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Investing in 5G stocks

It’s positioned to change the world, but the process may take decades.

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The world is abuzz with talk of 5G technology — what it is, how it works and how it has the potential to impact almost everything we do. But the network will take many years to update and not all the companies in this space will survive the trek to full implementation.

What is 5G?

5G is the fifth-generation mobile network. It’s the next step in the evolution of how we transmit data and is made possible by improvements in antenna design, cell towers and frequency ranges.

The technology is intended to deliver faster data speeds, increased bandwidth and a more reliable network. But as it stands, much of the world still operates on 5G’s predecessor: 4G LTE. And that’s because the process of upgrading to 5G is a tedious and time-consuming one: New cell sites must be built and radios, cell towers and networks will need updating.

The fifth-generation mobile network began rolling out to US cities in 2018. Today, AT&T, T-Mobile and Verizon have all launched 5G networks in select cities, with T-Mobile leading the charge offering its 5G network to 250 million. Once live, any device that connects to a 5G network can access more bandwidth, quicker data transmission and more stable connectivity.

What are 5G stocks?

5G stocks are stocks from companies that produce the hardware and software that makes 5G technology possible. These include a mix of network service operators and hardware manufacturers.

Why invest in 5G stocks?

5G technology is taking off in a big way. GSMA reports that by 2024, the technology will represent a $13.1 billion increase in global GDP — a figure that’s expected to swell to $565 billion by 2034. And Qualcomm believes the global expansion of 5G will generate up to 22.3 million jobs by 2035. This technology isn’t so much a question of if, but when.

With 5G already rolling out across major carriers in the US, it’s really only a matter of time before the technology becomes a cornerstone of our modern lives.

And beyond the obvious perk of a speedier mobile connection, 5G is expected to have a hand in all sorts of technological advancements, further fueling its growth and market impact. This network will help speed the evolution of autonomous vehicles, VR technology, telemedicine, remote surgery and so much more. Its applications are seemingly endless and implementation is already underway.

Risks of investing in 5G

At this point, 5G feels like nothing short of a certainty — so what’s the catch? Well, revamping a global mobile network isn’t easy. It requires money, cooperation and most of all, time.

The process of getting 5G off the ground will take many years. And unanticipated obstacles could bog down the process in the interim, including a new legislature that controls or limits the applications of the technology.

The technology’s newness is also a contributing factor for investors, as it’s difficult to know which companies will make it in the long run — and the implementation of 5G is expected to be a very long run.

Compare 5G stocks

There are numerous options for those ready to invest in 5G stocks. Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

What ETFs track the 5G category?

The following ETFs offer exposure to 5G semiconductors, telecom chip and gear makers, cloud computing services, satellite companies and more.

  • Communication Services Select Sector SPDR (XLC)
  • Defiance Next Gen Connectivity ETF (FIVG)
  • First Trust Indxx NextG ETF (NXTG)
  • Global X Internet of Things ETF (SNSR)
  • Global X MSCI China Communication Services ETF (CHIC)
  • Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR)
  • SPDR S&P Telecom ETF (XTL)
  • VanEck Vectors Semiconductor ETF (SMH)
  • Vanguard Communication Services ETF (VOX)

Compare trading platforms

To invest in 5G stocks, you’ll need a brokerage account. Review your platform options below.

Name Product Stock trade fee Asset types Option trade fee Annual fee
Vanguard
$0
Stocks, Mutual funds, ETFs, Forex
$1
$20 per year
Get a personal advisor when you open an account with at least $50,000.
Sofi Invest
$0
Stocks, ETFs, Cryptocurrency
N/A
0%
A free way to invest in stocks, ETFs and crypto.
Robinhood
$0
Stocks, Options, ETFs, Cryptocurrency
$0
0%
Make unlimited commission-free trades in stocks, funds, and options with Robinhood Financial.
Interactive Brokers
$0
Stocks, Bonds, Options, Mutual funds, Index funds, ETFs, Futures, Cash
$0 + $0.65/contract, $1 minimum
0%
IBKR Lite offers $0 commissions, and IBKR Pro offers advanced tools for professional traders.
TD Ameritrade
$0
or $25 broker-assisted
Stocks
$0 + $0.65/contract,
or $25 broker-assisted
TD Ameritrade features $0 commission for online stock, but watch out for high short-term ETF and broker-assisted trading fees.
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Compare up to 4 providers

Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

Bottom line

5G technology is chock-full of potential — both for investors and the world at large. But the technology will take many years to implement, and some companies may not survive the journey.

Review your brokerage account options across multiple platforms to find the account that best meets your needs.

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