Our 7 Top 5G Stock Picks for 2023
It feels like 5G technology has been around forever, but it’s really only started to emerge in the last two years. The Covid-19 pandemic actually slowed its progress. But innovation delayed is not the same as innovation denied. Indeed, 5G is going to impact many aspects of our life. And that means it’s time for investors to look at the best 5G stock picks for 2023.
5G is most frequently thought of in terms of wireless technology (e.g. a 5G smartphone). And there’s no denying that an increasing number of devices from automobile to industrial devices will benefit from the shift to 5G. One of the most anticipated product launches was the 5G version of the Apple (NASDAQ:AAPL) iPhone.
That said, the uses for 5G continue to expand as businesses move more of their infrastructure to the cloud. Accordingly, that gives investors many different ways to invest in 5G stocks. In this article, we identify seven of the top 5G stock picks for 2023.
The race is on among wireless device providers to capture market share. So far, T-Mobile (NASDAQ:TMUS) remains the leader. And since its acquisition of Sprint, T-Mobile stands to capture a larger share of that pie. In the company’s most recent quarter, T-Mobile added over 850,000 postpaid phone subscribers which was significantly higher than analysts’ estimates for 739,000.
T-Mobile also stands to benefit from more than $100 billion that the U.S. government is designating for the U.S. broadband buildout. As the nation’s second-largest wireless carrier, T-Mobile is working with Citigroup (NYSE:C) to find partners for the creation of a fiber-optic network that targets the home broadband market.
TMUS stock is up over 30% in 2022. The stock is not cheap by conventional price-earnings metrics. However, even though T-Mobile is trading near the top of its 52-week range, analysts give the stock a consensus price target that suggests 15% upside for the stock is reasonable.
Dish Network (DISH)
Dish Network (NASDAQ:DISH) makes this list of 5G stock picks for 2023 because it is preparing to launch 5G Infinite in the first quarter of 2023. This will give Dish Network a first mover advantage as the “first virtualized, standalone 5G broadband network” in the United States. Early reports say the company will be offering customers a $25 per month for life plan.
There is a risk that the company will be delayed in its execution. In November, Dish raised $2 billion in a secured debt offering to fund the expansion. The goal will be 70% coverage by June 2023. This could be the last remaining piece of the puzzle for DISH stock, which is undervalued by several metrics, but shows understandably slowing growth in its legacy satellite business.
This is attracting the attention of analysts who give DISH stock a moderate buy rating with a price target that has an upside of more than 145%.
As I mentioned in the introduction, the Apple 5G iPhone has been one of the most anticipated launches in 2022. As Larry Ramer recently wrote, Qualcomm (NASDAQ:QCOM) told investors it expects to provide “the vast majority” of the components that Apple will use in its 5G iPhones in 2023.
The relationship between Qualcomm and Apple will remain something to watch. However, even Apple becomes less reliant on Qualcomm, the company is well-positioned for the 5G build-out. To elaborate on this, I’ll refer to Louis Navallier who reminded InvestorPlace readers that the company “owns several patents that are critical to the manufacturing of semiconductors” that will be needed to make 5G technology possible.
QCOM stock dropped sharply after its November earnings report. But the stock has recaptured those losses, and offers attractive profitability and valuation metrics. Plus, analysts give the stock a moderate buy rating with a consensus price target that shows potential upside of over 30%.
Qualcomm provides many of the components needed to manufacture semiconductors. Broadcom (NASDAQ:AVGO) supplies the semiconductors themselves as well as some of the related technology. While this article is focusing on 5G stock picks for 2023, Broadcom will also benefit from the rapid growth of the Internet of Things (IoT).
Additionally, looking at the company’s revenue and earnings results for the first three quarters of 2022, you can see that demand remains strong. That demand is combined with strong fundamentals. As Brett Kenwell recently noted, Broadcom is a free cash flow generating machine, and that cash flow is being returned to shareholders in many ways, including a dividend that has been growing for 12 years and has a yield of over 3%.
Broadcom is also an example of the difference between price and value. While AVGO stock still trades for over $525 a share at the time of this writing, analysts continue to rate the stock as a moderate buy with a price target of over $670.
Corning (NYSE:GLW) is a different kind of picks-and-shovels investment in 5G technology. The company makes fiber optic cable. This will be essential to ensuring that 5G networks can handle increased transmission speeds and capacity 5G networks bring.
Earlier this year, Corning’s TXF fiber achieved 800G across 800km, offering proof that this product is a key solution to the long-haul transmission problem. TXF fiber will be significant for areas such as data centers, robotics and medical devices.
Corning is also an essential supplier to semiconductor companies. The company provides a range of solutions that are helping to make chips smaller and more complex. And when the company does make sales they do so with a profit margin that, at over 12%, is better than 99% of companies in its sector.
Corning met expectations for revenue and earnings in its most recent earnings report. However, for the first three quarters of 2022, the company has been beating its year-over-year comparables on both the top and bottom lines. Additionally, Corning pays a reliable dividend that has a yield over 3% and has been increasing for the last 11 years.
Crown Castle (CCI)
If 2023 goes the way that many economists believe it will, than real estate investment trusts (REITs) will continue to attract the attention of investors. That’s one reason that Crown Castle (NYSE:CCI) makes this list of 5G stock picks for 2023.
However, to be more specific, Crown Castle is the market leader in providing the small cells that are required for the build-out of 5G. The company says it has approximately 115,000 small cells that are either “on air” or under contract. And Crown Castle believes that the nation will need over 800,000 small cells by 2026. This makes the decision to buy CCI stock pretty simple.
REITs aren’t known for a lot of capital growth. However, CCI stock is forecasted to grow approximately 20% over the next 12 months. That being said, investors own REITs for their reliable dividends. And with a yield of over 4%, CCI stock doesn’t disappoint. Plus, the company has increased their dividend in each of the last eight years.
Last, but certainly not least on this list of best 5G stocks for 2023, is Amazon (NASDAQ:AMZN). The reason for that has to do with its Amazon Web Services (AWS) division. That’s the division that houses the company’s Private 5G platform.
As 5G expands, so is the desire for private 5G networks that live on the edge of a network. That’s what Amazon is providing with what it refers to as its “5G in a box” service. The company acknowledges that this is far from a finished product and there are obstacles to be overcome. Nevertheless, Amazon sees a long runway ahead for the private 5G sector. And it’s hard to bet against the company if it decides it wants to make a meaningful splash.
AWS continues to generate significant profits for Amazon. In fact, it was one of the few bright spots in the company’s most recent earnings report. 5G is an emerging story, but one that that gives investors an additional reason to buy AMZN stock.
On the date of publication, Chris Markoch 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.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.
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