If you’re looking for 5G stocks that could make patient investors rich, consider these overlooked hidden gems. These companies are either directly involved in developing and deploying 5G technology or are poised to benefit significantly from its widespread adoption.
As broader indices like the S&P 500 and the Nasdaq continue to rise, the valuations of these companies are set to follow, making them formidable investments. Moreover, investing in these stocks aligns with the growing trend toward smart cities, where technology improves the quality of life through efficient transportation, sustainable energy and smart infrastructure.
Here are three 5G stocks for investors to consider. These companies are at the forefront of urban development and technology, making them promising choices for those looking to capitalize on the future of innovation.
5G, along with renewables, is one of the last untapped supercycles on the horizon. These companies could then offer substantial capital appreciation potential for those who are willing to play the long game.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) has advanced processors and a strategic focus on 5G technologies, supporting its long-term growth potential.
The company’s products, such as the Ryzen Embedded processors and Versal adaptive SoCs, are designed to meet the rigorous demands of 5G infrastructure. These technologies support the development of low-latency, high-efficiency systems essential for 5G networks.
In Q1 2024, AMD reported revenue of $5.5 billion, a 2% increase year-over-year. The gross margin was 47%, while the operating income was $36 million. On a non-GAAP basis, AMD’s gross margin was 52%, with operating income at $1.1 billion and net income at $1 billion.
Strong growth in the Data Center and Client segments, each growing over 80% year-over-year due to increased adoption of MI300 AI accelerators and Ryzen and EPYC processors, bolstered this performance.
Verizon Communications (VZ)
Verizon Communications (NYSE:VZ) is a leader in the 5G space, providing extensive coverage and high reliability. It offers solid dividend yields, making it a strong choice for income-focused investors. VZ pays a dividend yield of 6.7%.
The company’s 5G network supports high-speed connectivity and low-latency services, which are essential for various applications, including mobile broadband, IoT and enterprise solutions.
In the first quarter of 2024, Verizon reported total consolidated operating revenue of $33 billion. This was a slight increase of 0.2% from the same period in 2023. Pricing actions and higher adoption of premium price plans drove this growth. This was despite a decrease in wireless equipment revenue that partially offset it. The company achieved a total wireless service revenue of $19.5 billion, up 3.3% year-over-year.
Verizon has provided a positive outlook for 2024. The company expects total wireless service revenue to grow between 2.0% and 3.5% and adjusted EBITDA growth of 1% to 3%. Verizon’s adjusted earnings per share (EPS) guidance ranges from $4.50 to $4.70.
Skyworks Solutions (SWKS)
Skyworks Solutions (NASDAQ:SWKS) supplies critical analog semiconductors for 5G infrastructure, including components for 5G smartphones.
Integral to the 5G ecosystem, Skyworks supplies critical RF components for high-speed, reliable wireless communication. The company’s products are part of various 5G devices and infrastructure, from smartphones to base stations. Skyworks’ advanced RF solutions address the complex requirements of 5G networks.
In the second quarter of fiscal 2024, Skyworks reported revenue of $1.046 billion, slightly surpassing its guidance. The EPS was $1.55, which also exceeded expectations. The company generated $300 million in operating cash flow. For the third quarter of fiscal 2024, Skyworks anticipates revenue between $900 million and $900 million, plus or minus 2%, and expects a gross margin between 45% and 47%. The projected EPS is around $1.21 at the midpoint of the revenue range.
Skyworks Solutions has received positive reviews from analysts, with a general consensus indicating a favorable outlook due to its strategic position in the 5G market and robust financial health.
Marvell Technology (MRVL)
Marvell Technology (NASDAQ:MRVL) focuses on semiconductor solutions for 5G networks, positioning itself as a key supplier in the rapidly growing 5G market.
For the fiscal year 2024, Marvell reported a net revenue of $5.508 billion. The company experienced a GAAP net loss of $933.4 million, or $1.08 per diluted share. However, Marvell achieved a net income of $1.310 billion on a non-GAAP basis, or $1.51 per diluted share.
In the fourth quarter alone, Marvell generated revenue of $1.427 billion, driven by significant growth in the data center market, which saw a 38% sequential increase and a 54% year-over-year rise.
Looking ahead to the first quarter of fiscal 2025, Marvell expects continued growth in its data center revenue. Initial shipments of its cloud-optimized silicon programs for AI complemented its electro-optics franchise. The company forecasts a net revenue of approximately $1.150 billion, with a non-GAAP gross margin between 62% and 63%.
Ericsson (ERIC)
Ericsson (NASDAQ:ERIC) is at the forefront of global 5G infrastructure development, continuously innovating to maintain its competitive edge.
The company’s technologies are critical for building high-performance, programmable networks necessary for digitalizing society. Ericsson’s solutions support 5G applications, including network slicing, telecom AI and cloud RAN.
In the first quarter of 2024, Ericsson reported net sales of 53.3 billion SEK, a 15% YOY decline. The gross margin improved to 42.5%, up from 38.6% in Q1 2023. The company achieved an EBITA margin of 9.6% and generated 3.7 billion SEK in free cash flow. Despite the sales decline, Ericsson strengthened its gross margin and operational efficiency.
Ericsson expects its Enterprise Wireless Solutions segment and the Global Communications Platform to drive growth. However, the company is cautious about the near-term market environment, which suggests a strong presence in 5G.
Intel (INTC)
Intel (NASDAQ:INTC) invests heavily in 5G technology. It aims to be a leading supplier of processors and other components crucial for 5G networks.
The company’s emphasis on private 5G networks highlights its strategic focus on providing end-to-end solutions for enterprise customers. Intel’s hardware and software portfolio, including its processors, supports various 5G applications.
In the first quarter of 2024, Intel reported revenue of $12.72 billion, slightly below the consensus estimate of $12.76 billion. The company posted a GAAP net loss of $0.06 per share, missing analysts’ expectations of $0.03 loss per share. Despite these challenges, Intel generated significant revenue growth in its PC chip unit, which saw a 33% increase due to a rebound in PC sales.
Intel provided guidance for revenue between $12.5 billion and $13.5 billion for the second quarter of 2024. The company expects a GAAP gross margin of 40.2% and a non-GAAP gross margin of 43.5%.
Cisco Systems (CSCO)
Cisco Systems’ (NASDAQ:CSCO) private 5G offerings for diverse industries and robust revenue growth make it a top contender in the 5G space. Cisco’s private 5G networks support high-performance and reliable connectivity, crucial for enterprise operations.
In the third quarter of fiscal 2024, Cisco reported revenue of $12.7 billion, a slight decrease from the previous year but above analysts’ expectations. The company posted a GAAP net income of $1.88 billion, or $0.46 per share, and a non-GAAP net income of $3.6 billion, or $0.88 per share. Strong demand for Cisco’s networking, security and observability solutions drove this performance.
Cisco raised its full-year revenue guidance to between $53.6 billion and $53.8 billion, reflecting confidence in its growth prospects despite a challenging economic environment. For the fourth quarter of fiscal 2024, the company expects revenue between $13.4 billion and $13.6 billion.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
