How to Invest in 5G

Cell phones are a necessity in our daily lives. No single individual can function and survive without having their phones nearby. In the same manner, a phone without a proper internet connection is deemed useless in today’s world. This fact can be justified by the amount of data and networking channels that have increased over time.

Mobile communication has evolved to a great length since it came into being. From 1G to 4G mobile communication has seen many phases. Now, the telecom world is going through the recent innovation of 5G technology that has stirred millions and billions of investors to make their investment in this latest technology.

If you have been driven by the new 5G technology and want to discover ways to invest in 5G stocks or own shares of companies, this article will help you discover the top ways and the top companies that are pioneering the new telecommunications network technology. So, let’s find out!

What is 5G Technology?

Released in 2018, 5G is the fifth iteration of the mobile or wireless network that is yet to be fully adopted by the modern era. Currently, the world is using the 4rth generation (4G) technology connected to their devices and mobiles. However, many companies have started rolling out this new innovation that is likely to gain mass adoption until 2025.

5G contains some exciting benefits for the customers of the wireless network. The main aspect of an internet connection is its speed and 5G tends to compete with a wired internet connection in terms of speed making it a more legitimate networking option. No download any movie within seconds.

Unlike the 4rth generation which can handle up to 0.3 gigabits of data per second, 5G is supposed to handle up to 10 gigabits of data per second. It means you can now download a two-hour movie within 5 seconds. In terms of speed, the fifth-generation technology has proved to be a useful development for the telecommunication sector.

Why Should You Invest in 5G?

Regardless of its high speed, low power consumption, and lower latencies which is the delay between data requested and received, what other sectors have seen its benefits? In wireless networking, 5G is the latest addition that tends to yield amazing results and benefits for both investors and users.

Fixed Wireless Access

Unlike wired broadband present in many markets, the new 5G technology can deliver faster speeds. For instance, it can provide more than 100 Mbps to homes.

Enhanced Mobile Broadband

The use of mobile devices in developed countries is 76%. Whereas the emerging countries have 45% smartphone usage. With time, this value continues to increase. The rise of smartphones and smart applications has enhanced the effectiveness and rate of work and processes at a  significant level. As a result, the world and the economy are observing great achievements.

This is only possible with fast, efficient, and reliable internet connections that have improved online employment and businesses as well. However, the current era demands more improvised wireless connections that can meet the requirements of today. For instance,  VR, AR, ultra-high-definition video, and other advanced technologies. 5G aims to present solutions for the modern world with its fast, efficient, and competitive technology.

Mission-Critical Application 

The time and mission-critical applications such as vehicle safety systems, healthcare devices, and smart tools utilized within the construction department require great functioning, high speed, and reliability of a wireless internet connection since these devices and applications are meant to serve humanity and human well-being. As a result, it needs a stable connection that has the capability of yielding high speed. The new 5G connection might help resolve the issues faced by the mission-critical devices.

Internet of Things (IoT) 

With the ultimate rise of the number of mobile devices and smart applications, it has become difficult for existing networks to keep pace. This is why the internet of things IoT has welcomed many emerging applications that require improved wireless connections. Those which can offer better results than the previous. 

Examples include virtual workplaces, digital hotels, autonomous vehicles, smart homes. Such applications can only show their true potential with the help of improved connections that 5G aims to offer. Moreover, the internet connection can offer low power consumption which further helps customers get the best experience with 5G.

Top 5G Semiconductor (Computer Chip) Companies

The semiconductor companies set the main foundation for 5G. These companies utilize electronics and technologies that are responsible to process data and execute commands within a computing system. In other words, they produce chips that are necessary for 5G to function. If you wish to invest in the top chip companies, consider the following list:

Broadcom

Known as a diversified inventor of electronic components and chips for phones and networking hardware, Broadcom (NASDAQ:AVGO) has a market capitalization worth $274 billion. This makes Broadcom the top name in the chip-producing companies for 5G. The mobile network ecosystem is filled with its  circuitry designs that offer the following outcomes:

  • It presents a networking infrastructure that is the fuel and foundation of the internet. 
  • It also produces parts that help in connecting mobile phones and devices with a wireless signal.
  • It helps create wireless signals that facilitate the internet. 

Qualcomm

Another great name in the chip-producing industry is Qualcomm which contains numerous products that help 5G to function. The company facilitates the Internet of Things (IoT) devices and industrial equipment, cars, smartphones, and even modems.

Qualcomm understands the need for modern and improvised wireless technologies that have become the need of today’s time, application, and devices. The company has $209 billion worth of market capitalization. Today, the majority of mobile devices have Qualcomm hardware.

Skyworks Solutions

With a $26.4 billion market capitalization, Skyworks Solutions are the leading radio frequency chip designers that enable smartphones and other devices to receive a mobile signal. This way, mobile phones are connected to the mobile network and the latest 5G technology has increased the standards and gains for the company.

Skyworks Solutions have boosted their performances and wish to include smart home devices, virtual reality, medical devices, and connected industrial equipment that will be facilitated by 5G. With its recent purchase of Silicon Labs’ (NASDAQ:SLAB) automotive and network infrastructure segment in 2021, it has strengthened its potential to a great extent.

Advanced Micro Devices

Advanced Micro Devices (NASDAQ:AMD) is among the top chip companies with a market capitalization of $181 billion. Currently, it is making efforts to enter the new 5G market. Its acquisition of Xilinx (NASDAQ:XLNX) which is known as the field-programmable gate array (FPGA) chips industry has strengthened its plan to invent hardware and equipment for the deployment of 5G.

Nvidia

Nvidia (NASDAQ:NVDA) is the king of the graphics processing unit (GPU) with a $753 billion market capitalization. The company aims to beat traditional games by producing high-end video games with the help of GPU and 5G. A lot of applications can be facilitated with GPU including self-driving cars, augmented reality, or 5G. 5G can help GPU applications with their high traffic handling, fast downloading speed, and intelligently routed network signals. Several telecommunication companies and equipment-producing industries are using GPU and if 5G shows its full potential, Nividia can succeed in producing cloud-based video games that will be streamed over networks. 

Best 5G Real Estate Investments

5G and real estate assets are dependent on each other. For instance, towers are required to broadcast 5G signals. American Tower, Crown Castle, and Digital Realty Trust are the top names in the real estate investment sector. 

American Tower

American Tower is a top real estate company and one of the best and largest REITs with a market capitalization of $130 billion. It primarily focuses on real estate properties that include buildings, lands, cell tower sites since it is beneficial for not only improving the internet infrastructure, it also helps in facilitating mobile networks.

The company owns a total of 220,000 properties globally. As more businesses and consumers rely on mobile services for their internet consumption, the company also produces fiber-optic networks that are responsible for connecting 5G small cell sites to the rest of the internet.

Crown Castle

Crown Castle leads the North American communications infrastructure property manager with a total market capitalization of $89.7 billion. It has a growing number of 5G small cell tower deployments throughout North America.

40,000 cell towers, a fast-growing portfolio of small cell nodes for 5G deployment, and tens of thousands of miles of fiber are among its various achievements. If you want to invest in this industry, Crown Castle is likely to offer growth possibilities for the shareholders.

Digital Realty Trust

With $49.7 billion worth of market capitalization, Digital Realty Trust is a top data center developer and acquirer. The company has been able to attract a group of mobile network clients that use its services to manage 5G. The client of the Digital Realty industry plans to make 5G enabled globally by creating physical assets.

Best 5G Equipment and Infrastructure Stocks

Industries that produce general equipment can provide companies with hardware that makes 5G reach consumers and businesses. In such a case, investors can also consider the equipment and infrastructure companies since it also helps in deploying 5G connections as the chip makers do. 

Corning

Corning is originally a glass and ceramics firm that is refocused on 5G-related technology including 5G equipment and radio transmitters. It has a market capitalization of $31.7 billion. Corning is a major supplier of fiber-optic cable. It also produces small cell antennas and accompanying software used in office buildings and venues such as sports arenas that helps facilitate wireless signals. 

Ciena

With a $12.0 billion worth of market capitalization, Ciena is a network software provider and fiber-optic equipment supplier that supports the telecom industry. The expansion of 5G technology has allowed the company to increase its cash reserves, pay down debt, and repurchase stock. 

The company can efficiently produce the materials and engineering design needed for deploying next-generation 5G technology. This fact can be justified by how well it has survived the covid phase where the majority of the industries observed a downfall. 

Arista Networks

Arista Network is a top data center equipment, internet infrastructure, and management software company with $43.7 billion worth of market capitalization. The company is the top data center and has successfully facilitated ultra-high-definition video streaming or communications for network-connected vehicles. Arista Networks can yield the top open-source hardware management and cybersecurity tools that are the important products of a data center company.

What are the Risks Associated with 5G

It would be not wrong if we say all investments are subject to risk. Every kind of investment has its drawbacks and we can not fully ignore them. Similarly investing in 5G is also challenging since it has some risks attached.

Although it is still too early to talk about its risks since a huge portion of the world has not seen it, we must be aware and cautious of the disadvantages and consequences that might come with it. 

Survival Issues

The main issue with any technology revolves around its ability to survive. This poses a challenge for the customers who invest plenty of their funds in them. We can not suggest if technology fails or gets replaced unless it is not adopted and consumed by the masses. However, if you still are concerned, let us assure you that the new 5G technology has already been adopted by many governments and states and the likelihood of it getting replaced is low. 

Security 

5G can be insecure and this can be proved by a paper entitled A Formal Analysis of 5G Authentication highlights which talks about the immaturity of the 5G technology that tends to result in some risks. 

Slower Gains 

Industries that belong to the 5G technology might observe success and loss consecutively. For instance, computer chip and semiconductor construction companies. As a result, investors might gain profit after holding the investments for a longer period.

Health Risks

Although the complete and authentic evidence is still absent that might prove its negative effects, the new 5G might cause several health-related issues as a result of intensified radiations caused due to them. 

Mass Surveillance

Data can become a great victim of the risks attached with 5G. On the other hand, the disadvantages also include mass surveillance by governments that might cause negative effects.

Any top-notch technology is paired with its risks and benefits. It’s important to make awareness regarding them beforehand so that people can decide for themselves. Although these risks are unavoidable, if we go through detailed research and work on producing better solutions, we can at least mitigate their impacts.

Frequently Asked Questions

What is 5G?

For digital cellular networks, 5G is known as the fifth-generation wireless technology. Currently, it is considered the future of mobile technology. This innovation tends to pose challenges and competitions for numerous industries making it a game-changer. 

What industries will be influenced by 5G?

There is a list of industries that will be greatly affected by this new technology. To name a few, there are mobile payments, industrial IoT, healthcare, and agricultural industries. 

Is it too late to be investing in 5G?

No. It’s not. Although this new technology is currently available in a few areas, there is a major portion of the world that has not yet adopted and deployed 5G yet. Its deployment was initiated in 2019 and still many mobile phone operators have not been able to enable 5G. So if you have not yet invested in 5G, get started now.

Which industries are worth looking into for 5G investing?

Industries like service providers, hardware (chipmakers), satellite production, real estate investment trusts, and consumer tech can offer great investment opportunities. 

Is there any risk associated with 5G?

The industrial experts suggest that there can be 3 main risks associated with 5G which includes the following:

  • Security concerns are common since some say they hint at the immaturity of the 5G technology.
  • The radiation emitted as a result of this new technology can seriously threaten people’s health. 
  • Mass surveillance and data breach can be a result of the 5G technology.

Is there any easiest way to invest in 5G?

Thematic ETFs are considered the most convenient options for people who want to invest in 5G. This sector is responsible for tracking the performance of enterprises that are involved in the research and development of the new 5G technology and some emerging next-generation technologies as well.

Considering the time since it has emerged and the rate at which mobile companies have enabled it, 5G has still a long way to go. This makes investing in 5G a challenging and risky task because we have not been fully aware of how well this technology is working. We need a lot more examples to justify its benefits.

However, if you wish to invest in 5G, there is no better option than the ETF (exchange-traded fund) or share basket. These products help you get an insight into the kinds of stocks that belong to the 5G technology. Not only this, several other options might help you to invest in 5G. We hope our list of investment options has helped you discover them.