5G’s Top Contenders: 3 Stocks You Need to Own
Wireless technology has come a long way. It allows consumers and businesses to communicate and transfer data at blazingly fast speeds that closely match wired connections. The rise in AI, cloud computing and online services has made it necessary for the masses to access fast and reliable wireless connections. According to one report, the 5G market is expected to grow to $331.10 billion by 2027. This represents a CAGR of 25.30% per year, which tells us that there is a lot of room for growth in companies in the industry. This increased demand for the wireless standard has opened up various investor opportunities. So, let’s take advantage of society’s need to stay connected with these three 5G stocks.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) is a provider of accelerated computing platforms used in various storage and server systems in the industry. This includes fifth-generation (5G) edge computing, cloud computing, enterprise data centers and AI. Its Total IT Solutions offering provides complete storage systems, servers, networking devices and workstations to its customers. SMCI also offers support and services to its customers globally to help upgrade and maintain their computing infrastructures. Its current operations are in the United States, Europe, and Asia.
SMCI reported an excellent Q1 FY2024. Net sales reached $2.12 billion, and non-GAAP diluted net income per common share was reported at $3.43. Net sales may have slightly decreased QoQ but were up YoY, and its gross margin remains healthy at 16.70%. SMCI CEO Charles Liang expressed confidence in the company’s ability to conquer ongoing supply constraints in the GPU market due to the strong demand for AI infrastructure. The company has also increased its 2024 revenue outlook from $10 billion to $11 billion. The strong growth in AI and steady financials make it evident why SMCI has excellent potential to be one of the best 5G stocks to pick up.
Jabil (NYSE:JBL) is a manufacturing solutions provider specializing in product management services and electronic design & production. Its services can be divided into two main segments. Diversified Manufacturing Services specializes in engineering solutions for material sciences, automotive, healthcare, packaging and mobility industries. On the other hand, Electronics Manufacturing Services (EMS) specializes in supply chain design & engineering, core electronics technology, and 5G, wireless, networking, and cloud industries. The company is the largest provider of healthcare manufacturing solutions globally.
JBL is expected to release its next earnings on December 21, 2023. Its last financials highlighted the company’s excellent performance and consistent revenue year-on-year. DMS revenue increased by 8% for the fiscal year, and its CEO, Kenny Wilson, expressed satisfaction with the JBL’s performance. While it may have experienced revenue drops in some segments, the company is in a great position to perform even better in the next fiscal period with its diversified portfolio and positive outlook. If you are looking for 5G stocks, we think JBL is worth checking out.
Qualcomm (NASDAQ:QCOM) is one of the most popular companies in the semiconductor industry. The company develops integrated circuits and software systems based on third-generation/fourth-generation/fifth-generation (3G/4G/5G) wireless technology, voice and data communications, computing, networking, and GPS-related products. Qualcomm also has licensing operations that offer other companies rights to its strong IP portfolio, which holds patents essential to manufacturing wireless products.
QCOM’s latest financial results showed a decline in earnings and revenue. However, its President and CEO, Cristiano Amon, expressed confidence in the company’s roadmap and execution with its mobile computing and on-device generative AI leadership. It’s positioned in key segments like Handsets, Automotive, and IoT, coupled with its leadership in the mobile chipset market. Qualcomm’s strategic collaborations and agreements with big companies, like Apple Inc., to supply Snapdragon 5G Modem-RF Systems for smartphones is a testament to its product demand. No wonder it is considered the benchmark for Android mobile processors. Any technology enthusiast looking for long-term stocks to buy and exposure to 5G companies should look at Qualcomm.
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.