We recently compiled a list of the 12 Best Telecom Stocks To Invest In Now.In this article, we are going to take a look at where Vodafone Group (VOD) stands against the other telecom stocks.
The global telecom services market was valued at $1.80 trillion in 2022 and is projected to grow at a 6.2% compound annual growth rate through 2030, as reported by Grand View Research. This growth is driven by factors such as 5G infrastructure investments, a rising number of mobile subscribers, increasing demand for high-speed data, and the growing need for managed services.
This industry has undergone a remarkable evolution since its inception. From early forms of communication like voice and basic visual signals transmitted over wired infrastructure, it has progressed to today's sophisticated landscape of exchanging audio, video, and text content across diverse wireless networks. This evolution is marked by advancements in data speeds, transitioning from early technologies like GSM and CDMA to 3G, and 4G, and now the commercialization of 5G, enabling rapid data transfer that was once unimaginable.
According to Forbes, one of the driving forces for the telecom industry in 2025 will be the continued rollout and maturation of 5G technology. 5G will deliver faster speeds and improved connectivity and also unlock a new era of possibilities, such as enabling immersive experiences like VR/AR, powering advanced industrial applications, and driving innovation across a wide range of sectors.
While 5G is currently being deployed, attention is shifting to 6G, which promises to deliver significantly enhanced capabilities. IDTechEx recently reported that 6G will revolutionize communication by operating in the terahertz (THz) spectrum. This will enable unprecedented data rates (Tbps) and ultra-low latency. Beyond speed, 6G will unlock new applications like energy harvesting and advanced sensing. To achieve this, 6G will utilize higher frequency bands (7-20 GHz, W-band, D-band) for both access and backhaul. However, higher frequencies present challenges like atmospheric absorption and interference.
Overcoming these requires optimizing link budgets through advancements in semiconductor technology. While CMOS may suffice for lower frequencies, SiGe and InP technologies are crucial for higher frequencies. SiGe BiCMOS offers a good balance of performance and cost, while InP provides the highest performance. Furthermore, Antenna-in-Package (AiP) technology is vital for integrating antennas directly into semiconductor packages, crucial for high-frequency communication, particularly in the mmWave and sub-THz ranges.
Methodology
We sifted through the Finviz stock screener to compile an initial list of top telecom stocks to invest in. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A customer receiving a mobile money transfer notification on their phone.
Vodafone Group (NASDAQ:VOD) is a UK-based telecommunications giant with services that include mobile and fixed connectivity, cloud solutions, IoT, cybersecurity, and digital applications. It serves a range of industries, from healthcare and finance to retail and agriculture.
The Vodafone Investments division is a newly established segment that plays a role in its restructuring efforts. Recently, it sold a further stake in Vantage Towers for ~$1.4 billion, facilitating a co-control structure. The company made several other investments, such as partnering with major tech firms like Microsoft and Google to enhance its digital services. Additionally, it invested $155 million in AST SpaceMobile to improve mobile connectivity technologies. These actions are expected to deliver positive results in the current FY2025 and support further acceleration into FY2026.
This division is designed to create a more agile and focused company. By leveraging partnerships, Vodafone Group (NASDAQ:VOD) aims to increase revenue and profitability while providing consistent returns to shareholders.
Overall VOD ranks 8th on our list of the best telecom stocks to invest in now. While we acknowledge the potential of VOD as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VOD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
