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How to Profit from the Next Quantum Leap in Tech

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You’ve seen the commercials; 5G is on it way, and it promises to make your mobile browsing experience faster and more reliable than ever.

But if you’re anything like me, your initial reaction to reports of 5G’s upcoming rollout went something like this: “What—5G?! I was just getting used to 4G.”

What is 5G, and why do telecoms, tech companies, and regulatory agencies seem to think we need it?

The phrase “5G” literally translates to “5th generation mobile networks.” Easy enough, right? Well sure, but that opens up a whole new can of worms.

Why We Need 5G Now

If you haven’t closely followed the historical progress of wireless communication—it’s okay, I won’t hold that against you—you may have missed some past generations.

The world retroactively labeled analog wireless networks “1G” when they were replaced by the earliest “2G” digital networks in the early 1990s. The third generation—“3G”—followed toward the turn of the century and introduced mobile internet access, video calls, and mobile TV. “4G” was rolled out about a decade later to help usher in the golden age of smartphones.

As you can see, new wireless network generations tend to come about every ten or so years, and they typically coincide with a shift in use. 2G enabled SMS text messages and eventually multimedia messages at a time when cell phones were getting smaller and more affordable. 3G delivered new access to the internet, inspiring devices such as BlackBerrys and PDAs. Those products evolved into modern smartphones, and just a year after the iconic iPhone was released, we start to see the deployment of 4G.

Some of this shifting is easy to see as it’s happening, and other times it’s more recognizable after the fact. The latter may prove true once we see the influence that 5G has on the world once its fully unveiled, but the former is clearly occurring right now.

It’s clear that mobile internet users have different wants and needs than they did a decade ago. One great example is the advent of video streaming. Millions of people looking to watch their favorite shows on the go face clogged networks and have to wait while their favorite shows buffer.

More so than that, 5G needs to be able to support the next wave of human-to-object interaction. These past standards have primarily been based on human-to-human connection. 5G is going to power the growing Internet of Things (IoT) and other technologies that seek to bring people closer to the world around them.

It’s Going to Be Big

If there’s one thing that those with an investing perspective should know about 5G, it’s the sheer size of the potential market.

According to recent IHS research about $12.3 trillion worth of goods and services will be enabled by 5G networks by 2035. Nearly 22 million jobs will be created by new demands in the labor force related to 5G.

There are also huge amounts of money pouring into the business right now. For instance, semiconductor manufacturers—just one of several groups betting big on 5G technology —are spending a combined $200 billion a year on investments in 5G technologies, according to the IHS.

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Biggest Tech Breakthrough in a Generation

Be among the early investors in 5G technology that experts say could impact society as much as the discovery of electricity.

Current networks will soon be outdated and replaced by new 5G devices. The process is expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this emerging tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available until midnight Sunday, August 18.

See 7 breakthrough stocks now >>

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The number of connected devices worldwide that could potentially link to 5G networks is growing rapidly as well. In a 2017 report titled “What the Future Might Hold for the Internet of Things,” Global X Funds predicted that IoT-connected devices would swell from around 19 billion in 2016 to nearly 80 billion by 2025. In all likelihood, each of these will be powered by 5G.

This is the type of growth market that investors can’t afford to miss out on.

It’s Also Going to Be Really, Really Small

The other part of this equation is the technical side. Wireless networks are a complex science, no doubt—but prudent investors will want to have a basic grasp of the tech before diving in.

5G is going to be lightning fast. The official requirements for the standard have not been finalized just yet, but the International Telecommunication Union (ITU)—a group within the United Nations that approves standards proposals—has said that it must facilitate speeds up to 20 gigabits per second, or roughly 20x faster than the maximum speed of the best 4G networks in the world.

To do this, 5G will utilize previously untapped radio frequencies called millimeter waves (mmWave). Once considered too low-range to work for communication purposes, these ultra-tiny frequencies pack a serious punch in the speed and bandwidth departments.

mmWaves are primarily located in the 30 to 60 gigahertz spectrum. Telecom giants and other tech firms are battling for control of this spectrum, scooping up licenses – and acquiring companies that already own licenses – left and right. Look for these tiny radio frequencies to grab huge headlines in the future.

How to Invest Now

The impact of this new technology will be felt far beyond the realm of cell phones – although there will soon be hundreds of millions of 5G-ready handsets on the market.

Mobile networks will finally be powerful enough to fully support other technologies like the Internet of Things, self-driving cars and artificial intelligence. All told, 5G will add approximately $3 trillion to the worldwide GDP.

But we’re still early enough in the development of 5G technology that investors can get in on the profits.

That’s why our team of experts here at Zacks has published 5G: Top Stocks for the $12 Trillion Data Revolution. This special report explores 5G in greater detail and lists companies with first-movers advantage in this space. Their stocks are also likely to be among the biggest beneficiaries of 5G’s explosive growth.

Now is an ideal time to get started. As with any other emerging trend, the earlier you participate, the greater your potential profits can be. I encourage you to download the report right away. Please note: our 5G report is only available until midnight Sunday, August 18.

Click Here to Claim Your Copy of the 5G: Top Stocks Special Report >>

Good Investing,
Sheraz Mian

Sheraz Mian is our Director of Research. He determines which data to use for assessing stocks and funds. He is a contributor for Zacks Equity Research and Earnings Analysis, and is also the Editor of Zacks Top 10 Stocks.

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