In 2021 5G will see an increased roll out through out the world. Companies in the 5G infrastructure, applications, semiconductor and hardware sectors are where we need to allocate part of our investment this year. What are the key considerations of 5G ?
1. There will be more bandwidth required. Therefore making some of the 5G network operators an interesting investment option. One would be :
T_Mobile (TMUS)|NYSE Arca| 127.28|Jan 15th Closing .
T Mobile is ahead of the game compared to Verizon(VZ) and AT&T (T) in terms of having built high performance 5G network using "mid-band" radio spectrum
2. With additional bandwidth comes the requirement of continuously building the infrastructure for 5G . One of our favourites in this field is :
Crown Castle International Corp (CCI)|Nasdaq|157.25|15th Jan Closing
A real estate investment trust that owns , operates and leases cell towers and shared wireless infrastructure throughout the US and Puerto Rico
3. There are several key players in the mobile phone industry that are going benefit from the 5G upgrade cycle. Two of our favourite names are :
Apple Inc (AAPL)|Nasdaq|127.14|Jan 15th Closing
Apple launched 5G enabled iPhone 12 in September last year. Stock still trades 9.0% below its 52 week high and we see a further growth for its mobile phones this fiscal year. The company reports quarterly earnings on 27th Jan.
Xiaomi Corp (1810-HK)|HKSE|HKD 30.15| 18th Jan noon (HK time)
Xiaomi being one of the 3 largest mobile phone companies in the world will also see revenue growth due to China's recovery and mass 5G roll out. Although the share took a slight beating of late from the investment ban by US legislators, forcing American investors to divest their investments in Xiaomi which is alleged to be military linked by November 2021, We feel this could be a good entry point for investors outside of US. Especially if you are an investor with a long term view.
4. Then there are the semiconductor players that power and enable the 5G industry through their chips and chip related technology. The top of our pick are :
Qualcomm Incorporated (QCOM)|Nasdaq|157.09|Jan 15th Closing
Qualcomm is a giant chip making company for mobile phones which has just acquired a 2 year old chip startup called NUVIA founded by former Apple engineers. The acquisition will boost their chip performance and power efficiency moving forward. Top that with the 5G momentum we see further growth in this stock that has a fairly moderate PE ratio for a semiconductor growth company.
Taiwan Semiconductor Manufacturing Co Ltd (TSM)|NYSE Arca|125.23|Jan 15th Closing
One of the key suppliers to AAPL. This Taiwanese chipmaker saw 22% revenue growth in the 4th quarter of 2020 (year on year ) and is poised for more upside this year with 5G adoption and roll out moving to full swing later this year .
5. Finally we can't complete this section without covering the cybersecurity element that is required to protect networks connected to 5G . Our picks is :
Crowdstrike Holdings Inc(CRWD)|Nasdaq|219.51|15 Jan Closing
This stock services its clients on endpoint security protection & threat intelligence to provide complete breach protection through its cloud based platform called Falcon. It has a 240.00 price target by Goldman Sachs . Other analyst like Jeffries have given CRWD a 275.00 price target.