The 5G rollout is in full swing, and several telecom stocks are ascending to new highs. The pressing question is which specific stocks are best suited for the 5G transition.
Don’t invest your limited time studying the nuances of each telecom stock in an attempt to pinpoint those most likely to benefit from the move to 5G. Instead, let us do the work for you.
Below, we highlight four “Buy Rated” 5G stocks to scoop up before the new year starts: NVIDIA (NVDA), Broadcom (AVGO), T-Mobile (TMUS) and Crown Castle International Corporation (CCI).
NVIDIA Corporation (NVDA)
NVDA will benefit from the shift to 5G in that its graphics card power data centers, computers and 5G networks. In short, device and networks poised to benefit from 5G technology should push NVDA to new heights. NVDA has teamed up with Ericsson to improve the efficiency of 5G networks. This corporate partnership will seal gaps in network infrastructures where carriers could not use bandwidth. The company’s GPUs enhance network intelligence, helping telecoms use virtual radio access networks that operate on virtual machines. The use of a virtual machine empowers telecom operators to transfer bandwidth to new locations reducing both capital and operating costs.
Add in the fact that 5G will hike the need for comparably small data centers to minimize latency and hasten processing times and the need for GPUs will rise even more. Check out the NVDA POWR Ratings and you will find the stock has "B" grades in the Industry Rank, Buy & Hold and Trade Grade components. NVDA is ranked 15th of 86 stocks in the Semiconductor and Wireless Chip category.
Out of the 31 analysts to have studied the stock, 26 recommend it as a Buy, four recommend it as a Hold and only one recommends selling. Look for NVDA to climb toward $600 as the year rounds out.
Broadcom (AVGO)
AVGO, a semiconductor business that operates across the world, is a chipmaker poised to benefit form the shift to 5G. AVGO’s chip business facilities the use of 5G with smartphones. Analysts anticipate AVGO profits will spike 13% across the upcoming fiscal year. AVGO provides an attractive dividend of 3.42%.
If you are still on the fence as to whether AVGO is worthy of your investing dollars, consider the fact that the stock has an "A" Trade Grade and "B" grades in the Industry Rank, Peer Grade and Buy & Hold Grade categories. AVGO is ranked in the top 20 of nearly 90 Semiconductor & Wireless Chip stocks.
The top analysts are bullish on AVGO, setting an average price target of $409.14, meaning the stock is likely to pop by nearly 7%. AVGO has a fairly low forward P/E ratio of 15, indicating the stock is likely undervalued at $389 per share.
T-Mobile (TMUS)
If President Biden prevents Trump’s plan for a 5G network backed by the Pentagon from being implemented, TMUS could benefit. TMUS has the latitude necessary to provide 5G coverage in absence of a federal government-backed network. TMUS is a growth stock with fantastic POWR Ratings highlighted by "B" grades in the Peer Grade, Industry Rank, Buy & Hold Grade and Trade Grade components.
TMUS is ranked third of 25 stocks in the Telecom - Domestic space. The analysts have set an average price target of $143.50 for the stock, meaning it is likely to increase by 15%. Out of the 14 analysts to have analyzed TMUS, 13 recommend buying, one recommends holding and none advise selling.
Crown Castle International Corporation (CCI)
5G technology is dependent on towers to broadcast signals. CCI is a REIT that specializes in this space. CCI owns and operates real estate including cell signal tower sites that ensure mobile networks function with efficiency. Furthermore, CCI provides fiber optic networks that connect 5G cell sites to the overarching internet. The booming data flow driven by data-intensive cloud/video will help CCI all the more.
CCI has "B" grades in the Peer Grade and Buy & Hold Grade POWR Rating components along with a top five ranking out of 44 Real Estate Services stocks. Scoop up this stock, hold it through the 5G boom and you should make a tidy sum of money.
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NVDA shares fell $2.23 (-0.41%) in premarket trading Tuesday. Year-to-date, NVDA has gained 128.95%, versus a 11.33% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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