6 Best 5G Stocks To Look Out For

Introduction

Investors are now more focused on AI and hope to benefit from its development. 5G technology is another rapidly developing technology that may offer potential high returns.

Based on my tracking and observation, some 5G companies are progressing well. In this article, I will explain why 5G stocks are a good investment choice and share my list of the best 5G stocks to buy for those who are looking for long-term investment returns.

What is 5G technology？

5G technology, the fifth generation of mobile communication technology, is the next generation of wireless communication standards after 4G. Through various technological innovations (such as beamforming), it provides faster data transmission speeds, lower latency, and more device connections than 4G.

• Transmission Speed: The peak rate of 5G can theoretically reach 10-20 Gbps, while the theoretical maximum of 4G is only 1 Gbps.
• Latency: The average latency of 4G is between 30 and 50 milliseconds, while the latency of 5G can be as low as 1 millisecond.
• Device Connection: 5G supports up to 1 million device connections per square kilometer, much higher than the approximately 100,000 device connections of 4G.

Why invest in 5G stocks?

The huge market growth potential and accelerated application of 5G technology in multiple industries make 5G technology an attractive investment option.

According to Market Research Future, the 5G market is expected to grow from $15.03 billion in 2024 to $229.41 billion in 2032, with a compound annual growth rate (CAGR) of 40.60%.

The development potential of 5G is unlimited. With its ultra-high-speed connectivity, massive data throughput, and ultra-low latency, 5G can integrate with emerging technologies such as the Internet of Things (IoT), artificial intelligence (AI), cloud and edge computing, and augmented reality (AR) and accelerate the application of these technologies.

5G can help enterprises improve operational efficiency and achieve sustainability. Industries such as healthcare, manufacturing, and autonomous driving use 5G for real-time data processing, remote operations, and mission-critical communications.

For consumers, 5G can provide richer experiences and unexpected social benefits (such as disaster relief). IBM conducted the following survey on the 5G application scenarios that consumers expect.

How to evaluate 5G stocks?

Evaluating 5G stocks requires a multi-angle approach. Combining market position, financial profile, and valuation analysis can help us quickly assess their investment potential.

Market Position

Market position can help us determine a stock's long-term growth potential. Since 5G technology is still in the early stages of promotion, if a company can maintain its leading edge in one or more market segments now, it is more likely to benefit from future market growth.

Financial Profile

Key financial indicators can provide insight into a company's health and growth prospects. Revenue and earnings data are key indicators of a company's health.

In addition, given that 5G requires a large capital investment, the company's cash flow situation must also be evaluated. Strong cash flow can ensure that the company maintains operations and provides funds for future 5G innovations.

Valuation Analysis

Valuation analysis helps determine whether a stock is reasonably priced. We must pay attention to the important indicator of the price-to-earnings ratio (P/E). A high P/E may mean overvaluation or high growth expectations. We must also compare this data with the industry average to determine whether the stock is undervalued or overvalued relative to its peers.

By combining these methods, investors can fully evaluate whether a 5G stock is worth investing in.

Top 5G Stocks to Consider

1. Nokia

2. Ericsson

3. Qualcomm

4. Broadcom

5. Verizon

6. AT&T

Category 1: 5G Infrastructure Providers

1. Nokia (NOK)

Nokia holds a strong position in the 5G infrastructure market. Its competitive advantage arises from a comprehensive end-to-end portfolio that includes radio access networks, core networks, and cloud infrastructure. The company's emphasis on research and development, particularly in network slicing, keeps it at the forefront of 5G innovation.

In the fourth quarter of 2024, Nokia reported revenue growth of 10.3%, surpassing expectations and achieving a comparable operating margin of 19.1%. The company also generated €0.5 million in free cash flow and proposed a dividend of €0.14 per share.

According to Intellectia, Nokia's price-to-earnings ratio is 18.8, slightly above the industry average. Five analysts have updated their ratings on Nokia in the past 12 months, with four giving it a "Buy" rating.

2. Ericsson (ERIC)

Ericsson is a global leader in providing 5G infrastructure. Its extensive patent portfolio and robust R&D efforts ensure that it maintains this position and reaps the benefits of the increasing global demand for 5G infrastructure. Ericsson powers over 145 active 5G networks across more than 70 countries and collaborates with major operators like Verizon and Vodafone.

In the fourth quarter of 2024, Ericsson's gross margin improved to 46.3%, up from 41.1% the previous year. Sales saw a 1% annual increase, driven by robust performance in North America, where sales surged by 54%. Ericsson also reports a strong balance sheet, with net cash of 37.8 billion Swedish kronor. This provides flexibility for research and development and dividend payments.

Ericsson's P/E is 23.1, which is mid-range. Analysts are cautious about Ericsson's prospects due to pressure from competitors such as Huawei. Intellectia data shows that three analysts have updated their ratings on Ericsson in the past 12 months, two "Hold" ratings and one "Sell" rating.

Category 2: Semiconductor Companies

3. Qualcomm (QCOM)

As a global leader in 5G modem and RF front-end technology, Qualcomm supports hundreds of millions of devices, including smartphones, automobiles, and industrial equipment. Qualcomm's licensing division (QTL) also holds a substantial number of 5G patents, which generates significant fees each year.

Qualcomm's financial performance is strong. Revenues increased by 17% yoy to $11.67 billion in the first quarter of 2025, driven by high demand for Android phones and automotive solutions. Notably, the company's automotive division showed significant growth, with revenue climbing 68% yoy.

Qualcomm's valuation appears attractive, featuring a P/E ratio of 18.1, which is lower than that of its peers, as reported by Intellectia. Over the past 12 months, Qualcomm has received 12 "Buy" ratings and 9 "Hold" ratings. According to analysts' target prices, the stock holds a potential upside of 15-20%, positioning it as a compelling investment for long-term growth.

4. Broadcom (AVGO)

Broadcom is a major player in the 5G ecosystem. It offers essential semiconductor solutions for infrastructure, including base stations and optical networks. The company supplies vital 5G components such as RF front-end modules, ASICs, and network chips to major clients like Apple, Samsung, Cisco, and Nokia.

Broadcom reported impressive financial results in the fourth quarter of 2024, driven by significant growth in its semiconductor and infrastructure software divisions. Revenue increased by 51.2% yearly, and the net margin approached 30%. Operating cash flow more than doubled annually, reflecting strong cash generation capability.

According to Intellectia, most analysts remain optimistic about Broadcom's prospects. Over the last 12 months, 27 analysts have updated their ratings on Broadcom, resulting in 24 "Buy" ratings and 3 "Hold" ratings.

Broadcom's P/E stands at 183, indicating elevated growth expectations. However, the company's robust financial performance, featuring an adjusted EBITDA margin of 64.7% and free cash flow of $21.9 billion, supports its valuation.

Category 3: Telecommunications Operators

5. Verizon (VZ)

Verizon is the largest wireless carrier in the United States. Verizon claims more than 280 million people will already use Verizon's 5G Ultra Wideband network by February 2025. Verizon's vast infrastructure and collaborations with tech giants like Apple and Samsung on 5G devices and enterprise private networks have positioned it as a leader in 5G adoption.

Verizon's financial stability and appealing dividend make it a compelling investment. In the fourth quarter of 2024, Verizon reported a year-over-year increase of 1.6% in total revenue, fueled by robust growth in wireless and broadband services. Wireless service revenue rose by 3.1% to $20 billion, marking its 18th consecutive quarter of growth.

Verizon offers a high dividend yield of 6.7%, making it one of the highest dividend-paying stocks in the S&P 500. Its $19.8 billion free cash flow in 2024 can comfortably cover its dividend. Additionally, Verizon's forward P/E ratio of 8.3 is lower than the industry average, suggesting it is undervalued compared to its peers.

According to Intellectia, 16 analysts have updated their ratings on Verizon in the past 12 months. Six analysts assigned the stock a "Buy" rating, while the remainder gave it a "Hold" rating. Analysts' price targets for Verizon range from $44 to $55, suggesting upside potential for the stock.

6. AT&T (T)

As the leading telecommunications provider in the United States, AT&T's 5G coverage extends to over 295 million people nationwide. AT&T maintains its market leadership through strategic equipment partnerships with companies like Apple and Samsung, along with enterprises' increasing adoption of private 5G networks.

AT&T reported solid results for the fourth quarter of 2024. Revenue increased by 3.3% year-over-year, surpassing expectations. The adjusted EPS of $0.54 exceeded the consensus estimate by 12.5%. AT&T also reported substantial free cash flow, totaling $17.6 billion in 2024, which offers financial flexibility to invest in growth initiatives and return value to shareholders through dividends and buybacks.

AT&T's forward P/E is approximately 11, which is slightly higher than Verizon's 8.3. Additionally, AT&T's dividend yield of 4.7% is less than Verizon's.

Most analysts remain optimistic about AT&T's prospects. According to Intellectia, 24 analysts have revised their ratings on Verizon over the past year, with 20 assigning "Buy" ratings and the others giving "Hold" ratings.

Stay Patient with 5G Stocks

Investing in 5G stocks has the potential for huge returns but comes with some risks.

The first issue is technical risk. There are challenges associated with the adoption of 5G technology. 5G base stations consume about three times more energy than 4G, which raises operating costs and conflicts with global carbon reduction goals. In addition, some people have misunderstandings regarding the radiation of 5G base stations, creating obstacles to their construction in certain areas.

The second concern is the company’s financial risk. 5G technology is still being developed, and companies must invest significant amounts of money to remain at the forefront of the industry. However, these high R&D costs may strain the company's financial resources.

The third type is regulatory risk. Due to security concerns, governments around the world impose strict regulations on 5G deployment, particularly concerning foreign participation in critical infrastructure. These regulatory barriers may delay deployment and raise costs for companies.

The impact of these risks on 5G stocks will be long-term. Therefore, if you are serious about investing in the 5G space and expect good potential returns, you may need to exercise patience.

How to build a 5G investment portfolio?

Investing in 5G stocks enables us to take advantage of the development of 5G technology; however, we must also consider the associated risks. Therefore, building a portfolio that balances risk and reward is essential.

To minimize risk, I suggest spreading your investments across different sectors of the 5G ecosystem, such as 5G Infrastructure Providers, Semiconductor Companies, and Telecommunications Operators. For easier diversification, you might also consider 5G-focused ETFs or mutual funds.

Since 5G is an emerging technology, tracking the market's performance is essential. I recommend using artificial intelligence tools like Intellectia to assist you in monitoring stocks. Intellectia can also offer you professional, detailed stock analysis based on real-time data and advanced algorithms to support your trading decisions.

Conclusion

As 5G technology advances, I believe the 5G stocks mentioned will perform well in the long term and provide investors with returns.

As long-established and globally recognized communication infrastructure providers, Nokia and Ericsson possess solid financial reports and leading market positions, making them attractive options for investors seeking safe 5G stocks.

Qualcomm and Broadcom are solid investment options for those interested in 5G technology and the semiconductor industry. If stock dividends matter to you, then Verizon and AT&T's high dividends make them great investment choices.

Frequently Asked Questions

How to invest in 5G technology?

Investors can invest in 5G technology by purchasing stocks of 5G chip manufacturers, equipment developers, and infrastructure builders. Alternatively, they can invest in 5G stock ETFs.

What are the biggest disadvantages of 5G?

The propagation range of 5G signals is not as good as that of 4G LTE signals. This means that more 5G base stations need to be built to improve the signal coverage of 5G, so the cost of adopting 5G will be higher than that of 4G.

Is 5G really worth it?

Yes, 5G surpasses 4G in nearly every way. It offers faster speeds, lower latency, and the capacity to connect more devices. Consequently, 5G presents more exciting application scenarios than 4G, including autonomous driving.