Artificial intelligence has attracted significant attention, but another technological advancement also deserves investors’ consideration: thanks to the expanding availability and affordability of 5G networks, 5G technologies are in high demand in 2024.
The size of the 5G services market is expected to grow from $98.3 billion in 2023 to more than $427.7 billion by 2028. That equates to forecast compounding annual growth rates above 34% in that period. Those strong figures underpin the need to consider 5G stocks to watch.
According to Ericsson, Global 5G subscriptions are anticipated to experience a substantial expansion, increasing by over 330% from 1.6 billion to 5.3 billion between 2023 and 2029.
By 2029, more than 5 billion people will be using (and paying for) 5G network access, representing about 85% of the global population.
Overview of 5G Technology
5G is the fifth generation of networks, offering ultra-fast speeds and low latency, or the time it takes for data to travel between devices. This makes 5G ideal for applications such as virtual reality, augmented reality, and autonomous vehicles. The 5G opportunity reaches deep across the technology sector, creating hardware, software, chips, and more opportunities.
It isn’t simply about mobile networks by any means. That means there are a lot of stock opportunities that touch on 5G that some might not expect. Those hidden opportunities and the massive growth anticipated in 5G create exciting opportunities.
Investors should consider the potential of 5G technologies, as the wider availability and affordability of 5G networks drive demand for 5G-enabled devices and services.
Let’s learn more about 5G stocks that leverage those opportunities.
Top 5G Stocks to Watch for Long-Term Investment
Given the escalating surge in 5G technology, investors are actively exploring opportunities within the 5G sector.
Here are five rising 5G stocks that pay decent-to-excellent dividends.
Verizon Communications Inc. (VZ)
Verizon Communications (VZ) stock closed at $41.21 on Friday, August 23, 2024, up from $40.88 the previous day. This represents a 0.83% increase. Over the past month, VZ has risen 3.88%, and over the past year, it has gained 24.16%.
Meanwhile, Verizon collaborates with Amazon Web Services and IBM to develop 5G applications for automation, cloud gaming, and drone technologies. According to market predictions, Verizon will have a compelling growth opportunity in the upcoming years.
T-Mobile US Inc. (TMUS)
T-Mobile US, a premier provider of wireless communication services, presents a compelling investment opportunity in the rapidly evolving 5G landscape.
T-Mobile’s 2nd quarter revenue report reveals substantial financial success. Service revenues reached $16.4 billion, up 4% year over year. Postpaid service revenues hit $12.9 billion, a 7% increase.
Net income climbed to $2.9 billion, a 32% jump, solidifying its top industry position.
Additionally, the company’s share buyback program has effectively enhanced shareholder value by reducing the number of outstanding shares.
As the demand for high-speed, reliable connectivity rises, T-Mobile’s robust network infrastructure and innovative service offerings position it as a leading contender in the 5G market. The company’s strong financial performance and commitment to shareholder returns make it a compelling investment choice for those seeking to participate in the 5G revolution.
Rogers Communications (RCI)
Rogers Communications (NYSE: RCI) is a Canadian communications company with a strong presence in the wireless, cable, and voice markets. Despite being less well-known in the U.S. stock market, Rogers Communications offers significant growth potential.
The company has demonstrated impressive financial performance, with total service revenue growth of 10-12% and adjusted EBITDA growth of 12% to 15% in 2024, generating capital expenditures of $3.8 billion to $4.0 billion. This growth is driven by a combination of factors, including strong demand for its services and strategic investments in network infrastructure.
Given its strong fundamentals, attractive valuation, and significant growth potential, Rogers Communications’ shares are rated a “buy” with the potential to double or more over the next 12 to 18 months.
Cisco Systems (CSCO)
Cisco Systems (NASDAQ: CSCO) is a leading provider of enterprise 5G solutions, offering private 5G networks across various industries. The company has built a strong reputation for its reliable and high-performance hardware.
Beyond the 5G opportunity, Cisco Systems offers several compelling reasons for investors to consider. The company is well-known as one of the most reliable tech dividend stocks, with a current yield of 3.3%. While dividend yields of 3% are not uncommon, this is relatively high in the tech sector.
Cisco Systems is actively transforming its business model towards recurring software revenues, which offers greater predictability and stability compared to the cyclical nature of the hardware industry. This transition also results in improved margins. Additionally, Cisco Systems is well-positioned to benefit from the growth of data center AI through its switching business.
Overall, Cisco Systems presents a compelling investment opportunity, combining its leadership in enterprise 5G, reliable dividend income, and strategic shift towards recurring software revenues.
Nvidia Corp. (NVDA)
Nvidia is popular for its graphics processing units or GPUs. It is a leading AI chip-making company expanding into 5G through its AI-on-5G platform, a service that simplifies the deployment of AI applications over 5G networks.
Nvidia’s 1st quarter revenue report declared that its total revenue reached $26.0 billion, up 18% sequentially and a staggering 262% whooping percent from the previous year. Data Center revenue reaching $22.6 billion represents a 23% increase from the prior quarter and a remarkable 427% growth compared to last year. NVIDIA also announced a substantial increase in its quarterly cash dividend, which has been raised by 150% to $0.01/share post-split.
Nvidia’s foray into 5G is expected to be a notable source of revenue growth in the future, but investors may have to be patient.
Final Thoughts
The rollout of 5G technology represents a transformative shift in the telecommunications industry, with far-reaching implications for various sectors. Investing in 5G stocks offers the potential for significant long-term gains.
By focusing on market leadership, innovation, financial stability, and global reach, investors can make informed decisions and potentially reap the rewards of the 5G revolution. These 5G stocks could be a valuable addition to your investment portfolio.
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