As rising COVID-19 cases lead to extended hybrid working and increasing applications of 5G across several sectors, the 5G market should continue to experience robust growth. Therefore, it could be wise to add shares of quality 5G stocks below to your watchlist.
The 5G industry saw massive growth amid the pandemic with rising demand for better connectivity. With the rapid surge in Omicron-related COVID-19 cases and extended hybrid work culture, this industry is projected to witness bullish trends. Ericsson predicted that there would be 600 million 5G subscribers by the end of 2021.
In addition, according to CCS Insight, 900 million 5G devices will be sold in 2022. Moreover, the global 5G technology market is anticipated to record a CAGR of 73.61% by 2028.
Qualcomm Inc. (QCOM)
QCOM engages in developing and commercializing foundational technologies for the wireless industry worldwide. It has three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); & Qualcomm Strategic Initiatives (QSI).
On November 16, 2021, QCOM announced a collaboration to bring the latest advancements in driver assistance technologies and products of its Snapdragon Ride Platform to BMW Group’s next generation of advanced driver-assistance systems and automated driving platforms. Cristiano Amon, the president and CEO of QCOM, said, “We are very proud of this milestone and cannot wait to bring our jointly designed products on the road.”
QCOM’s non-GAAP revenues came in at $9.32 billion, up 43.4% year-over-year for the fiscal fourth quarter ended September 26, 2021. Its non-GAAP net income came in at $2.92 billion, up 74.7% year-over-year. Also, its non-GAAP EPS increased 75.9% year-over-year to $2.55, and its non-GAAP EBT came in at $3.28 billion, up 76% year-over-year.
Analysts expect QCOM’s revenue to increase 18.3% in fiscal 2022, to $39.58 billion. Its EPS is expected to increase 25.3% to $10.7 in fiscal 2022. The stock surpassed its EPS estimates in each of the trailing four quarters. Over the past year, it has gained 20% to close Friday’s trading session at $182.87.
QCOM’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has a B grade for Value, Momentum, Sentiment, and Quality. Within the Semiconductor & Wireless Chip industry, QCOM is ranked #13 of 99 stocks.
AT&T Inc. (T)
T provides telecommunication, media, and technology services worldwide. The company operates through Communications; WarnerMedia; and Latin America segments. Its key market focus areas are 5G, AT&T Fiber and HBO Max.
On December 15, 2021, T launched its new augmented reality (AR) effect on Messenger and Instagram apps. David Christopher, executive vice president, and general manager, partnerships and 5G ecosystem development, T, said, “AT&T and Meta are bringing people closer together by transforming social media from sharing moments to making memories. Our 5G paired with Meta’s AR technology makes your video calls more interactive and engaging for the whole family.”
T’s net income increased 98% year-over-year to $6.27 billion for the third quarter ended September 30, 2021. The company’s EPS came in at $0.82, compared to $0.39 in the year-ago period. Moreover, its total assets came in at $547.11 billion, for the period ended September 30, 2021, compared to $525.76 billion, for the period ended December 31, 2020.
Analysts expect T’s EPS to increase 5.3% to $3.35 in fiscal 2021. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past month, the stock has gained 7.8% to close Friday’s trading session at $24.60.
T’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. T has a B grade for Value. In the Telecom – Domestic industry, it is ranked #4 out of 19 stocks.
Nokia Corporation (NOK)
Headquartered in Espoo, Finland, NOK provides mobile and fixed network solutions worldwide. The company operates through four segments: Mobile Networks, Network Infrastructure, Cloud and Network Services, and Nokia Technologies.
On December 16, 2021, NOK launched Gigabit Connect to make it easier for fiber network providers to deploy gigabit broadband services in MDUs where the final connection leg is via twisted pair or coaxial cables. Sandy Motley, President, Fixed Networks at NOK, said: “With Gigabit Connect, we are hiding the complexity, enabling plug-and-play fiber deployment and on-going management as with any normal fiber line. Furthermore, consumers will experience the same speed and low-latency performance as standard fiber.”
NOK’s net sales came in at €5.4 billion ($6.13 billion) for its fiscal 2021 third quarter, up 2% year-over-year. Its profit for the period increased 78.2% year-over-year to €351 million ($398.64 million), and its EPS came in at €0.06, up 100% year-over-year.
NOK’s revenue is expected to increase 3.3% in 2021 to $25.76 billion. Its EPS is expected to grow 37.90% to $0.4 in fiscal 2021. It surpassed the EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 59.1% to close Friday’s trading session at $6.22.
NOK has an overall B rating, equating to a Buy in our POWR Ratings system. The stock has a B grade for Value. NOK is ranked #13 of 55 stocks in the Technology – Communication/Networking industry.
