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What are the best 5g stocks to buy in October?

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  • The 5G chipsets market may expand at CAGR of 52.7% in the next 7 years to over $23.5 billion
  • The UK is struggling to catch up in the 5G race, dropping one position in the global rankings since late 2019
  • A need for higher speed data connection and lower latency has increased demands for 5G equipment

According to some recent reports, the 5G chipset market is expected to grow over 50% to $23.5 billion in the next seven years. In this piece, we present 3 5G stocks that are likely to benefit from the emerging trend. 

Rapid growth expectations

According to a recent market research report, the 5G chipsets market is estimated to expand at a compound annual growth rate (CAGR) of 52.7% from this year to 2027 and will be worth around $23.5 billion. 

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Such rapid growth expectations for the 5G market are mostly based on the rising demand for high-speed data services, fast-developing smartphone technology, as well as the growth of IoT & connected devices. Still, the growth of the market is partly limited because of the expensive equipment, a fragmented spectrum harmonization model and emerging cybersecurity issues.

Based on the application, the largest share of the 5G chipset market this year is likely to fall under the smart cities section. The 5G network is utilized in facing key problems in smart cities, including infrastructure and housing management, providing quick access to services, transportation and logistics, public security and surveillance, efficient services management, intelligent mobility, environment & pollution control and more.

When it comes to the chipset type, the largest portion of the 5G chipset market is expected to fall under the application-specific integrated circuits segment. A big part of this segment is mainly accounted for its low cost of manufacturing for large volume production, better efficiency, higher performance compared to other ICs, and higher adoption by mobile network providers for cutting costs.

Based on frequency, the sub 6Ghz segment is projected to control the largest portion of the overall 5G chipset market this year. On the other hand, the 24Ghz and higher frequency section are expected to expand at the fastest CAGR during the forecast period. The expansion of this segment is largely owing to its capability to handle large bandwidth and high-speed data transfers.

Based on vertical, the segment estimated to develop with the highest CAGR during the forecast period is the security & surveillance. This is mostly thanks to the emerging security difficulties in urban areas, as well as attempts from city authorities to offer higher security and minimize reaction time in case of emergencies.

Even though the coronavirus pandemic has slowed down the adoption process of 5G services in the world, it had an insignificant effect on 5G as it’s still an emerging technology and only a few industries use 5G network services. 

Furthermore, because of coronavirus, numerous industries were forced to base their operations on remote servers, which requires a higher speed data connection and lower latency. This will also have a positive effect on 5G in terms of demand.

UK must up its 5G game

As for the deployment of the 5G network, analyst house Omdia found that the UK has dropped one position in the global rankings since late 2019. According to Omdia, the UK is now in the 7th position.

South Korea, which has around 5.88 million subscribers, is still ranked number one, compared to the previous report when South Korea has had 4.67 million subscribers. Kuwait is sitting in the second position, while the United States is in the third.

When it comes to the UK, the country’s 4 major operators are working to grow their 5G footprint, and the government is also pouring lofty investments to provide rural areas with access to the advanced cellular network infrastructure.

“The UK is second only to Switzerland in terms of 5G deployment in the European market and as things stand is well-positioned to lead its continental rivals in the deployment of 5G – giving it a potential advantage in terms of developing next-generation industries,” said Stephen Myers, Principal Analyst at Omdia.

3 5G stocks to buy in October

Nokia

Nokia (EPA: NOKIA) is already benefiting from the UK’s decision to bar Huawei from supplying its 5G equipment to telecom companies. The Finnish firm agreed a deal to supply its 5G equipment and services BT.

Nokia stock price fell around 30% from August highs in a major market correction. Shares closed lower for the sixth week in a row as they approach the 3.05 mark, offering a major buying opportunity. Levels above the 4.00 handle will be targeted by the bulls.

Xilinx

As a company that manufactures semiconductor devices used across a wide variety of sectors, Xilinx (NASDAQ: XLNX) has seen its revenue consistently rise. 

Xilinx stock price jumped around 50% from its lows in March as the buyers aim to capitalize on the broken descending trend line. The first target on the upside is $116, signalling a quick upside of over 10%. 

Qualcomm

Qualcomm (NASDAQ: QCOM) is definitely one of the prime candidates to benefit from the 5G revolution. The company has reportedly nearly 700 patents registered, including its flagship products Snapdragon chips, which are widely used in the mobile phones industry. 

In August, Qualcomm share price rose to an all-time high near $124.00. Eventually, a pullback to the $96 handle would provide a massive opportunity to invest in Qualcomm shares and benefit from the company’s role in the 5G infrastructure rollout. 

Summary

A new market research report showed that the 5G chipsets market is projected to grow at a compound annual growth rate (CAGR) of 52.7% from 2020 to 2027 and will achieve worth of about $23.5 billion. Xilinx, Qualcomm and Nokia seem well-positioned to gain amid the 5G network rollout.