By Ali Hassan
4:18 AM UTC
5G technology is one of the biggest developments of recent times. The roadmap of 5G mobile networking is well on its way toward implementation. And Its rapid network construction will continue in 2022. 5G companies have been working on various dimensions of the technology. Based on that, these companies have massive growth potential in the coming years. Here we are discussing the top 5G companies to Invest in to get the maximum returns.
According to Statista, global 5G subscriptions are expected to double and surpass 1 billion this year. Meanwhile, the global 5G infrastructure spending needed to support the change could increase 22% to more than $23 billion. Therefore, 2022 could really be a good year for 5G stocks.
Despite things speeding up in the 5G space, this massive technology rollout will take a few more years to complete. In the meanwhile, businesses and consumers will need to upgrade their devices and systems to 5G networks.
Skyworks (SWKS) is at the forefront of this sea change. From its breakthrough SKY5 unifying platform to its 5G small cell, the company is well into high-speed end-to-end 5G connectivity. The company designs radio frequency chips that allow a phone to connect to a mobile network. Therefore, the uptick in 5G adoption has been a boon for the company.
On top of that, Skyworks is now using its know-how to enter other sectors. That includes virtual reality, smart-home devices, connected industrial equipment, and medical devices. The purchase of Silicon Labs’ automotive and network infrastructure segment in 2021 has put Skyworks in a strong position.
The company recently reported its first-quarter fiscal 2022 results. SWKS topped the estimates during the quarter. It surpassed the Consensus Estimate by 0.96%, with the non-GAAP earnings of $3.14 per share. The revenues were reported at $1.51 billion. Revenues increased 15% on a sequential basis.
The company’s quarterly results benefited from an increased rate of 5G deployment. The acquisition of Silicon Labs helped in expanding the customer base during the quarter. Although it’s the smallest chipmaker on this list, Skyworks has a healthy balance sheet and is highly profitable with a strong growth outlook.
SWKS with a good start to 2022 can be a great investment this year if you are looking for a top 5G company to invest in.
Advanced Micro Devices (AMD) makes this list following the acquisition of Xilinx, which is the industry leader in field-programmable gate array chips. Popular for FPGA chips, Xilinx is the gateway for AMD to enter the 5G space. As new hardware is developed for 5G, the adaptability of FPGA chips makes them ideal for building the basic equipment to deploy 5G technology.
Xilinx’s acquisition transaction was recently closed on February 14, 2022, as previously announced by the company. This purchase will integrate two industry leaders with complementary product portfolios and customers. There is a wide range of chips that now makes AMD a much bigger company. This will improve AMD’s profitability since Xilinx’s profit margins are far higher than those of traditional AMD chips. That’s because AMD chips are used in personal computers and data centers. Xilinx will now strengthen AMD’s position in the 5G market with the FPGA chips.
Following this, the chipmaker will use the expertise to enable leadership computing platforms for cloud, edge, and intelligent end devices.
Moreover, in the recent quarterly report, the company reported that data center revenue doubled year over year. Driven by the growing adoption of AMD processors, data center revenue is expected to keep up the pace.
Overall, AMD stock is a good buy with growth potential. Especially now after purchasing Xilinx, it has made itself a Top 5G company to Invest in
When it comes to 5G winners, network carriers are at the top of the list of Top 5G companies to Invest in. Verizon Communications (VZ) is certainly one of the biggest names in this space. While VZ stock has consistently underperformed the S&P 500, the telecommunications giant often attracts income-oriented investors, thanks to its dividend. VZ has a greater appeal due to its potential in the 5G market.
Earlier in January, Verizon said its 5G network will cover 100 million people in more than 1,700 cities by the end of January 2022. VZ has the most defensible customer base and the most profitable business of any of the big three U.S. wireless providers. Moreover, the asset divestments have improved the company’s balance sheet. On top of that, the company offers an appealing dividend rate of 4.80%.
The company may bear some losses initially as it is investing heavily in 5G. In the 2020 and 2021 government auction of the mid-band radio spectrum, Verizon was the top bidder. The company spent $53 billion, including incentive payments to satellite operators and clearing costs. With that Verizon owns a sufficient 5G mid-band spectrum, and it’ll be a key in network build-out.
2022 is really going to be an important year for Verizon. The company will be targeting to reach nearly 200 million people by the end of 2022 with mid-band spectrum-based 5G services. The potential is there and VZ seems a great 5G stock in the long term.
Marvell Technology (MRVL) is a well-known manufacturer of semiconductors. The company is working in the 5G space with its highly flexible end-to-end optimized 5G platform. Marvell’s goal is to exceed OEM design demands, accelerate the development of 5G New Radio, and ultimately, speed global carrier deployments.
Its market position in wireless networking technology has grown with each successive generation of wireless standards. Currently, the company has a stronghold in 3G and 4G with a network of more than a billion people worldwide. In 5G, Marvell offers complete silicon platforms that enable all aspects of the digital processing domain.
The company delivered a record revenue of $1.211 billion in the fiscal third quarter of 2021. For the fourth quarter, the company expects sequential revenue growth of 9%. With increasing 5G spending, Marvell expects the revenue to increase and carry the momentum in 2022.
MRVL stock can be a good buy if you have plans to consider a top 5G company to invest in.
SBA Communications (SBAC) operates 5G wireless communications towers across different continents. With the growing 5G development across the globe, SBAC seems an exciting 5G stock.
SBA generates more than 80% of its revenue from the U.S. market. That makes it better positioned for the 2022 5G ramp-up than other international tower companies. Moreover, SBA is relatively insulated from regulatory headwinds, rising interest rates, and pandemic disruptions.
The carrier capex is intended to build out 5G networks, C-Band, and other spectrum deployments. That will keep up the key tailwind for demand growth. Based on SBA’s backlogs and conversations with customers, the company expects elevated domestic leasing activities to continue through 2022. The increasing demand for 5G infrastructure will ultimately help in revenue growth for SBAC.
In the third quarter of 2021, SBA Communications reported revenue of $589.3 million. That’s a 12.7% increase from the same period of 2020. For the full year of 2021, the company has projected the total revenue be to around $2,310 million. SBA is in a strong position and is continuing to utilize 5G development worldwide.
SBAC has attracted a lot of investor attention, with shares soaring 220% over the past five years. SBAC stock looks like a good investment this year and now it can be considered if we are looking at a top 5G company to invest in.