, which returned 6.5% over the same period. Verizon also offers shareholders his impressive 6.6% dividend, making it a popular spot for income-oriented investors.
Verizon’s 5G network has more than 200 million users and its fixed wireless access subscribers have grown to more than 3 million.
Meanwhile, Verizon is partnering with high-profile brands such as Amazon Web Services and IBM to develop 5G apps in key areas such as automation, cloud-based gaming, and drone technology.
Like Verizon, TMUS is partnering with industry leaders to expand its vast 5G connectivity network. Last year, T-Mobile partnered with his Comcast Corp. (CMCSA) to buy his 5G airwaves from the telecom giant in a deal valued at $3.3 billion, up from an estimated $1.2 billion depending on the number of market licenses T-Mobile generates. acquired. The deal won’t be formalized until 2028, during which time T-Mobile will lease 5G airwaves from Comcast.
T-Mobile also has a head start thanks to its acquisition of Sprint in 2020, giving the company a significant advantage in the wireless spectrum over competitors such as Verizon and AT&T Inc. (T). I did. The company estimates that it will have up to 8 million fixed broadband subscribers by 2025, and its 5G network will connect to 40 million households across the country.
“T-Mobile US is one of the spectrum-rich companies and should benefit in a 5G world,” Dluzhevskiy said. “The need for additional wireless spectrum will increase as data demand increases and mobile operators seek to make 5G networks more ubiquitous and powerful. The frequencies in between) appear as a “Goldilocks” spectrum and provide excellent service. The balance between propagation and capacity is key and will continue to be the main foundation spectrum for 5G over the next decade. ”
As of March 5, T-Mobile stock was valued at $165.90, up 3.9% so far in 2024. According to TipRanks data, the average analyst rating for TMUS stock is a Strong Buy, with a 12-month price target of $185.73.
AT&T continues to pour money into its mobile and fiber networks, pledging in a March 4 shareholder letter to spend between $21 billion and $22 billion in 2024. “The company remains focused on building critical high-performance network infrastructure for mobile and fiber networks,” AT&T said in a statement.
Like Verizon, AT&T also pays a hefty 6.5% dividend. The company is also in the midst of a debt reduction campaign, with net debt dropping to $129 billion from $169 billion, the lowest since the WarnerMedia spinoff in spring 2022.
The communications industry icon is expanding its 5G network, leveraging ultra-fast 5G download speeds to boost U.S. wireless service revenue by 5%. With estimated speeds up to 100 times faster than his 4G network and big-name investors like billionaire Ray Dalio on board, T is likely to be a mainstay in 5G for years to come.
With a year-to-date gain of 20.3%, Broadcom is certainly trending in the right direction in 2024. Analysts are bullish on the stock, with Bernstein analyst Stacy Rasgon giving it a Buy rating. Oppenheimer analysts echoed similar sentiments, claiming AVGO stock would rise to $1,500 per share from its March 5 closing price of $1,342.75.
Broadcom’s fiscal first-quarter results are scheduled to be released on March 7, with early estimates calling for revenue growth of 31.5%, or up to $11.7 billion. However, overall earnings are expected to lag, with analysts expecting earnings of $10.29 per share, down slightly from the first quarter of 2023.
Broadcom, a longtime semiconductor leader, has made significant inroads into the 5G market. The company inked deals with Apple Inc. (AAPL) and Broadcom in 2023 to build 5G radio frequency and wireless connectivity components for the hardware giant. Broadcom also recently acquired software developer VMware. This gives AVGO a significant boost in running network connectivity software across fixed networks and his 5G network.
Broadcom is wisely positioning itself in the 5G space, particularly in providing the semiconductors, mobile technology infrastructure, and software connectivity needed for 5G growth. This scenario should help AVGO benefit from 5G adoption in the future.
The AI chip manufacturing giant, known for its graphics processing units (GPUs), is expanding into 5G through its AI-on-5G platform, a service that simplifies the deployment of artificial intelligence applications on 5G networks.
As of March 5, the company’s stock price has risen 73.6% since the beginning of the year, and the market continues to be hot for shareholders, with a return of 260% over the past year. Analysts say Nvidia’s calendar year profit should reach 90%.
Nvidia’s foray into 5G should also do well, but investors may need to be patient.
“Five years after the introduction of 5G, network coverage and capacity have skyrocketed, but revenue growth has slowed and costs have risen for a largely proprietary and inflexible infrastructure,” says Nvidia Electric. said Ronnie Vasishta, senior vice president of communications, in a recent blog post. “Meanwhile, 5G RAN utilization remains at less than 40%.”
Vashishta expects 2024 to see a “significant reassessment of 5G investment propositions” as companies grapple with networking deployments and revenue opportunities in this space.
“The new year will see us aggressively pursue new revenue streams in existing spectrum to uncover new monetizable applications,” he says. “We also expect to see an overall reduction in operating expenses as companies leverage AI tools to improve performance, improve efficiency, and reduce costs. It will determine how much operators invest in 6G technology.”
American Tower Co., Ltd. (AMT)
American Tower is a real estate investment trust (REIT) with a portfolio of wireless communications towers. Towers are a critical and stable part of the wireless network infrastructure and a source of long-term sustainability for businesses.
The company is well-positioned to benefit from broadband growth as part of the national infrastructure expansion. With many towers in rural areas, the company appears poised to capitalize on its efforts to provide broadband services in more remote areas.
“American Tower owns the tower infrastructure carriers need to deploy 5G networks, so carriers stand to benefit from continued ramp-up. ” said Leo Smigel, founder of Analyzing Alpha, an algorithmic trading firm in Mars, Pennsylvania.
Even more attractive for income investors, AMT has a respectable dividend yield of 3.3%.
