As the digital era transforms, fifth-generation (5G) wireless technology emerges as the linchpin of tomorrow’s connectivity. That represents a colossal shift. It promises to revolutionize sectors such as machine learning, cloud computing, and the Internet of Things (IoT).
The clamor for 5G is clear, particularly in sectors such as autonomous driving and the burgeoning metaverse. For savvy investors, golden opportunities offer tremendous upside potential. To put it in perspective, Markets and Markets project that the annual revenue from 5G will mushroom to a staggering $331.1 billion by 2027. This is a huge jump from $107 billion in 2022, marking a CAGR of 25%.
As this digital tide swells, let’s spotlight the three most undervalued 5G stocks to buy.
American Tower REIT (AMT)
As the world accelerates towards a 5G future, American Tower REIT (NYSE:AMT) has effectively aligned its chess pieces on the board.
By decisively offloading non-performing overseas assets, notably in India, AMT is looking to pounce on 5G and related verticals. It boasts an impressive portfolio of nearly 226,000 cell towers. Clearly, AMT is primed to capitalize on the growing demand for 5G infrastructure. Most of this momentum is attributable to hefty network investments by carriers and a substantial organic surge, particularly in the North American sphere.
Thus, the company’s recent Q2 results paint a bright picture surpassing forecasts. They reported average funds from operations at $2.46, showcasing a sales bump of 4.4 year-over-year (YOY), hitting the $2.73 billion mark.
Further, this uptick and more than a 4% spike in property revenue emphasize AMT’s dedication to fortifying its primary operations. More importantly, it offers a solid yield of over 3% with a decade-long legacy of dividend growth.
AT&T (NYSE:T) has established its position as a leading force in the U.S. wireless sector. It continues to chart a formidable path in the 5G space.
The company’s strategic alliances, spanning diverse domains such as virtual reality, emphasize AT&T’s unwavering market stronghold. Not just limited to wireless, AT&T is also dialing up its game in 5G technology and fiber advancements.
In addition, under CEO John Stankey’s vision, the future looks promising. He projects a plethora of opportunities stemming from the massive national fiber network, aiming to elevate consumer interactions and fortify the 5G framework.
Notably, AT&T isn’t just about its vast network. Its dividend is an incredibly attractive proposition for many investors. With 26 consecutive years of payouts, it currently yields a stellar 7.6%. With a modest Q2 revenue uptick and a pronounced surge in cash flows, the 5G potential seems to herald a stable trajectory ahead for T stock investors.
Marvell Technology (MRVL)
Amid the resounding buzz of 5G innovation, Marvell Technology (NASDAQ:MRVL) emerges as a standout, solidifying its position as a top player in data infrastructure semiconductor solutions.
This dedication propels high-speed 5G connectivity, positioning it as one of the top bets in the 5G sphere. However, its prowess doesn’t stop there, but also encompasses AI, drones, and cloud computing. Such a dynamic presence in these rapidly evolving sectors cements its status as a promising long-term investment. In addition, MRVL is backed by an impressive 13.5% revenue growth and 14.03% forward EBITDA growth.
And, Marvell’s particularly intriguing strategy is its forward-thinking approach to intertwining AI with its 5G solutions. This synergy is poised to fortify its leadership in the telecommunications landscape. Moreover, its management forecasts suggest a dramatic rise in AI revenue, expected to leap to $400 million in 2023 and double to $800 million by fiscal 2024.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines