It feels like 5G technology has always been around, but it’s only really started to emerge in the last two years. The Covid-19 pandemic has actually slowed its progress. But late innovation is not the same as denied innovation. In fact, 5G will affect many aspects of our lives. And that means it’s time for investors to take a look at the best 5G stocks for 2023.
5G is most commonly thought of in the context of wireless technology (e.g. a 5G smartphone). And there’s no denying that more and more devices from automobiles to industrial devices will benefit from the 5G transition. One of the most anticipated product launches was the 5G version of the Apple (NASDAQ:AAPL) iPhone.
However, the potential for 5G continues to grow as companies move more of their infrastructure to the cloud. Accordingly, there are many different ways for investors to invest in 5G stocks. In this article, we identify seven of the best 5G stock picks for 2023.
T Mobile (TMUS)
A race is on among wireless device vendors to capture market share. Until now, T Mobile (NASDAQ:TMUS) remains the leader. And since acquiring Sprint, T-Mobile will grab a bigger slice of that pie. In the company’s most recent quarter, T-Mobile added over 850,000 postpaid phone subscribers, well above analyst estimates of 739,000.
T-Mobile is also benefiting from more than $100 billion that the US government is providing for US broadband rollout. T-Mobile is the country’s second largest mobile operator Citigroup (NYSE:C) to find partners to build a fiber optic network targeting the home broadband market.
TMUS stock is up over 30% in 2022. The stock isn’t cheap by traditional price-earnings metrics. But even though T-Mobile is trading near the top of its 52-week range, analysts give the stock a consensus price target that makes a 15% upside potential for the stock seem reasonable.
DISH network (DISH)
dish network (NASDAQ:COURT) is creating this list of 5G stock picks for 2023 as it prepares for the launch of 5G Infinite in Q1 2023. This will give Dish Network a first-mover advantage as the “first virtualized standalone 5G broadband network” in the United States. Early reports state that the company will offer its customers a $25 per month lifetime plan.
There is a risk that the company will be delayed in execution. In November, Dish raised $2 billion in a secured debt offering to fund 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 multiple metrics but understandably showing slowed growth in its legacy satellite business.
This is attracting the attention of analysts, who have given DISH stock a moderate Buy rating with a price target above 145%.
As I mentioned in the introduction, the Apple 5G iPhone was one of the most anticipated launches of 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 remains special. But even if Apple becomes less dependent on Qualcomm, the company is well positioned for 5G expansion. To elaborate on this, I refer to Louis Navallier, who recalled it InvestorPlace Readers that the company holds “several patents critical to the manufacture of semiconductors” needed to enable 5G technology.
QCOM stock fell sharply following its November earnings report. But the stock has recouped those losses and offers attractive profitability and valuation metrics. Also, analysts are giving the stock a moderate buy rating with a consensus price target showing potential upside of over 30%.
Qualcomm supplies many of the components needed to manufacture semiconductors. Broadcom (NASDAQ:AVGO) supplies the semiconductors themselves as well as part of the associated technology. While this article focuses on 5G stock picks for 2023, Broadcom will also benefit from the rapid growth of the Internet of Things (IoT).
Additionally, if you look at the company’s revenue and earnings results for the first three quarters of 2022, you can see that demand remains strong. This demand is combined with strong fundamentals. As Brett Kenwell recently noted, Broadcom is a free cash flow generating machine, and that cash flow is returned to shareholders in a variety of ways, including a dividend that’s 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 is still trading above $525 per share at the time of writing, analysts still rate the stock as a moderate buy with a price target above $670.
corning (NYSE:GLW) is a different kind of pick-and-shovels investment in 5G technology. The company manufactures fiber optic cables. This will be crucial to ensure that 5G networks can handle the increased transmission speeds and capacities that 5G networks will bring.
Earlier this year, Corning’s TXF 800G fiber reached over 800km, proving that this product is a key solution to the problem of long-distance transmission. TXF fibers will be important in areas such as data centers, robotics and medical devices.
Corning is also a key supplier to semiconductor companies. The company offers a range of solutions that help make chips smaller and more complex. And when the company does sell, it does so with a profit margin that’s over 12%, better than 99% of companies in its industry.
Corning met sales and earnings expectations in its most recent earnings report. However, through the first three quarters of 2022, the company has outperformed its year-over-year peers in both revenue and earnings. Additionally, Corning pays a reliable dividend that yields over 3% and has grown over the past 11 years.
Crown Castle (CCI)
If 2023 turns out as many economists believe, then real estate investment trusts (REITs) will continue to attract investor attention. That’s one reason crown lock (NYSE:IHK) compiles this list of 5G stock picks for 2023.
More specifically, however, Crown Castle is the market leader in providing the small cells needed to roll out 5G. The company says it has about 115,000 small cells that are either “on air” or under contract. And Crown Castle believes the nation will need over 800,000 small cells by 2026. That makes the decision to buy CCI stock pretty easy.
REITs aren’t known for much capital growth. However, CCI stock is forecast to grow about 20% over the next 12 months. That being said, investors own REITs because of their reliable dividends. And with a yield of over 4%, CCI stock doesn’t disappoint. Also, the company has increased its dividend for each of the last eight years.
Last but not least on this list is the best 5G stocks for 2023 Amazon (NASDAQ:AMZN). The reason for this has to do with the Amazon Web Services (AWS) business unit. That’s the division that houses the company’s private 5G platform.
As 5G expands, so does the desire for private 5G networks that live at the edge of a network. Amazon offers this with its so-called “5G-in-a-Box” service. The company acknowledges that this is far from a finished product and that there are still obstacles to be overcome. Still, Amazon sees a long way to go for the private 5G sector. And it’s hard to bet against the company when it decides to make a meaningful leap.
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 gives investors additional reason to buy AMZN stock.
At the time of publication, Chris Markoch had no position (either directly or indirectly) in any of the securities mentioned in this article. The opinions expressed in this article are those of the author and are governed by InvestorPlace.com Posting Policies.