If you have a smartphone right now, chances are it’s running on 4G. But not for long…
We’re going to show you the profit opportunities in by taking a look at the companies that make 5G chips today.
That’s because 5G contains many subsectors.
Apple Inc. (NASDAQ: AAPL) announced on June 9 that it would begin production of 5G Apple iPhone models starting next month. Meanwhile, telecom companies are building out their 5G networks across the world.
But an important sector of the 5G market that people often miss is 5G semiconductor stocks. Once we get through our top five companies that make 5G chips, we’ll show you how to take advantage of a $17.14 billion opportunity in 5G stocks…
No. 1: Qualcomm Inc.
Qualcomm Inc. (NASDAQ: QCOM) is a San Diego-based chipmaker with specialties all across the tech field. It makes different kinds of wireless software too. This company has made chips for Apple iPhones in the past. A legal battle over patents kept Apple from using Qualcomm’s chips in their 2019 line. But now that they’ve settled, it looks like the latest 5G iPhone will be powered by Qualcomm’s 5G chip. Shares of QCOM go for $84 right now. But analysts think it could reach $110 in 12 months. A nice 29% gain.
No. 2: Broadcom Inc.
Broadcom Inc. (NASDAQ: AVGO) also has a strong relationship with Apple. In fact, 20% of its revenue in 2019 was from Apple. They currently have an agreement to supply $15 billion of wireless parts for the products Apple will be releasing over the next three and a half years. Its other products cover data center, networking, software, broadband and storage services. The stock currently trades for $293. The high 12-month target is $372. That’s a potential gain of 26%. The company also pays a nice 4.4% dividend.
No. 3: Xilinx Inc.
Xilinx Inc. (NASDAQ: XLNX) focuses on processing platforms across many industries. They power technologies like data centers, artificial intelligence, machine learning, aerospace, and defense. The company is currently providing a platform for Samsung to deploy its 5G solutions. The platform is called ACAP, or “acceleration platform,” designed to “accelerate 5G commercial deployments.” This makes Xilinx a major player in the 5G market. You can buy shares for $89 today. They could hit $115 by the end of the year. That’s a 29% jump.
No. 4: Skyworks Solutions Inc.
Skyworks Solutions Inc. (NASDAQ: SWKS) specializes in chips for radio frequency and mobile communications. And believe it or not, it’s another Apple supplier. Apple contributed 51% of this company’s revenue in 2020. This company’s revenue took a hit after Chinese company Huawei was blacklisted by the United States. But it has made up for that by selling more chips through in the Internet of Things (IoT) market, another key 5G sector. You can buy shares of SWKS for $123 today. Analysts put it at $165 in 12 months. That’s a 34% gain.
No. 5: Intel Corp.
Intel Corp. (NASDAQ: INTC) is another California chip company. You’ve probably seen its sticker on laptops before. It supplies Apple, Lenovo, HP, and Dell. More than just semiconductors, this company manufactures essential computer “guts” like network interface controllers, integrated circuits, and embedded processors. Intel put together an “Open Innovation Lab” with NASA and T-Mobile this year. They are going to explore new 5G use cases involving AI and Internet of Things. You can buy shares of INTC for $59 right now. The 12-month target is a nice 44% gain at $85.
Of course, all of these stocks are great to hold in the advent of 5G. But there are even more opportunities in here.
This is one of the best 5G stocks to buy outside of the chip sector…
The $17.14 Billion Trend Moving 5G Stocks
The U.S. telemedicine market was worth about $6.6 billion in 2019. Medgadget estimates it could reach $17.4 billion by 2026.
That’s 163% growth in just six years. So you’ll want to get in on this market before it’s too late.
The growth can be easily explained by the “work from home” push during the COVID-19 pandemic. Because there’s no clear idea of when things will reopen or when a vaccine will arrive, work-from-home stocks will continue to explode.
Zoom Video Communications Inc. (NASDAQ: ZM) already has rocketed 236% since the start of the year. But telehealth has a much more specific set of requirements…
With telemedicine, there are more legal and data management hurdles to facilitating a doctor-patient relationship. They need a zero-latency, secure solution that will allow communication to work properly and swiftly.
That’s where Teladoc Health Inc. (NASDAQ: TDOC) comes in. Money Morning’s Bill Patalon calls it the “Zoom of Healthcare.”
The company specializes in telehealth solutions that manage relationships between doctors, patients, pharmacists and record keepers. 5G speeds will enable Teladoc to make that happen seamlessly.
— Mike Stenger
Source: Money Morning