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4 Ways to Cash In on the 5G Rollout

InvestorPlace logo InvestorPlace 2020-07-14 Eric Fry
a person on a stage: 5G digital hologram floating over a phone on a city background. © Source: Fit Ztudio / ShutterStock.com 5G digital hologram floating over a phone on a city background.

What is 5G, other than a technology buzzword?

5G digital hologram floating over a phone on a city background. © Provided by InvestorPlace 5G digital hologram floating over a phone on a city background.

Let’s begin with what it isn’t. 5G isn’t just the “phone technology” that follows 4G — kind of like how a 2020 model Prius follows a 2019 model.

5G is a quantum leap in communications technology. It replaces 4G like an automobile replaces a horse-drawn buggy, or like a personal computer replaces a slide rule.

Compared to 4G, 5G operates up to 100 times faster and accommodates a 10X jump in the number of connections. It also reduces something called “latency” by a factor of 10.

Latency is the time it takes for a packet of data to travel back and forth over a network from one cellphone or computer to another. In terms of internet service, latency usually means the time required for a signal to travel to the internet service provider’s (ISP) server and back.

Latency is typically measured in milliseconds. The lower the latency (the fewer the milliseconds), the better the network performance.

5G’s massive technological superiority over 4G means that dozens of new technologies may now emerge and thrive.

In today’s Smart Money, let’s dive a little deeper into four of these “5G Winners”…

And take a look at one 5G-related winner that has the potential to quadruple.

5G Winner No. 1: Mobile Communications

Although 5G can deliver blazing-fast bandwidth, that’s only the beginning of its impact on mobile communications.

The bigger picture is that the enhanced connectivity, bandwidth and responsiveness 5G provides will enable smartphones to function like high-powered, on-the-go PCs that can deliver ultra-high-definition video, virtual reality and other advanced applications.

Using today’s 4G networks, it would take about 3.5 hours to download all eight seasons of Game of Thrones. A 5G network could do the job in about two minutes.

But 5G isn’t only about how fast you can transport Daenerys Targaryen and her dragons to your TV screen. It is also about enabling numerous next-generation industrial and medical technologies. With 5G, for example, some manufacturing companies could implement “cobotic” processes in which humans and robots interact to optimize workflow.

For example, early last year, China’s Fujian Medical University conducted the first-ever remote surgery using a 5G connection. A doctor who was about 50 kilometers away from the hospital performed the 60-minute surgery by viewing a high-quality live video stream from the 5G network, and then controlling a robot over the network to perform the procedure itself.

Winner No. 2: Connected and Autonomous Cars

Next-generation transportation technology will also gain a big boost from 5G. Because of the low latency that 5G cellular systems can deliver, autonomous vehicle (AV) technology can finally begin to realize its vast potential.

Using C-V2X (vehicle-to-vehicle and vehicle-to-infrastructure communication, collectively called C-V2X communication), vehicles will be able to “communicate” with each other, as well as with city infrastructure or any other connected entity, including pedestrians.

Because C-V2X is based on wireless technologies, it can create a kind of automotive “vision” that can “see” around corners, look through walls and anticipate pedestrian behavior. Obviously, capabilities like these could greatly reduce both traffic congestion and traffic accidents.

Winner No. 3: Internet of Things

5G will bring to life that old joke: “Is your refrigerator running? … Well you better stop it before it runs out the door.”

By 2025, more than 40 billion “smart devices” will connect to the global network to become the internet of things (IOT). 5G networks will make these devices even smarter by enabling them to conduct edge-computing functions at blazing-fast speeds, in combination with artificial intelligence and machine learning processes.

As a result, connected appliances like smart locks, smart thermostats, smart security cameras and many other products will not only operate more reliably, but they will also “learn” to perform their specific functions more intelligently.

Winner No. 4: Cloud Computing

The tremendous human-, system- and machine-generated data that the IOT will produce will become a huge contributor to the future data deluge. International Data Corp. (IDC) expects IOT data volumes to jump nearly 30% a year between now and 2025.

As this 5G-enabled data begins coursing through the global network, demand for networking and cloud computing capacity will soar. Cloud data centers will have to grow memory and storage four- to tenfold to handle the load … and cloud data centers will become the core hub of the 5G digital ecosystem.

A new generation of cloud-based apps will sprout from that ecosystem. That’s because 5G will unleash the full potential of mobile cloud services that were not feasible with 4G connectivity.

Clearly, the 5G rollout will nurture an era of rapid and diverse technological creativity. This surge of innovation will create trillions of dollars of commerce worldwide.

According to a recent study by Intel (NASDAQ:INTC), average monthly traffic per 5G subscriber will increase by almost 700% over the next 10 years (2019–2028). Over that time frame, Intel predicts that media and entertainment companies alone could reap more than $1 trillion from 5G-enabled wireless revenue opportunities.

Multiply that opportunity by the dozens more that will emerge in other industries and suddenly you’re staring in the face of a multitrillion-dollar investment opportunity.

Research and consultancy group Omdia predicts global sales activity across multiple industry sectors enabled by 5G will top $13 trillion by 2035, representing 5% of global GDP and generating more than 22 million jobs worldwide along the 5G value chain.

Clearly, the 5G revolution is just getting underway. We cannot even begin to guess today what varieties or volumes of 5G-enabled marvels will become the new normal by 2028. But we can easily guess that the 5G revolution will create many outstanding investment opportunities over the next few years.

Thanks to both the recovering stock market and the realization that the semiconductor sector has entered a powerful demand cycle, many chip stocks have advanced 50% or more over the past few months.

5G-enabled technologies will be driving a massive portion of that demand.

That’s why, in the just released July issue of Fry’s Investment Report, I recommended a targeted play on future semiconductor demand. (To learn how to join us at the Investment Report and get that new issue, go here.)

Its upcoming level of profitability could attract enough investor demand to push the stock to double … even if we assume those earnings to be peak earnings.

But I’m looking for its shares to quadruple, based on a new paradigm.

Admittedly, that forecast puts me way out on the “lunatic fringe.” But the semiconductor industry of tomorrow might look a lot different from the industry of yesterday.

This company is not just about “computer chips” anymore: It is literally standing behind every cutting-edge technology of our time. The global economy simply cannot progress to next-generation technologies without the memory and storage this company provides.

Find out more here.

Regards,

Eric Fry

P.S. I spent the past year traveling from coast to coast in America, investigating our country’s growing wealth gap. I visited America’s wealthiest ZIP code … one of our nation’s poorest schools (in an area where an estimated 50% of the families are homeless) … and one of most radical, new high-end housing developments. Along the way, thieves smashed the windows of my film crew’s SUV and stole more than $5,000 worth of video equipment.

Still, it was all worth it … Because I’ve found the No. 1 way for any American, with even just a small amount of savings, to close the wealth gap … and potentially make serious money over the next few years. Check out my amazing footage and learn the No. 1 way to radically improve your finances by clicking here.

Eric Fry is an award-winning stock picker with numerous “10-bagger” calls — in good markets AND bad. How? By finding potent global megatrends … before they take off. And when it comes to bear markets, you’ll want to have his “blueprint” in hand before stocks go south. Eric does not own the aforementioned securities.

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