Fifth-generation wireless technology, or 5G, is turning out to be one of the most rapidly growing areas of tech. Why should it be on your radar? This transformative technology will support the future of the telecommunications industry, as wireless providers roll out 5G networks all over the world. These next-generation networks allow for faster data transmission, higher-quality internet connections, greater global connectivity and increased capacity for advanced connected software applications. There are many ways to invest in 5G technology. You can invest in 5G networks, network providers, semiconductor manufacturers and even real estate investment trusts. If you want to stay ahead in technology investing, here are seven 5G stocks to consider buying.
Verizon Communications Inc.
When it comes to 5G winners, network carriers are at the top of the list. Verizon (VZ) has been partnering with companies in different industries to bring its 5G technology into different markets, and in particular, the metaverse. Verizon has been at the forefront of high-speed connectivity in the realm of virtual reality. Using 5G in augmented reality will allow people to have immersive experiences in the metaverse. Verizon committed to bringing 5G to more than 100 million people early this year, for home internet, businesses and smartphones via 5G Ultra Wideband.
Digital Realty Trust Inc.
Digital Realty (DLR) is a data center real estate investment trust, or REIT, that provides digital infrastructure storage. Some of Digital Realty's customers include Verizon, Adobe Inc. (ADBE), LinkedIn and Amazon.com Inc.'s (AMZN) Amazon Web Services, or AWS. As 5G continues to spread, more data will be developed and consumed. This requires the proper infrastructure to manage bandwidth capacity and connectivity for the size and scale of this digital information. Digital Realty has experience in scaling digital businesses in information technology services, financial services, health care, manufacturing and energy, among other sectors. With its focus of "becoming the heart of the internet," Digital Realty is viewed by many as the market's top 5G data center stock pick.
SBA Communications Corp.
SBA Communications (SBAC) operates 5G wireless communications towers and is another strong REIT pick among 5G stocks to buy. SBA generates most of its revenue from the U.S. market, where it has closed more than 1,300 transactions, representing the acquisitions of towers across all 50 U.S. states, making it well positioned for the 2022 5G ramp-up. SBA has a trust business model, brokering transactions that range from single towers to large-scale portfolios of thousands of towers all over the world, in Canada, Central and South America, and South Africa.
American Tower Corp.
American Tower (AMT) is a specialized REIT that owns a portfolio of wireless communications towers. Towers are a critical and stable part of the wireless network infrastructure, which makes the stock an excellent long-term investment. American Tower has also been expanding its holdings into the data center market, laying the foundation for infrastructure solutions for 5G. Wireless subscriber and usage growth are tail winds for AMT. It is expected the company will have promising growth across its global portfolio of towers, many of which are in prime locations. As 5G technology continues to expand in both developed and emerging markets, there will be a need for more cell sites. AMT has a proven record of delivering tower solutions to new sites that can meet the needs of wireless and broadcast networks.
Wireless carrier AT&T (T) is known for the reliability and speed of its 5G networks. AT&T has rolled out its 5G services nationally, offering its customers faster speeds and more capacity. AT&T serves more than 100 million U.S. customers through communications and entertainment services, as well as nearly 3 million business customers. Demand for 5G will rise, which will be an opportunity for AT&T to expand its communication services to more customers. The company expects to invest $24 billion in 2022 to deploy fiber and 5G to help drive earnings growth. T stock also offers an attractive annual dividend yield of 5.21%, which may be appealing to income-seeking investors.
While Nvidia (NVDA) is known for its graphics processing units, or GPUs, used in video games, the company has been gaining traction in 5G through its AI-on-5G platform, a service that simplifies deployment of artificial intelligence applications over 5G networks. For 5G connectivity, Nvidia touts its Nvidia Aerial program, a network for building high-performance 5G applications. Nvidia's programs will allow companies in a variety of industries to easily adopt 5G. Nvidia is also in the semiconductor business. Semi chips, the brain of a computer, power many devices, such as electric vehicles, smartphones and laptops, and are in high demand across industry sectors. Despite Nvidia providing a cautious outlook for the next quarter in its latest earnings release, the company's revenues continue to increase quarter over quarter and Nvidia remains a leader in the semiconductor industry. Nvidia investors may see this as an opportunity to accumulate shares at a better value.
Qualcomm (QCOM) is one of the well-known players in wireless technology that's leading 5G innovation. Qualcomm technologies help the mobile ecosystem function, and are found in every 4G and 5G smartphone. The company is focused on scaling and bringing new levels of performance to the 5G system. Qualcomm's technology solutions contribute to other industries as well, including the automotive industry, the internet of things and computing. Qualcomm has a history of posting strong earnings growth. In its second-quarter earnings results, Qualcomm delivered more than $11 billion in revenue, a 41% increase compared with the same period last year. It was its third consecutive quarter of record results. Qualcomm also has a history of returning capital to shareholders through dividends. QCOM currently offers a 2.2% dividend yield.
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