A list and profile of the best 5G stocks to invest in for 2021
Fifth-generation wireless connection is set to be the new standard connection for most of the developed world. The new advancement will provide faster internet, less downtime or dead-spots, improve global connectivity, and will also mean advancement of the capacity of our current software.
Classified as a long-term investment, 5G-providing infrastructure is estimated to take 10 years to be entirely accessible. So far, we're only 2 and a half years into the expansion stage and we have many more years of growth to go. With investment into 5G stocks, you benefit from the growth as industries of all kinds shift towards the newer, faster connection.
The Best 5g Stocks to Buy in 2021
But which stocks specifically should you invest in? Luckily for you, we did much of the researching for you and now present you with the top 7 best 5G stocks to invest in this year:
1. Marvell Technology (MRVL)
Market Value: $44.23 Billion
Based in Delaware, the semiconductor company deals in the data storage, communications, and consumer markets. Founded in 1995, the company has a long history of adaptation to the numerous technological advancements made in the industry. Right now, 5G is one of many drivers of growth, and investment in their stocks is sure to provide investors with a chance to profit from that.
In 2019, the company saw annual revenue of more than $2.8 billion and, with the acquisition of Inphi Corporation in April 2021, their numbers in the coming quarters are expected to be much more boosted.
With a rocky 2020, the company saw a dip in stock prices for several months. This year though, prices are expected to rebound and have indicated substantial, albeit conservative, increases in the past two quarters.
With the current rate of $54 per stock, the Bank of America projects the price to increase to at least $62 in the coming few months should the growth be sustained.
2. Qualcomm (QCOM)
Market Value: $157.59 Billion
Based in San Diego, California, the semiconductor company is a market giant known for its advanced broadband technology. Founded in 1985, the company has since proceeded to be one of the largest providers of 5G modems in the world. The company has also expanded to include creating and marketing semiconductor components or software for vehicles, watches, laptops, wi-fi, smartphones, and other devices.
The company saw a revenue of $23.53 billion. It is also one of the faster companies to adapt and provide 5G network modems with their 5G chips already being used in phones by early 2019. Their partnership with Apple is a major source of income and the performance of one on the market affects the other.
Apart from that, the company is also looking into the future of AI in the market and has hired Baidu Veteran, Nan Zhou to be the head of their new AI division.
Though the growth exhibited by the stocks currently is nothing steller, the prices have seen a growth of 49.95% over the past year. Buying stocks of this company is also an investment in their many developments and the potential of those developments to make waves in the technology market.
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3. Analog Devices (ADI)
Market Value: $59.17 Billion
Based in Massachusetts, the semiconductor company specializes in data conversion, signal processing, and power management technology. They currently have more 5G radios than they had 4G radios and it's estimated that the company can grow profit margins by as much as 70% long-term in 5G communications, automotive technology, and industrial markets.
In July 2020, Analog and Maxim Integrated agreed that Analog will acquire Maxim in an all-stock deal that values the combined company at $68 billion. They have also managed to market their technology to such industries as healthcare, heavy industry, communications, computer, instrumentation, automotive, military/aerospace, and consumer electronics applications.
The Bank of America has estimated that the company's stocks can rise from $160 per share to $170 per share should the current growth trajectory be maintained. Stocks have already grown 37.06% in the past 12 months. The company also offers a 1.72% dividend yield -- making them ideal investments for income investors.
4. Teradyne (TER)
Market Value: $19.93 Billion
Though not known as a semiconductor company itself, the Massachusetts-based company deals in the testing of parts and technology over a host of industries. Some of their most high-profile clients include Samsung, Qualcomm, Intel, Analog Devices, Texas Instruments, and IBM. The company also designs automated semiconductor, telecommunications, and industrial testing equipment.
The semiconductor division of their company tests 5G tech of the main sellers in the market -- this creates exposure for the company to the growth of the 5G market. Investment in their stocks is a great non-direct investment option for the more apprehensive investor.
As the company aims to expand operations to more complex semiconductor testing, it is expected to be at par with the growth of the 5G markets in the coming years. As it stands, stock prices have grown over 33% in the last 12 months with the current price at around $120. Estimates place the trajectory of prices to eventually reach $155.
5. Qorvo (QRVO)
Market Value: $20.88 Billion
The North Carolina-based company is described technically as one that designs, manufactures, and supplies radio frequency integrated circuits for wireless communications applications. It was founded as a merger between TriQuint Semiconductor and RF Micro Devices in 2015 which placed its total value at around $12 billion at the time.
The total revenue the company saw last year was more than $3.3 billion. Though by no means the largest revenue earned on this list, many analysts believe investors fail to see the amazing gross profit margins the company sports with an ongoing improvement of the 5G product offerings.
Currently being traded at around $187, many estimates predict that the price per share will be $215 in the coming months.
6. Broadcom (AVGO)
Market Value: $192.03 Billion
Definitely one of the larger companies on this list, this company has a massive and diversified portfolio that makes it a safe bet no matter the market condition. Based in California, the company is notably a maker and seller of semiconductor and infrastructure software products. Product offerings serve the data center, networking, software, broadband, wireless, and storage, and industrial markets.
The orders for 2022 are already fully booked and growth drivers are well expected to outperform once the pandemic restrictions are lifted.
Growth for the company is also doing well even during the pandemic -- reported at 10% growth and 15% EPS growth through at least 2023. Stock prices are also projected to grow to $580. Stock prices have also grown by almost 48% over the past 12 months.
Income investors are also fond of the dividend yield of over 3%. So even in the late stages when 5G infrastructure is completely built, the company will still serve as a viable option for passive income.
7. NXP Semiconductors (NXPI)
Market Value: $52.42B Billion
Based in the Netherlands, the company has operations spread out over 35 countries with over 11,000 employees. Just to set an example of how large the company is, in 2018 the generated $9.8 billion in revenue. It was also the fifth-largest non-memory semiconductor supplier in 2016.
Broadcom has a history that goes as far back as the 1980s when it was essentially a part of Philips. Since then, the company is now an independent entity that has undergone various acquisitions and mergers. Currently one of the largest players in the industry and part of the NASDAQ 100.
The main offering of NXP Semiconductor is it provides mixed-signal and standard products based on its security, identification, automotive, networking, radio frequency, analog signal, and power management expertise.
Though the dividend is currently not yielding too much, the projections for the following years suggest growth both in that department and in revenue streams. The stock prices have grown 53.86% over the past 12 months, and the price is expected to grow to $240 from the current $190 per share. The 20% free cash flow growth and a balanced spreadsheet are also a great attraction among both new and experienced investors.
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And those were the 7 best 5G stocks to invest in this 2021. Through all the technical jargon and the computer lingo, the main thing to understand here is that the internet is growing and more and more people are getting on it.
Now that 5G is here and making the rounds, only expect fast and reliable internet to become the norm that everyone expects.
Buying 5G stocks allows you to benefit from these developments that are sure to make money in the coming months and years.
Although profits are never guaranteed where the market is concerned, with the usual due diligence -- research and studying stocks, the market conditions, and the company's track record -- and diversifying your portfolio to hedge against risks, you're all set to earn profits as fast as 5G internet.