With generative artificial intelligence (AI) taking the world by storm last year, many investors seem to be leaving other game-changing technological trends behind. In 2024, I expect AI to continue to be a top trend that gets investors excited. However, the so-called metaverse could return to glory as competition in the headset market kicks into high gear. That being said, 5G stocks are showing the potential to be savvy investments.
As new tech trends dominate the headlines, older ones stand to be overlooked by investors who just have to be in on the hottest trends. 5G may not have as much explosive growth potential as the latest AI-driven innovations. However, I do think it’s a mistake to dismiss the 5G opportunity. Remember, other technological trends pave the way for higher data consumption over the coming years. You need decent mobile connectivity to get ChatGPT to answer questions on the go, after all!
With that, here are three top 5G stocks atop my radar in 2024.
T-Mobile (NASDAQ:TMUS) has been a top dog in the American telecom scene over the past five years. The company surged at the expense of its higher-yielding rivals struggling to keep up. Over the past five years, shares of TMUS have more than doubled, rocketing around 136% over the timespan. Shares are at new all-time highs of $163 and change. I view the top performer as a top pick to play 5G in the new year.
Moving into 2024, I expect more outperformance for T-Mobile as it continues to capitalize on the long-term 5G opportunity. In an industry-first, the company announced it was able to carry out a six-carrier aggregation call in the sub-6 GHz spectrum. It could do so while reaching a respectable bandwidth in the process. That’s quite the mouthful. However, the bottom line is that T-Mobile is innovating in the arena of 5G connectivity like it’s nobody else’s business.
As satellite connectivity becomes “a thing,” T-Mobile also stands to gain over its slower-moving telecom rivals. Recently, SpaceX launched its first satellites to be put to the test by T-Mobile. Indeed, T-Mobile seems to be at the forefront of next-generation 5G innovation and connectivity projects.
All considered, T-Mobile has the stage set for even more outperformance in the new year. This leading 5G stock looks to add to its recent breakout.
AT&T (NYSE:T) stock has been a disappointing investment for many investors who’ve attempted to bet on some sort of comeback over the years. Though the stock finished 2023 with a bang (shares gained around 29% since bottoming in summer), one can’t help but think a rapid retreat looms, given the stock’s propensity to spill after a period of strength. With rates falling and AT&T starting to deliver on its turnaround plan, I’d be inclined to give the 5G stock the benefit of the doubt this time.
Recently, Bank of America analyst David Barden touted AT&T stock as its top pick in the telecom scene. It’s hard not to share Barden’s enthusiasm. AT&T sports a solid 6.35% dividend yield and a modest 1.05 times price-to-sales (P/S) multiple, making it one of the most intriguing low-cost ways to score a bountiful dividend yield.
Multi-year bearish descents can be difficult to break out of. However, as the 5G theme heats up again, I don’t think AT&T will be left behind.
Crown Castle International (CCI)
Shares of cell tower REIT Crown Castle International (NYSE:CCI) exploded around 33% since bottoming out in autumn 2023. Before the sudden pop, CCI shares shed more than 55% of their value from peak to trough over nearly three years.
At writing, shares remain down over 45% from their all-time highs. With rates on the retreat and a new top boss to take the crown (CEO Jay Brown recently retired, with Anthony Melone taking his place on an interim basis), CCI shares may finally have a much-needed catalyst to take its recovery into high gear.
Indeed, activist investor Elliott Investment Management wanted a change in the corner office. Now they’re getting what they want; it will be interesting to see where the firm goes from here as it looks to further re-position itself for relief gains. Undoubtedly, a lot is going on at the firm, but it makes for a very intriguing turnaround play for investors seeking yield and relative value. If you are looking for the best 5G stocks on the market, start here.
On the date of publication, Joey Frenette did not hold (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.