The transition from 3G to 4G was primarily about telecom stocks like Verizon Communications Inc. (NYSE: VZ) and AT&T (NYSE: T), and the transition to 5G is no different.
Verizon's 5G nationwide mobile network is available in over 2,700 cities as it continues to expand its network. Its 5G ultra-wideband network uses high band (mmWave) and mid-band (C-band) spectrum with speeds up to 10x faster than its nationwide network. 5G phones that step out of the coverage area automatically shift to 4G LTE mode.
AT&T is the nation’s largest wireless provider, with 44.8% of the country’s wireless subscriptions and telecommunications, media and technical services worldwide. It offers a range of devices and service plans and leads the switch to 5G. Its 5G service comes in three tiers that unlock the full potential of the technology. The base AT&T 5G uses the low band for wider coverage and can reach 281 million people in 22,000 cities. The high-end 5G+ uses millimeter wavelength and reaches 45 major metropolitan areas, stadiums and other high-traffic areas. The 5G+ with C-band offers high speed and wide coverage.
The deployment of 5G technology is transforming various sectors and industries, including semiconductors, equipment and infrastructure, real estate investment trusts (REITs), streaming services, media companies, video gaming, cloud computing, and healthcare. By investing in these companies and sectors, investors can capitalize on the potential of the 5G technology that is revolutionizing how we connect and interact with the digital world.
Semiconductors
Like most things tech, the building blocks of 5G are found in the tiny computer chips that allow processors to calculate data and execute commands.
Qualcomm (NASDAQ: QCOM)
Qualcomm is a key player in the semiconductor industry, providing essential chips for 5G technology. Its Snapdragon processors are widely used in 5G-enabled smartphones, making it a cornerstone of the 5G ecosystem.
NVIDIA (NASDAQ: NVDA)
Best known for its GPUs, Nvidia also plays a critical role in 5G infrastructure. Its processors support data centers and AI applications, which are crucial for the enhanced capabilities that 5G offers.
Skyworks Solutions (NASDAQ: SWKS)
Skyworks provides analog semiconductors optimized for next-gen 5G wireless infrastructure applications. It supplies chips for front-end modules and radio frequency systems, including Apple’s 5G iPhone RF front-end modules. This positions Skyworks as a critical supplier in the 5G landscape.
Equipment and Infrastructure
Before wireless signals reach connected devices, they must pass through a network of basic hardware, including fiber optic wires. Although this network is invisible to consumers, it’s vital to enabling 5G.
Corning Inc. (NYSE: GLW)
Corning supplies the fiber optic cables essential for 5G networks. Its innovations in glass and fiber optic technology are fundamental to building robust 5G infrastructure.
Ciena Co. (NYSE: CIEN)
Ciena provides critical networking systems, services, and software that enhance the speed and performance of 5G networks. Its technology is integral to the seamless operation of 5G infrastructure.
Real Estate Investment Trusts
5G requires a new network of mini towers and other fixed-in-place assets, which is creating opportunities for REITS that own and operate the core real estate holdings that are needed to expand the 5G network.
American Tower (NYSE: AMT)
American Tower manages real estate needed for 5G infrastructure, offering growth and income opportunities. Its extensive portfolio of communication sites is critical for 5G deployment.
Crown Castle (NYSE: CCI)
Crown Castle owns and operates a vast network of communication infrastructure, including small cells and fiber, essential for the expansive reach of 5G technology.
Media Companies and Streaming Services
These companies create and stream films, music, and other programming. 5G technology will also benefit social media companies.
Netflix (NASDAQ: NFLX)
The rise of 4G enabled Netflix to thrive, and 5G’s enhanced capabilities will further improve streaming quality and user experience. Netflix continues to innovate in content delivery, leveraging the increased speeds and lower latency of 5G.
Disney (NYSE: DIS)
With its extensive streaming services, Disney stands to benefit from 5G’s ability to deliver high-quality content more efficiently. This will enhance the viewing experience for its vast subscriber base.
Comcast Corporation (NASDAQ: CMCSA)
Comcast, through its Xfinity brand and NBCUniversal subsidiary, benefits from 5G by enhancing its broadband and streaming services. The company's Peacock streaming service can leverage 5G to provide smoother streaming experiences and better content delivery to its subscribers.
Warner Bros. Discovery, Inc. (NASDAQ: WBD)
Warner Bros. Discovery, including brands like HBO Max and Discovery+, uses 5G technology to enhance streaming capabilities and deliver richer content experiences. The increased bandwidth and reduced latency of 5G networks will support higher-quality video and more interactive content features.
Video Games
5G technology will enable faster download speeds, lower latency, and enhanced cloud gaming experiences, making high-quality gaming more accessible and seamless on mobile devices.
Activision Blizzard (NASDAQ: ATVI)
Activision Blizzard is poised for growth as 5G enables better gaming experiences with lower latency and higher speeds. This is crucial for both mobile gaming and cloud-based gaming services.
Electronic Arts (NASDAQ: EA)
Electronic Arts will also benefit from the improved connectivity and performance that 5G offers, enhancing its gaming platforms and user experience.
Cloud Computing
5G will enable faster and easier communication with cloud platforms and cloud-based applications.
Amazon (NASDAQ: AMZN)
Amazon’s AWS will benefit from faster and more reliable communication with cloud platforms. This will enable quicker data processing and real-time applications, crucial for various 5G-enabled technologies.
Microsoft (NASDAQ: MSFT)
Microsoft’s Azure cloud services will also see enhancements with 5G, offering better performance for enterprise applications and IoT devices.
Healthcare
Telehealth and advancements in virtual reality and AI in healthcare will expand with 5G, improving remote patient care and diagnostics.
Teladoc Health Inc. (NYSE: TDOC)
Teladoc Health offers virtual healthcare consultations and remote patient monitoring, with 5G technology enhancing the quality and accessibility of its telemedicine platforms.
Medtronic (NYSE: MDT)
Medtronic is using 5G to enhance its remote monitoring systems for patients with chronic diseases, providing more accurate data and timely medical interventions.
Combination: Infrastructure, Semiconductors, and Service Providers
Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC)
Stockholm-based ERIC is a multinational network telecommunications company that provides infrastructure and networking services in over 180 countries worldwide. It has grown a portfolio of more than 40,000 patents. Its 5G intellectual property (IP) portfolio helps it provide an end-to-end 5G network buildout solution by upgrading existing networks. Ericsson has contracts with the largest telecom providers in the world, from a $3.5 billion deal with T-Mobile and Verizon choosing the company in 2017 for its fixed 5G network rollout. Ericsson also built 65% of the AT&T 4G mobile network.
Nokia Oyj (NYSE: NOK)
Finland-based Nokia supplies RAN products and services across 2G to 5G technologies. It has secured major 5G contracts with companies like India's largest mobile carrier, Reliance Jio and Bharti Airtel, solidifying its position in the 5G market.
