5G technology is an important combination of words, and one we used to see splashed across headlines several years ago. However, the status quo has changed fairly dramatically since then and has left the 5G business in the shade. But, this technology has continued to develop in the background and is likely to come back into focus at some point. So, what does that mean for companies that work on 5G evolution? Is this a good moment to jump into the 5G market?
Important: even if you’re a 5G hater, give this article a read before burning it – you never know what you might find out.
When we talk about 5G stocks, we mean the many companies that develop 5G technology — to varying extents. Some of them, like Apple or Alphabet (which includes Google), have become household names. The others are more specific. So, we decided to choose those that analysts think could have the most interesting journey over the next twelve months.
The first pokemon in our wonderful pack is Marvell Technology. And no, it’s not a subsidiary business of Iron Man. Marvell is a company engaged in the provision of data infrastructure and semiconductor solutions. Marvell Technology Group has long been a leader in developing data processing units (DPUs). Its chips are instrumental in moving large amounts of digital information in networking equipment and data centers. Since mobile networks are increasingly being used in enterprise applications, 5G has been a natural fit for Marvell’s portfolio.
5G infrastructure is one of the most promising directions for the company, along with its cloud and automotive infrastructure development, both of which have the potential to see impressive growth in the near future. To broaden its exposure to 5G, the cloud, and other business solutions, Marvell acquired Inphi and Innovium in 2023. Taking into account that 5G technology advances and network deployment increase in markets around the globe, Marvell has a clear path to fast growth for years to come.
Another possible reason for Marvell’s growth potential is a recent deal that saw the brand join Vodafone and Samsung Electronics to accelerate work on 5G networks across Europe – the key here is Marvell’s advanced System-on-a-Chip, which gives smartphone users access to a faster and more reliable 5G connection. Combining their technical leadership and embracing open standards with advanced silicon chipsets, they can deliver a system with features and performance that rivals traditional mobile radio networks and can better them in the future.
Now, don’t get us wrong, things aren’t all sunshine and rainbows – Marvell Technology has lost around 41% in the last year. But, that means many analysts consider this a great time to invest. The average forecast for Marvell is +65% in the next 12 months.
Our second choice to Marvell is loved by market experts Liberty Broadband, which is engaged in a broad range of communications businesses. It’s worth noting that it’s not a hugely popular stock for market analysis so there are fewer reviews to give an accurate and broad opinion.
The past year wasn’t great for Liberty Broadband. Okay, we’re probs being too kind there — the stock has lost about 45% in the last twelve months. If Liberty doesn’t have a place in your portfolio, that could be good news for you — as well as for the 25 million potential customers out there for the company and its subsidiary, Charter Communications. The average forecast for Liberty Broadband stock is for around 60% growth in the next twelve months.
In addition, our top 5 picks highlight three other well-known companies that are connected with 5G technology and offer growth potential, and you’ve probably heard of them. Those honorable mentions, ladies and gentlemen, are Alphabet, Vodafone, and Broadcom. So, let’s look at the feel-good numbers here – average analyst coverage reckons that Alphabet can expect growth of 31%, Vodafone may gain around 29%, and Broadcom — about 26%.
As you see, 5G is expected to not only make internet and communication speed exponentially faster, but also to advance cutting-edge technologies that hold enough promise to transform our world — from artificial intelligence (AI) to self-driving vehicles. With so much potential and money to be made, it should come as no surprise that companies large and small are pushing into the 5G space.
Kinda sounds like 5G stocks are the real goldmine, am I right? Could be. But, it’s hard to forget that there is an enormous world crisis going on right now, nourished by the consequences of Covid-19, the military confrontation between Russia and Ukraine, the energy crisis, and accelerating (despite all efforts) inflation. Oh, dear… Things ain’t looking quite as rosy now, are they?
Obviously, none of the aforementioned factors belongs to the growth drivers category. Therefore, general predictions about the future of the world and the American market aren’t particularly bright. Let’s take a look, for example, at what has been going on with the S&P 500 index – which lists the 500 biggest American companies – over the last year. In the below chart, you can take a look at how SPX and 5G stocks have performed in the last twelve months.
It seems more frightening than soothing, heh? Many experts still think that the American market is overvalued and expect further declines. When there is a dramatic drop in the market, it hits almost every stock – including 5G stocks.
On the other hand, there’s no way any of us can with certainty predict how things will unfold in the stock market, and you should remember the famed Dumbledore in times like this: Happiness can be found even in the darkest times if only one remembers to turn on the light. Translated into market lingo, that means that even in the midst of a bear market, there’s always an opportunity somewhere – maybe 5G stocks offer such a chance. But, before making any decision, remember to do your own analysis. That’s rule #1 to help you be a successful investor.