About 5G technology
Communication technology has grown significantly since the inception of mobile communication devices. There are currently 4 generations of wireless communications technologies supporting cellular data networks. These are 1G, 2G, 3G, and 4G, which was the latest and fastest until the 5G network was launched.
5G is the 5th generation wireless communication technology that is one hundred times (x100) faster than 4G, and the new infrastructure, such as higher frequency antennas are already being built.
The advantages of this network include increased speed, lower latency, and therefore greater capacity for remote execution. Additionally, more devices can be connected with the potential for implementing virtual networks (network slicing). The lower latency means huge files or websites that require a lot of time to load will be able to load at a fraction of the time. With a 5G network, mobile applications can be executed from the cloud instead of having to install such apps or other files on mobile devices, thus saving space.
The technology also has the potential to favor the Internet of Things (IoT) as it allows the connection of up to millions of devices per square kilometer with instant access to the internet and real-time sharing of data. This is what will drive the building of smart cities in which autonomous cars can be operated and better surveillance can be carried out with camera devices fixed in strategic parts of such cities.
In spite of the seemingly great advantages that the 5G network has, there are concerns raised by individuals and groups, which have been strongly debated. For instance, some have connected the COVID-19 pandemic to 5G technology as its origin and may be responsible for weakening the immune system in humans.
Apart from the health concerns surrounding 5G, it is said to have negative impacts on vulnerable areas of the environment. Some researchers argue that as several devices can be connected to the network, the huge energy use can eventually contribute to global warming. There are also security concerns on the 5G network as a massive DDoS attack could easily be deployed against the network with many devices connected.
However, researchers in technology and radiation studies have expressed that the 5G does not have the capacity to cause any of the damages that it is said to cause. This is because 5G radiation is non-ionizing and does not have the kind of energy required to penetrate the human body or cause any damage to the genetic structure. This makes it impossible for the radiation to induce cancer or cause any of the other health issues being raised.
5G industry projections
Despite the growing controversy around 5G, there are investment opportunities for investors with the new technology.
The industry is expected to reach $5.53 billion in 2020 and $667.90 billion by 2026, owing to a projected Compound Annual Growth Rate (CAGR) of 122.3% between 2021 to 2026. In the long run, it is projected that the industry will contribute $13.2 trillion to the global economy and support 22.3 million jobs by 2035.
Though relatively new, it is one of the fastest-growing technology and has registered its presence in the global financial market. Stocks from different 5G companies have now gone live on 24 markets and the GSM Association (GSMA) projects that it will be 20% of global connections by 2025. The GSMA also predicts billions more IoT devices will be coming on stream over the next five years and that between 2019 and 2025, the number of global IoT connections will more than double to almost 25 billion.
As of January 2020, 5G had been deployed in 378 cities in 34 countries. The cities have varying levels of deployment with some having full deployment while others have partial deployment and more are expected to be covered. Ericsson, a Swedish telecom company projects that the network will cover 65% of the world’s population by 2025.
Additionally, our previous report has revealed that the global adoption of the 5G network is set to skyrocket in the next five years. The data compiled by Finbold.com estimates that by 2025, the number of 5G connections is expected to hit 2.7 billion worldwide, a growth of at least twenty times from this year’s figure of 120 million.
With such a promising future for the technology, its potential as an investment can hardly be debated. There are currently several 5G companies with stocks that are potentially profitable for investors in the long run. As the preparation for the full launch of the network progresses, the stocks may hold value in the near future. In this article, we will reveal our top 5 picks of the best 5G stocks to buy in June 2020.
5G Stocks to keep an eye on
CEVA (NASDAQ: CEVA)
Market Cap: $832.97 million
Ceva (NASDAQ: CEVA) has grown to become one of the top stocks in the 5G technology sector. The company behind it, Ceva Inc is a U.S-based technology company that specializes in semiconductors. It serves as a licensing company for signal processing platforms and artificial intelligence processors for semiconductor companies and original equipment manufacturers (OEMs) serving the mobile, consumer, automotive, industrial, and Internet-of-Things (IoT) markets worldwide.
Formerly known as ParthusCeva, Inc., it also offers licenses to signal processing intellectual properties (IPs), including platforms for 5G baseband processing. This covers signal processing for handsets and base station RAN including integrated cellular IoT solutions; digital signal processor (DSP) platforms incorporating voice input algorithms and software for voice enabled devices and a host of others.
Its services also include provision of internet protocols (IPs) for Bluetooth and Wi-Fi platforms worldwide. It licenses its technologies to companies that design, manufacture, market, and sell application-specific integrated circuits and application-specific standard products to wireless, consumer electronics, and automotive companies for incorporation into various end products. Its technologies are licensed via direct sales force.
The company recently won the CEM Editor’s Choice Award for its Bluetooth 5 IP which was selected as the most competitive IoT solution in China. Also early this month, the Ceva announced its first high performance Sensor DSP Hub, SensePro, a family that serves as hub for processing and fusing of data from multiple sensors including camera, Radar, LiDAR, Time-of-Flight, microphones and inertial measurement units.
According to analysts, 12 month price targets for Ceva in the last 3 months, the average price target is $35.00 with a high of $36.00 and an absolute low of $34.00.
Verizon Communications Inc. (NYSE: VZ)
Market Cap: $232.93 billion
Verizon Communications Inc. (NYSE: VZ) has set itself apart as one of the top companies in the 5G industry and its stock is one of the leading ones with a promising future. First founded in 1983 as Bell Atlantic Corporation, its name was changed to Verizon Communications Inc. in June 2000. Its clients include consumers, businesses, and governmental entities to whom it offers communications, information, and entertainment products and services worldwide.
Consumers patronise services such as postpaid and prepaid service plans, Internet access on notebook computers and tablets, mobile devices, and other wireless-enabled connected devices such as smart watches and other wearables.
Verizon Communications also provides internet connectivity, video, and voice services for homes as well as virtual networks to mobile virtual network operators. As at the end of 2019, it had about 95 million wireless retail connections, 6 million broadband connections, and 4 million Fios video connections.
Its business segment provides network connectivity products, including private networking, private cloud connectivity, virtual and software defined networking, and Internet access services; and Internet protocol-based voice services, unified communications and collaboration tools, and customer contact center solutions.
It also offers a range of management and data security services; domestic and global voice and data solutions, including voice calling, messaging services, conferencing, contact center solutions, and private line and data access networks; customer premises equipment; installation, maintenance, and site services; and IoT products and services.
As at 31 December 2019, the segment had 25 million wireless retail postpaid connections and 489 thousand broadband connections and is expanding its reach with a strategic partnership with HERE Technologies and Dignitas as well as with Emory Healthcare to develop and test 5G Ultra Wideband-enabled use cases.
The company recently acquired enterprise-grade video conferencing and event platform Bluejeans to expand its immersive unified communications portfolio, making the stocks to have a brighter future. Verizon ended 2019 with the highest Q4 with the highest wireless adds, increased cash flow and revenue growth in 6 years and 2020 may still be better.
VZ currently has a market cap of $232.93 billion; its stock is expected to hit $60.17 based on its 12-month price projection with a high of $70.00 and a low of $54.00.
Inseego Corp. (NASDAQ: INSG)
Market Cap: $1.14 billion
Inseego Corp. (NASDAQ: INSG) is a United States technology company specializing in communications equipment. It is involved in design and development of mobile, Internet of Things (IoT), and cloud solutions which are important services in the growing digital global economy. Its products include among others 4G and 5G fixed wireless routers and gateways.
It provides wireless 3G, 4G, and 5G hardware products for vertical markets, including private LTE/5G networks, First responders network authority/Firstnet, SD-WAN, telematics, remote monitoring and surveillance, as well fixed wireless access and mobile broadband devices. The company currently has over 50 service provider partners. It also has a delivery system fully protected that has traveled over 6 billion miles for delivery of its products.
Inseego announced its Q1 2020 preliminary revenue which it expects to exceed the current consensus of $52 million. Since early March, it has seen rising demand for its mobile connectivity products. On April 1, the company announced it was scaling up its production of 4G and 5G MiFi mobile hotspots and other wireless connectivity devices to meet the unprecedented surge in demand. It was attributed to the increasing need to work online for individuals, private companies as well as government agencies due to the COVID-19 pandemic.
Because of this rising demand, Inseego Incorp. Expects a significant surge in its Q2 revenue to the range of $75 to $85 million. This is not just true for Q2 but is likely to be true for the rest of the year as the demands are expected to keep rising as the COVID-19 pandemic continues to spread to more places.
INSG currently has a market cap of $1.14 billion and analysts place the 12-month stock price target at $12.10 with a high of $13.50 and a low of $10.00. The sentiment right now indicates a moderate buy, making it a good prospective investment and a good choice to buy in July.
Inphi Corporation (NYSE: IPHI)
Market Cap: $5.62 billion
Inphi Corporation (NYSE: IPHI) is a U.S-based technology company that specializes in semiconductors. Formerly known as TCom Communications, Inc., the company changed its name to Inphi Corporation in 2001 after it was incorporated in the year 2000.
It produces 10G-600G high-speed analog and mixed-signal semiconductor components and optical subsystems to networking original equipment manufacturers (OEMs), optical modules, cloud and telecom service providers.
The semiconductor solutions provided by Inphi Corporation solves the problem of bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing environments, and enable the roll out of communications and datacenter infrastructures.
Inphi Corporation products help in amplifying encoding, multiplexing, demultiplexing, and retiming signals at speeds up to 400 Gbps and also provides 25G to 600G high-speed analog and mixed semiconductor solutions for the communications market. Customers who are original equipment manufacturers buy products directly or through a network of sales representatives and distributors.
In its bid to expand, the company in partnership with Synopsis acquired eSillicon, a fabless semiconductor company founded in 2000. The acquisition expanded Inphi’s capacity for 2.5D packaging, SerDes and Custom Silicon design products. In early March, Inphi unveiled its new Spica 800G 7nm PAM4 DSP which is the world’s first 8x100Gbps PAM4 DSP for megascale data centers and AI networks.
Yesterday, the company announced the pricing of $440.0 million aggregate principal amount of 0.75% convertible senior notes due 2025,The sale of the notes which is scheduled to end on 24 April if customary closing conditions are satisfied. Is estimated to rake in net proceeds of $428.2 million.
IPHI currently has a market cap of 5.62 billion; Its average 12-month stock price target stands at $120.04 with a high forecast of $140.00 and a low forecast of $90.00. Market sentiment for the stock is currently at strong buy which indicates this may be a good time to keep an eye on this stock.
MACOM Technology Solutions Holdings, Inc. (NASDAQ: MTSI)
Market Cap: $2.49 billion
MACOM Technology Solutions Holdings, Inc. (NASDAQ: MTSI) is another technology company based in the United States. It specializes in semiconductor devices and components and was the largest private employer in the United States in 2005.
It currently has design centers and sales offices in North America, Europe, Asia, and Australia. Products include semiconductor technologies for optical, wireless, and satellite networks with a portfolio of analog RF, microwave, millimeter-wave, and photonic semiconductor products.
Its clients include consumer electronics companies but its products are mainly used in commercial and industrial applications. This application covers key industries such as aerospace and defense as well as climate monitoring, satellite applications, data centers, long-haul communications, metro core networks, 5G, and fiber-to-the-X/PON and industrial and defense, including military and commercial radar and sells its products directly through sales force, applications engineering staff, independent sales representatives, resellers, and distributors.
With its impact in the industry, MACOM bagged a Technology & Engineering Emmy Award for its development of technology that enables high density video switching and routing solutions in 2015.
Like Inphi, MACOM announced a new technology, a dual channel 96 Gbaud transimpedance amplifier (TIA) and quad-channel modulator driver for 600Gbps and 800Gbps Optical Networking Applications early this month. It has also concluded plans to announce the financial results for its second quarter fiscal year 2020 ended April 3, 2020 after the close of market on Wednesday, April 29, 2020 through a conference call as gatherings are not encouraged at the moment.
MTSI now has a market cap of $2.49 billion and according to analysts’ projection, its average 12-month stock price target is $34.20. It is also projected to have a high of $38.00 and a low of $29.00.
These five stocks hold a solid potential among stocks of 5G companies. It is worth pointing out, that you can easily buy Verizon stock (NYSE: VZ) via the Revolut app. The app also supports fractional shares buying, which means you can buy any stocks for as little as $1. To see the step by step guide on how to buy stocks with Revolut – press here.
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FAQ About 5G Network
What is 5G?
5G is the new 5th generation of wireless communications technologies supporting cellular data networks. It is the latest and most advanced of the networks in existence such as 1G 2G, 3G and 4G. 5G requires devices that support the technology to function and is already available for use in a good number of countries in the world. It exists in millimeter waves, mid-band, and low-band, but the mid-band is the most widely deployed in over 30 networks.
How does 5G differ from 3G and 4G?
5G is a much faster network, about 100 times faster than 4G and much faster than 3G. Its speed goes as high as 100 gigabits per second. It also has lower latency i.e it takes much less time to load files and websites. Because of the short millimeter waves, it allows many more devices to be connected at the same time.
Does 5G raise any health concerns?
Yes, there are health concerns raised by researchers and the general society on the dangers that technology poses to human health. It has also been blamed for the COVID-19 pandemic that is currently ravaging the world. However, experts in the field of communication technology say these concerns are unfounded. They say that unlike sun rays and X-rays, 5G radiation is non-ionizing and so does not have the capacity to cause any real damage to health.
Will 5G use current 4Gs antennas or the new infrastructure will be built?
5G requires new infrastructure mainly because of the differences between the 4G or 3G networks. Because of the shorter wavelengths and higher frequencies, antennas can be much smaller than 4G antennas. Since there are not many of such antennas that support such high-frequency transmission, many more will have to be built for the technology to be fully deployed.