While artificial intelligence (AI) has been dominating headlines, another technological advancement is quietly gaining momentum and warrants investors' attention: 5G technology. Representing the next generation of mobile internet, 5G is poised to replace 4G, offering ultra-fast speeds and significantly lower latency, enhancing communication time between devices.
Ericsson, a telecommunications company, stated in its mobility report that by 2028, 5G will emerge as the primary mobile access technology by subscription. Globally, 5G subscriptions are expected to surpass 5.3 billion in 2029, constituting 58% of all mobile subscriptions at that point. Further projections indicate that by 2029, North America and the GCC will boast the highest 5G penetration at 92%, followed closely by Western Europe at 85%.
Of course, while the penetration of 5G connectivity is expected to open up new growth opportunities in both hardware and software sectors, a 2020 report by Edward Jones highlighted that the full realization of 5G may take considerable time due to the complexity of its technical infrastructure requirements. The report emphasized that the deployment of 5G would not reach completion levels until software developers conduct extensive testing and exploration to determine the most effective utilization of the high speeds and responsiveness unlocked by 5G technology. Consumer sentiment echoes this observation, with many 5G smartphone users indicating that their devices have yet to fully leverage the capabilities of the technology. Deloitte's research reveals that a significant majority (53%) of 5G smartphone users are actively looking for applications and experiences that can harness the advanced capabilities of the network. Additionally, a notable 26% expressed dissatisfaction with the absence of innovative apps and services specifically designed for the 5G environment.
However, investors should take note that despite the short-term headwinds in the 5G sector, such as those experienced by Nokia this past year, the economic benefits of the 5G revolution are expected to be far and wide. Grand View Research projects that the 5G services market will experience a compound annual growth rate (CAGR) of 59.4% from 2023 to 2030. This growth trajectory is anticipated to be driven b y the convergence of other sub-sectors of technology, including artificial intelligence, the Internet of Things (IoT), and high-speed data connectivity, which collectively will catalyze market expansion.
Investors looking to capitalize on the potential of 5G should adopt a diversified strategy by investing in various sectors of the 5G ecosystem. This includes companies involved in providing 5G network equipment, tower infrastructure, semiconductors, hyperscalers, and mobile network operators. In that regard, some of the best 5G stocks to buy include the likes of Advanced Micro Devices, Inc. (NASDAQ:AMD), NVIDIA Corporation (NASDAQ:NVDA), and Amazon.com, Inc. (NASDAQ:AMZN).
In this article, we've curated a list of the top 5G stocks based on hedge fund sentiment. While most of these stocks are primarily focused on 5G technology, some also include cloud service providers, holding companies with subsidiaries in the 5G sector, and semiconductor firms supporting 5G ecosystems. Our analysis is derived from Insider Monkey’s database of 933 elite hedge funds tracked as of the fourth quarter of 2023. The list is organized in ascending order based on the number of hedge fund holders in each company. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Crown Castle Inc. (NYSE:CCI) is a notable presence in the real estate investment trust (REIT) sector, particularly within the 5G landscape, with an extensive portfolio boasting over 40,000 cell towers.
On February 21, analysts at RBC Capital maintained a Sector Perform rating and a $109 price target on Crown Castle Inc. (NYSE:CCI).
As of the end of Q4 2023, 45 hedge funds maintained stakes in Crown Castle Inc. (NYSE:CCI), consistent with the previous quarter, according to Insider Monkey’s database. These stakes collectively amount to nearly $1.6 billion.
Much like Advanced Micro Devices, Inc. (NASDAQ:AMD), NVIDIA Corporation (NASDAQ:NVDA), and Amazon.com, Inc. (NASDAQ:AMZN), Crown Castle Inc. (NYSE:CCI) ranks as one of the best 5G stocks to invest in.
Marvell Technology, Inc. (NASDAQ:MRVL) has established itself as a frontrunner in the development of data processing units (DPUs), which play a crucial role in facilitating the movement of vast amounts of digital information within networking equipment and data centers. In an effort to expand its presence in key sectors such as 5G, cloud computing, and other business solutions, Marvell Technology, Inc. (NASDAQ:MRVL) made significant acquisitions in 2021, including Inphi and Innovium. These acquisitions bolstered Marvell's capabilities in areas such as fiber optics and network switching, complementing its existing DPU technology.
We saw 53 hedge funds long Marvell Technology, Inc. (NASDAQ:MRVL) in the fourth quarter, with a total stake value of $1.8 billion.
American Tower Corporation (NYSE:AMT) is a telecommunications and data center real estate investment trust (REIT) headquartered in Boston, Massachusetts. With approximately 221,000 properties worldwide, the company plays a crucial role in establishing fiber-optic networks that connect 5G small cell sites to the internet.
On February 28, JPMorgan analysts maintained an Overweight rating and a $230 price target on American Tower Corporation (NYSE:AMT).
As of the end of December 2023, 56 out of the 933 hedge funds covered by Insider Monkey’s research held shares of the company. The largest shareholder among these hedge funds is Charles Akre’s Akre Capital Management, owning 6.8 million shares valued at $1.4 billion.
Cisco Systems, Inc. (NASDAQ:CSCO) is a multinational corporation specializing in the design, manufacturing, and distribution of networking and communication products on a global scale. With a diverse product portfolio including switches, routers, wireless devices, and computing solutions, the company caters to various industries. Cisco Systems, Inc. (NASDAQ:CSCO) has also ventured into private 5G services, targeting sectors such as manufacturing, energy, and utilities. Its Meraki cloud wireless solution, featuring models like MG51 and MG51E, offers lower latency, enhanced security, and faster speeds.
According to Insider Monkey's fourth-quarter database, 60 hedge funds expressed bullish sentiments towards Cisco Systems, Inc. (NASDAQ:CSCO), a slight decrease from 64 funds in the previous quarter. AQR Capital Management, under the leadership of Cliff Asness, holds the largest stake in the company, with 12 million shares valued at approximately $615 million.
Headquartered in New York, Verizon Communications Inc. (NYSE:VZ) is an integrated telecommunications services provider offering a wide range of communication, technology, information, and entertainment products and services. Through its operational divisions, the company delivers various services, including 5G and 4G wireless connectivity, high-speed internet, and digital TV across the United States.
In the fourth quarter of the previous year, 63 out of the 933 hedge funds profiled by Insider Monkey had purchased and held shares of Verizon Communications Inc. (NYSE:VZ). Among these hedge funds, Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke, and John Campbell, emerged as the largest investor with a stake valued at $948 million.
Ariel Global Fund stated the following regarding Verizon Communications Inc. (NYSE:VZ) in its fourth quarter 2023 investor letter:
“Global communications and technology leader, Verizon Communications Inc. (NYSE:VZ) also traded higher in the period following solid earnings results, highlighted by postpaid consumer net additions and an upward revision to free cash flow guidance. From a competitive and financial standpoint, we view Verizon to be among one of the best positioned telecoms in the world. The company’s solid long-term fundamentals are underscored by its predictable, recurring revenue streams and ~7% dividend yield. At current levels, Verizon is trading near an all-time low valuation presenting a compelling total return story for patient investors.”
AT&T Inc. (NYSE:T) a global leader of telecommunications and one of the best 5G stocks to invest in, offers a wide array of wireless communication services, device sales, and data solutions to various customer segments, including businesses, government entities, wholesale clients, and residential users.
On February 1, J.P. Morgan upgraded its rating on AT&T Inc. (NYSE:T) citing expectations of sustained and long-term growth, particularly in the wireless and broadband segments. The primary catalyst for this growth is identified as AT&T Inc. (NYSE:T)'s broadband division, driven by its ongoing fiber buildout. Analyst Richard Choe of J.P. Morgan expressed optimism about the additional opportunities this expansion will create within existing markets. Consequently, Choe upgraded the rating on AT&T Inc. (NYSE:T) from Neutral to Overweight and raised the year-end price target to $21 from $18.
As of the end of Q4 2023, 66 hedge funds in Insider Monkey’s database held stakes in AT&T Inc. (NYSE:T), growing from 52 in the previous quarter. The consolidated value of these stakes is nearly $3 billion.
Headquartered in Stamford, Connecticut, Charter Communications, Inc. (NASDAQ:CHTR) is a leading provider of broadband connectivity and cable services, operating under the Spectrum brand. With a presence in 41 states, the company serves over 32 million customers, offering a comprehensive range of residential and business solutions, including Spectrum Internet®, TV, Mobile, and Voice.
According to Insider Monkey's data for Q4 2023, Charter Communications, Inc. (NASDAQ:CHTR) shares were held by 69 out of the 933 hedge funds tracked. The total value of these holdings amounted to $5.3 billion. Harris Associates emerged as the largest shareholder, possessing 5.2 million shares valued at $2.0 billion.
T-Mobile US, Inc. (NYSE:TMUS), headquartered in Bellevue, Washington, is a leading provider of wireless telecommunication services. Renowned for its strides in the 5G domain, the company has established one of the largest and fastest 5G networks in the United States, positioning itself for sustained growth in the upcoming period.
As of March 20, RBC Capital analysts maintain an Outperform rating on T-Mobile US, Inc. (NYSE:TMUS), accompanied by a price target of $184.
According to Insider Monkey's Q4 2023 database, 75 hedge funds reported holdings in T-Mobile US, Inc. (NASDAQ:TMUS), down slightly from 79 in the preceding quarter. The combined value of these holdings exceeds $3.8 billion.
QUALCOMM Incorporated (NASDAQ:QCOM) is a prominent developer and vendor of foundational technologies for the wireless industry, boasting a product portfolio that includes chips enabling 5G technology. The company has capitalized on the smartphone surge since the early 2000s by specializing in the technology behind 3G and 4G mobile networks. However, the advent of 5G is expanding the scope for the mobile chip designer, presenting opportunities in IoT devices and industrial equipment.
On March 4, investment advisory firm Cantor Fitzgerald maintained a Neutral rating on QUALCOMM Incorporated (NASDAQ:QCOM) stock, setting a price target of $150.
The number of hedge funds tracked by Insider Monkey holding stakes in QUALCOMM Incorporated (NASDAQ:QCOM) grew to 78 in Q4 2023, from 67 in the previous quarter. The consolidated value of these stakes is nearly $3 billion. With 3 million shares, Two Sigma Advisors was the company’s leading stakeholder in Q4.
Intel Corporation (NASDAQ:INTC), headquartered in Santa Clara, California, stands as a prominent American multinational corporation and technology company. Renowned for its leadership in semiconductor chip manufacturing based on revenue, Intel has played a pivotal role in advancing the x86 series of instruction sets, widely utilized in personal computers. Recently, Intel Corporation (NASDAQ:INTC) announced two significant updates aimed at enhancing footprint, power efficiency, and total cost of ownership (TCO) savings across 5G core networks: the preview of its Intel Xeon next-gen processors, code-named Sierra Forest, and the commercial availability of the Intel Infrastructure Power Manager (IPM) software for 5G core.
According to Insider Monkey's fourth-quarter database, 86 hedge funds held long positions in Intel Corporation (NASDAQ:INTC), compared to 70 funds in the preceding quarter. William B. Gray’s Orbis Investment Management emerged as the largest stakeholder of the company, with 16 million shares valued at $801.35 million.
In addition to Advanced Micro Devices, Inc. (NASDAQ:AMD), NVIDIA Corporation (NASDAQ:NVDA), and Amazon.com, Inc. (NASDAQ:AMZN), Intel Corporation (NASDAQ:INTC) is one of the best 5G stocks to invest in.
