The 3 Best 5G Stocks to Buy in January 2024

Stocks to buy

The arrival of 5G networks has sparked interest and attracted significant investments in the telecom industry. With speeds up to a hundred times quicker than 4G, reduced lag, and the ability to handle a spike in connected devices, 5G has the potential to change everything from smartphones to autonomous vehicles. While it will take time to build out 5G infrastructure fully, telecom providers and related sectors are already planning how to capitalize on this shift in connectivity. So here, we highlight three 5G stocks to ride the wave over the next decade. 

These companies develop the network gear and manufacture the products that stand to see surging demand given the capabilities opened up by 5G technology. For investors taking the long view, these stocks represent potential opportunities tied to the gradual 5G rollout and the applications this new level of connectivity will enable.

Broadcom (AVGO)

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The first company in our 5G stocks list is Broadcom (NASDAQ:AVGO) one of the biggest players that produces semiconductor devices focused on complex digital, mixed-signal, and analog products. Broadcom operates in two primary business segments: Semiconductor Solutions and Infrastructure Software. Its product portfolio includes set-top box system-on-chips, ethernet solutions, RF semiconductors, and fiber optic components, with applications such as data center networking, home connectivity, and electronic displays. In recent years, the company completed an end-to-end 5G networking switch portfolio and has become one of the major players in the industry, with a market cap of over $518 billion.

Broadcom has recently introduced the Trident 5-X12 chip, which features an on-chip neural network called NetGNT. According to the company, the switch doubles bandwidth, reduces power consumption by 25%, and utilizes a parallel neural network engine to enable enhanced telemetry, security, and traffic engineering capabilities for data centers.

AVGO reported an excellent third-quarter financial result. Revenue came in at $8.88 billion, up 5% YoY, while adjusted EBITDA was up from $5.38 to $5.80 billion. The company also repurchased 2.9 million shares totaling $2.17 billion. 

Broadcom’s fourth-quarter guidance is positive overall. Revenue is predicted to end at $9.27 billion, citing 4% growth, while adjusted EBITDA is anticipated at about 65% of projected revenue. Meanwhile, quarterly EPS was slightly above the consensus by 0.93%. These results and outlook have analysts maintaining a “Strong Buy” rating with a high price target of $1,250, indicating over 12% upside potential from current levels.

T-Mobile US (TMUS)

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The next 5G stock on our list is a mobile communications services provider headquartered in Washington, T-Mobile US (NASDAQ:TMUS). The company offers postpaid, prepaid, and wholesale wireless voice, messaging, data, and 5G services under the T-Mobile and Metro by T-Mobile brands in the US, Puerto Rico, and the US Virgin Islands. T-Mobile also sells devices and accessories, provides equipment financing and leasing, and offers high-speed internet. Today, the company has a market capitalization exceeding $187 billion across its business operations.

T-Mobile, in collaboration with Ericsson and Qualcomm, recently achieved 5G standalone connectivity using millimeter wave spectrum on its live production network. The project reached download speeds of over 4.3 Gbps without relying on low or mid-band spectrum. This technology can be useful for fixed wireless broadband services in dense environments.

TMUS reported a solid third-quarter performance. Service revenues increased 4% year-over-year to $15.9 billion. Postpaid service revenues were up 6% to $12.3 billion. Net income surged 322% to $2.1 billion, and EPS soared 355% to $1.82, beating analyst consensus by 4%

Core adjusted EBITDA grew 12% to $7.5 billion, while net cash from operating activities rose 21% year-over-year to $5.3 billion. Looking at this significant growth, analysts have issued a “Strong Buy” rating on T-Mobile stock with a $207 price target, representing over 27% upside potential for new investors. 

Verizon Communications (VZ)

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Wrapping up our 5G stocks list is a global telecommunications company offering wireless and wireline products and services to consumers, businesses, and government entities, Verizon Communications (NYSE:VZ). 

The company operates through two main segments: Verizon Consumer Group and Verizon Business Group. Verizon provides communications and entertainment services across the US through wireless networks, fiber-optic connections, and copper-based infrastructure. Key offerings include 5G and 4G wireless connectivity, high-speed Internet, digital TV, corporate networking solutions, and IoT services. 

Verizon has recently activated a new cell site in Shiloh Valley, Georgia, which enhances their 4G and 5G wireless service capabilities in the Kennesaw area. This site aims to improve coverage south of Town Center and along Barrett Parkway in Kennesaw. 

It is part of Verizon’s ongoing network infrastructure expansion to provide reliable connectivity across Georgia. This covers serving residents, businesses, and institutions like Kennesaw State University. This buildout supports their long-term goals of upgrading services through next-generation network technologies.

VZ’s third quarter had some slight misses. Total operating revenue came in at $33.3 billion, down 2.6%, alongside a net income of $4.9 billion, down 2.8% year-over-year. Despite that, EPS for the quarter ended at $1.22, beating consensus by 4.27%. Verizon also offers an attractive 6.80% annual dividend yield. Despite slight dips in the top-line and bottom-line results, analysts maintain a “Buy” rating on the stock with a price target of $46, indicating over 17% upside potential.

On the date of publication, Rick Orford did not have (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.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.

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