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The 5G Revolution Could Send These 3 Stocks Higher

We’ve got a full month of 2021 behind us now, and a few trends are coming clearer. The coronavirus crisis may still be with us, but as vaccination programs expand, the end is in sight. With President Trump out of the picture, and the Democrats holding both Houses of Congress and the White House, politics is looking more predictable. And both of those developments bode well for an economic recovery this year. Looking back, at the year that was, we can also see some trends that stayed firm despite the pandemic, the shutdowns, and the supercharged election season. One of the most important is the ongoing rollout of 5G networking technology. These new networks bring with them a fuller realization of the promises inherent in the digital world. Faster connections, lower latency, higher online capacity, clearer signals – all will strongly enhance the capabilities of the networked world. And it won’t just be mundane things like telecommuting or remote offices that will benefit – 5G will allow Internet of Things and autonomous vehicles to further develop their potential. There is even talk of medical applications, of remotely located doctors performing surgery via digitally controlled microsurgical tools. And these are just the possibilities that we can see from now. Who know what the future will really bring? To this end, we pulled up TipRanks’ database to learn more about three exciting plays in the 5G space. According to the Street, we are likely to see further interesting developments in the next few years as this technology takes over. Skyworks Solutions (SWKS) The first 5G name we’re looking at, Skyworks, is a semiconductor chip manufacturer that brought in $3.4 billion in total revenues for FY2020. Skyworks, which is a prime supplier of chips for Apple’s iPhone series, saw a massive 68% year-over-year increase in 1QFY21 revenues – the top line reached $1.51 billion, a company record, and also much higher than analysts had forecast. Much of Skyworks’ fiscal Q1 sales success came after Apple launched the 5G-capable iPhone 12 line. Strong sales in the popular handset device meant that profits trickled down the supply line – and Skyworks channels a disproportionate share of its business to Apple. In fact, Apple orders accounted for 70% of Skyworks’ revenue in the recent quarter. iPhone wasn’t the only 5G handset on the receiving end of Skyworks’ chips, however – the company is also an important supplier to Korea’s Samsung and China’s Xiaomi, and has seen demand rise as these companies also launch 5G-capable smartphones. Finally, Skyworks supplies semiconductor chip components to the wireless infrastructure sector, specifically to the ‘small cell’ transmission units which are important in the propagation network of wireless signals. As the wireless providers switch to 5G transmission, Skyworks has seen orders for its products increase. In his note on Skyworks for Benchmark, 5-star analyst Ruben Roy writes: “SWKS significantly beat consensus estimates and provided March quarter guidance that is also well ahead of consensus estimates as 5G related mobile revenue and broad-based segment revenue continued to accelerate… In addition to continued strength of design win momentum and customer activity, we are encouraged with SWKS confident tone relative to the overall demand environment and content increase opportunities.” In line with his comments, Roy rates SWKS a Buy along with a $215 price target. At current levels, this implies an upside of 20% for the coming year. (To watch Roy’s track record, click here) Roy is broadly in line with the rest of Wall Street, which has assigned SWKS 13 Buy ratings and 7 Holds over the past three month — and sees the stock growing about 15% over the next 12 months, to a target price of $205.69.(See SWKS stock analysis on TipRanks) Qorvo, Inc. (QRVO) Qorvo’s chief products are chipsets…