Editor’s note: This article is regularly updated with the latest information.
Fifth generation (5G) wireless technology is exploding in terms of adoption and growth around the world. According to market research firm Precedence Research, the global 5G market is forecast to reach $1.87 trillion by 2030 for a compound annual growth rate (CAGR) of 44.63% between 2022 and the start of the next decade. Because of this rampant growth, I have selected four of the best 5G stocks to buy now.
5G is expected to not only make internet and communication speeds exponentially faster, but also to advance cutting-edge technologies that hold enough promise to transform our world — from artificial intelligence (AI) and cloud computing to self-driving vehicles. With so much potential and money to be made, it should come as no surprise that companies large and small are pushing into the 5G space. However, there are a handful that have an edge on the competition, leading the charge into 5G.
Here are four of the best 5G stocks investors can buy now:
Best 5G Stocks to Buy: Qualcomm (QCOM)
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Based in California, Qualcomm (NASDAQ:QCOM) is a leader in the 5G sector, owning several critically important patents related to the tech and manufacturing many of the semiconductors that enable 5G wireless on smartphones and other devices.
Qualcomm had a banner year in 2021 as demand for 5G accelerated around the world. The company’s revenue increased 55% to $33.5 billion last year. Its chipmaking and licensing revenues climbed 64% and 26%, respectively. Earnings per share (EPS) also soared 104% on an annualized basis. Plus, Qualcomm is working hard to diversify its business, expanding into Internet of Things (IoT) technologies as well as the automotive sector.
Despite its success, however, QCOM stock is down about 30% so far this year as investors broadly sell off technology securities — and especially shares of fast-growing semiconductor companies. However, QCOM also looks comparatively cheap at 9.85 times forward earnings. The company also pays a quarterly dividend that yields 2.33%. Strong 5G demand plus a low valuation and decent dividend should be enough to attract investors to shares. The median price target among analysts is currently $180, suggesting 40% upside from current levels.
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Next up on this list of best 5G stocks to buy, Verizon (NYSE:VZ) is a leading telecommunications company that is also heavily involved in the rollout of 5G wireless. VZ stock has also managed to outperform the market this year, down 20% year-to-date (YTD) compared to a 24% decline for the Nasdaq. The outperformance of VZ stock is largely due to the fact it pays a quarterly dividend yielding 6.12%. The company has raised its dividend for 18 consecutive years and proven to be a reliable payout for shareholders, making VZ a solid defensive stock during turbulent times.
Since the smartphone market in the U.S. is saturated, Verizon’s revenue growth has averaged only about 2% over the past 10 years. However, VZ stock looks dirt cheap at current valuations. The company’s price-earnings (P/E) ratio sits at 7.76, down about 30% from its five-year average. At around $41 per share as of this writing, the stock is affordable for most retail investors, too. And, like Qualcomm, Verizon seeks to grow its earnings and boost shares through diversification, pushing into IoT technologies and automotive connectivity as vehicles become more autonomous. The median price target on VZ stock is $50, suggesting 21% upside.
Best 5G Stocks to Buy: American Tower (AMT)
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American Tower (NYSE:AMT) is a real estate investment trust (REIT) that operates the wireless communications infrastructure on which 5G networks rely. The company is essential to the growth of 5G wireless with more than 200,000 communications sites worldwide. Investors looking to play the 5G rollout should consider taking a position in AMT stock, which is down 10% this year. The median price target on AMT is $300, nearly 15% higher than where shares currently trade.
Like the other stocks on this list, AMT stock pays a decent quarterly dividend of 2.26%. With a forward P/E ratio of 50, AMT stock is more expensive than the other names listed here. However, it still offers a great way for investors to get exposure to the fast-growing 5G sector. Plus, American Tower’s business in Europe continues to grow at a strong clip thanks to partnerships with governments of countries like Germany, Spain and Frances. Long-term, American Tower shares should continue to grow amid the rollout of 5G services.
Marvell Technologies (MRVL)
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Down almost 45% YTD, Marvell Technologies (NASDAQ:MRVL) is another semiconductor company whose shares have been knocked lower in the current bear market. However, the company’s technology is an essential component of the high-speed 5G connectivity used across computing, networking, data storage and smartphones. In fact, it’s especially important for 5G wireless infrastructure and networks. As such, MRVL stock is a great option for investors seeking out 5G wireless plays. Plus, the company also develops technologies widely used in artificial intelligence (AI), drones and cloud computing.
At less than $50 per share, analysts see plenty of upside potential with MRVL stock. The median price target is currently $72, which is nearly 50% higher than where the shares currently trade. What’s more, the low estimate on Marvell is $58, still 20% higher than current levels.
Unfortunately, Marvell Technologies does pay a dividend that only yields 0.5%. However, investors can still make up for the small dividend through the company’s explosive growth over coming years as 5G wireless expands globally. The decline in MRVL stock this year represents a great opportunity for investors to buy the dip.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.