5th generation mobile networks or 5G is set to revolutionize the way in which we interact with technology through faster download speeds and seamless transfer of data. Deployment rate of 5G is gaining traction, driven by intensive infrastructure investments and favorable trial testing results.
The next-gen network is anticipated to provide considerably higher throughput compared with the currently available standard 4G LTE network. Moreover, with reduced latency capabilities, 5G is well poised to support higher bandwidth demand from hyperscalers.
Growth Prospects Abound
5G is expected to unlock the full potential of emerging technologies such as IoT, AI, AR/VR, among others. Smart connected homes, hospitals, factories and cities, and self-driving vehicles remain key beneficiaries of 5G.
Per Allied Market Research data, global 5G market is expected to hit $667.9 billion by 2026 from $5.54 billion valuation in 2020 at a CAGR of 122.3%.
Markedly, IDC is optimistic about the growing deployment of 5G technology in 2020. The research firm expects 5G shipments to reach 8.9% of smartphones shipped next year, accounting for 123.5 million devices shipped.
Moreover, 5G complements IoT as it enables advanced technologies to tap into IoT space, for instance, extending sensor driven IoT capabilities to drones, actuators and robots.
These factors are driving demand for 5G chipsets. Grand View Research estimates, the 5G chipset market to hit $21.786 billion in 2025, at a CAGR of 69.7% between 2020 and 2025.
4 Tech Players Gaining in 5G Space
The companies providing 5G infrastructure hardware, networking equipment, chipsets and devices utilizing the next-gen technology remain well poised to gain from 5G revolution.
We have chosen four technology stocks, which investors can keep a tab on, as they are well poised to benefit from accelerated commercialization of 5G. Notably, each of the stocks has outperformed the S&P 500 Index year to date.
Santa Rosa, CA-based Keysight Technologies KEYS is gaining from strong presence in the 5G network emulation market. Collaborations with Qualcomm, Xilinx and AT&T, and notable acquisitions including Ixia, Anite and AT4 Wireless have enhanced Keysight’s 5G solutions portfolio.
Keysight sports Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, the Zacks Consensus Estimate for current fiscal year has moved upward by almost 7% to $4.15 over the past 30 days.
Greensboro, NC-based Qorvo QRVO is expected to benefit from new 5G product roll outs, including RF front end solutions, power amplifiers and low noise amplifiers. Qorvo’s gallium nitride (GaN) technology has enabled it to support the emerging 5G infrastructure.
The company’s mobile 5G portfolio comprising highly integrated front-end modules (FEMs) are in high-volume production. The company has also participated in 5G field trials and demonstrations. We believe an expanding portfolio enabling 5G deployment augurs well for the company.
Qorvo is a Zacks Rank #3 (Hold) stock. Notably, the Zacks Consensus Estimate for current fiscal year has moved north by 4.4% to $4.30 over the past 60 days.
Woburn, MA-based Skyworks Solutions SWKS is well poised to gain from growing clout of its connectivity solutions and strength in Sky5 product suite with 5G antenna tuners. The company’s latest suite of mini circulators for 5G infrastructure, controllers and LNAs have been adopted by notable infrastructure manufacturers based in Europe.
Moreover, the company’s offerings were selected by Samsung to power its 5G premium Galaxy S10 smartphone, DIRECTV for its high-definition (HD) 4K-enabled streaming set top boxes and Microsoft in Xbox’s wireless earphones.
Skyworks’ base station amplifier solutions with high-efficiency capabilities are securing 5G massive MIMO wins, including a tier-one Korea-based customer.
Skyworks carries a Zacks Rank #3. Notably, the Zacks Consensus Estimate for current fiscal year has moved upward by 4 cents to $5.72 over the past 60 days.
San Jose, CA-based Xilinx XLNX is benefiting from strong growth in the Wireless market, backed by the early 5G production and pre-5G deployments. In fact, 5G deployments in South Korea and a very early start to the ramp-up of the same in China favor business prospects. We believe the growing usage of the company’s Zynq RFSoCs and ACAP products for 5G deployments is a tailwind.
Further, collaboration between Xilinx and Samsung Electronics has resulted in the world’s first commercial deployment of 5G New Radio (NR) in South Korea.
Xilinx carries a Zacks Rank #3. Notably, the company has a positive earnings surprise of 6.34% over the trailing four quarters.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report