Great traders treat the market like a game of chess: they’re always thinking several moves ahead.
Sure, you could just look at the current market when considering trades, and maybe you’ll be right some of the time. But when you consider potential future market moves, it can potentially help you gain an edge in the market and in trading.
As a trader, how can you be proactive about trying to anticipate future moves in the market?
The bad news is that it’s not always possible to know what will become the next hot sector or stock market trend. The good news is that it’s possible to make educated guesses based on past trends, world news, and your own thorough research.
Need help getting started? In this post, I’ll explain a potential hot sector in the coming months and even years: 5G technology. You’ll learn what it is, how it could present opportunities for traders, and why 5G stocks may warrant attention on your watchlist.
Table of Contents
- 1 What is 5G Technology?
- 2 Why 5G Should Be on Your Radar
- 3 5G Technology Companies
- 4 Trading Challenge
What is 5G Technology?
The term 5G is just a cool way of saying fifth generation. The generation in question is the generation of tech that mobile devices like cell phones and tablets are currently using.
Just look at the top of your cell phone when you’re using mobile data — it likely has a little number followed by “G” at the end — it’s probably 3G or 4G, depending how quickly you adopt new technology.
So, 5G is the latest and greatest generation of tech.
What Is the Difference Between 4G and 5G Technology?
So what’s the big deal between the current 4G tech and the shiny new 5G?
It can be tempting to be dismissive of the shift, since updates and upgrades are seemingly part of our everyday lives now. However, 5G is going to bring some pretty big changes to the landscape of mobile and internet connection — possibly some of the biggest advancements in years.
But it’s going to require a pretty big buildout. Put it this way: If the technology infrastructure were a house, this wouldn’t just be a remodel, it would be a full gut renovation.
Why 5G Should Be on Your Radar
Is 5G worth investigating further? Here are some reasons why it should be on your radar …
5G Technology Will Be Incredibly Fast
Today’s tech involves low frequencies over the wireless spectrum to provide service. With 5G, the frequencies are going to be far higher, meaning that you won’t get as many glitches.
The sticking point? These high frequencies are powerful, but won’t travel as far. This means it’s going to require an overhaul in the infrastructure, creating a new system of cell antennas. They will be smaller, but there will need to be a whole lot more of them. In short: a big new buildout is necessary.
Pain in the butt? Sure thing, but it’s worth it. Because this new infrastructure is like building the foundation for future waves of technology. By doing this big rebuild, we’ll be prepared for the next several generations.
There Will Be Minimal Downtime
Part of why the 5G buildout is necessary is that there are more and more devices being used. You might argue that everyone and their grandma has a cell phone, so how many more could there possibly be?
The thing is, more non-phone devices are being connected to the internet, like E-readers, home security systems, and even appliances. The cumulative effect over time? A big slowdown in service.
With more and more devices being connected, the amount of bandwidth required increasing every day, which means that we need an overhaul to keep things speeding along with minimal downtime.
5G Technology Companies
So 5G isn’t a matter of if, but how soon … and what stocks could potentially benefit from the upgrade?
As a trader, it’s time to be asking yourself this: What companies could be poised to grow and expand due to the new technology?
Below, you’ll find a list of some examples of 5G companies to explore. While many of these are higher-priced stocks, they offer some great examples of the types of companies that could benefit from the upcoming tech developments. They could also inspire sympathy plays in smaller companies with lower-priced stocks.
Consider adding companies like this when forming your watchlist, and always be sure to perform detailed technical and fundamental analysis on every single contender so that you can create smart trading plans and be prepared!
1. QualComm (QCOM)
QualComm currently has a market cap of over 70 billion, with shares consistently trading at or above $50 for the past year.
With a price like that, QCOM certainly doesn’t fall into low-priced stock territory. However, it’s worth looking at what they have going on because they have many different areas of the business that could be benefitting from 5G.
Based in California, they’re involved in designing, developing, and implementing telecommunications products and services. They have many different portions of the company that work with technology, licensing, and tech strategy initiatives.
Because of their reach, they could be involved with many different aspects of the burgeoning 5G trade, including acting as a supplier of software and circuits, networking solutions, and products and services related to voice and data. This means that there are many opportunities for a company like this to grow.
2. Nokia (NOK)
With a market cap of $33 billion, this Finland-based company is no newcomer: they’ve actually been around since 1865. Yes, you read that correctly: 1865.
Clearly they’ve been able to adapt over the years and remain relevant; today, their key dealings involve network infrastructure, software services, and technology solutions.
The company is divided into several sectors, including Ultra Broadband Networks, IP Networks and Applications, and Nokia Technologies.
Between the different sections of the company, Nokia is pretty involved in advancing technology in a variety of ways, and has already released several press releases detailing their 5G advances and rollouts. It’s not unreasonable to expect this stock to benefit from 5G advances. Of course, remember that press releases from the company should always be backed up with more research, because they often will frame things in a positive light for the company.
3. Ericsson (ERIC)
With a market cap of about $29 billion, this is one of the lower-priced stocks on this list: at the time of this writing, shares are trading for under $10. They’re another European tech pioneer that has a long history (the company was founded in 1876) of being on top of tech advances.
Ericsson is divided into several divisions, which include networks, managed services, and digital services. Their main focus is facilitating digital transformation as it moves through support systems, assisting with networks, and is involved with software and business solutions and processes.
They’ve also gotten attention recently for designing a new AI-based engine, which many see as a powerful step toward solving the problem of increased complexity of networks as technology grows and more and more devices are connected to the internet.
This aligns nicely with 5G’s emergence, and Ericsson could be well positioned to benefit with further tech rollouts.
4. Skyworks (SWKS)
Skyworks has a market cap of about $15 billion and currently has shares trading at about $86.
Founded in 1962, this Massachusetts-based company is involved in the design/development and manufacture of semiconductor products. The wide-ranging catalog of products include all sorts of items that could prove useful with the 5G buildout, including power dividers, modulators, technical ceramics, and switches, just to name a few.
With operations in the U.S., several Asian countries, Europe, the Middle East, and Africa, it could benefit from the upcoming infrastructure upgrade.
Recently, this stock got some attention because it has been gaining the attention of hedge funds recently. Many view hedge fund managers’ decisions as prescient, but beware. It’s always important to do your own research, because no matter who says a stock is a must-buy, it’s always your money at stake when you execute a trade.
5. Verizon (VZ)
Verizon is massive, with a market cap of $244 billion, and shares are currently trading just under $60. It’s a behemoth in the industry, with far-reaching operations including communications, internet, information, and entertainment products for consumers, businesses, and the government.
Verizon has both a wireless and a wireline division. The former supplies wireless and data and equipment; the latter supplies broadband video, networking solutions, cloud services, and security services.
With its established presence in the tech world, it seems reasonable that Verizon will be up to date with 5G and could see some advances.
6. Intel (INTC)
Intel is a big company, with a market cap of $251 billion and shares currently trading at about $55.
They’re involved in all sorts of aspects of technology, including design, manufacturing, and direct selling of computer and tech related products. Intel also has all sorts of company segments, including various computing groups, data center networking, memory solutions, programming solutions, to name a few.
Intel is also involved in manufacturing and designing tech products and communication components. In short: they have lots of pots boiling in their kitchen, and there could be many ways for them to benefit in the age of 5G.
Companies like this will have to make some changes to accommodate the new tech. Could Intel be one of the industry leaders who emerge strong?
What 5G Technology is Coming in 2019?
If you’re salivating at the very thought of high-tech stocks, you might be wondering: When exactly is 5G coming?
There’s not one specific rollout date. However, updates are being released all the time. For instance, Verizon is said to be testing 5G technology. So it’s happening, but exactly how long it will take for 5G be the norm remains unknown.
However, there’s still much work to be done involving the new infrastructure, so expect the opportunities to unfold over time as 2019 continues, and over the next few years as 5G is adopted as the new standard.
Rather than holding your breath or getting impatient about when 5G is coming, use this time to do plenty of good research and create a strong watchlist of stocks that could benefit from these upcoming changes.
Get obsessive about reading the news and familiarizing yourself with the companies, their earnings, new releases, and more. Formulate trading plans that you can have at the ready if any companies seem really strong to you. A prepared trader is the one who is most likely to make calculated decisions!
If you need guidance learning how to do things like perform effective technical and fundamental research, learning about stock patterns, and getting real-life experience, consider joining my Trading Challenge.
My Trading Challenge was created to help traders become self-sufficient. I want you to not only learn the basics of trading, but how to put them to work.
I offer plenty of resources, including an enormous library of video lessons, webinars, live trading sessions, and my weekly watchlist.
By joining my Challenge, you’ll not only gain me as a mentor, but a community of like-minded traders. It’s a great way to immerse yourself in the world of trading and get into the market fast.
While the 5G technological advances are still evolving, the many changes ahead could mean opportunities for traders within this sector.
To ensure that you’re best positioned to take advantage of potential opportunities, be sure to stay on top of the news and to consider adding tech-related stocks to your watchlist so that when opportunities arise, you’ll be ready to pounce.
While it’s impossible to know exactly how stocks will perform in the future, by educating yourself and being prepared, you’ll be in the best position possible to take advantage of opportunities as they unfold.
Have you executed trades in the 5G sector? How have they turned out for you? Leave a comment and let me know!