In this article, we discuss the 11 best 5G stocks to buy according to hedge funds.
The rapid digitization of the world in the past year and a half, influenced heavily by the COVID-19 lockdowns, has also accelerated the commercial deployment of 5G in many parts of the world. According to the latest forecast by technology research firm Gartner, the global spending on 5G infrastructure is on track to grow over $19 billion in value this year, up 39% from $13.7 billion spent on 5G infrastructure in 2020. The increased spending will be facilitated by the rollout of 5G capable devices across the world.
Investment bank JPMorgan projects that the launch of 5G devices will peak in 2021 and the 5G market in North America will cross $180 billion by the end of this decade. Already, the 5G network adoption has reached one-third of global smartphone volumes, with further growth expected. Gartner claims that communications service providers in North America are one of the biggest beneficiaries of the 5G boom, growing 5G revenue from $2.9 billion in 2020 to $4.3 billion in 2021. In Western Europe, these numbers are $794 million and $1.6 billion.
Investors eager for an entry into the 5G universe should keep an eye on the activity of hedge funds. Some of the best 5G stocks to buy now according to hedge funds include T-Mobile US, Inc. (NASDAQ:TMUS), Micron Technology (NASDAQ:MU), and Verizon Communications Inc. (NYSE: VZ), among others discussed in detail below. The market trends expected to shape the industry moving forward include the adoption of 5G in industries as varied as manufacturing and healthcare. The new technology will likely also disrupt the finance world.
Photo by Mario Caruso on Unsplash
Our Methodology
With this context in mind, here is our list of the 11 best 5G stocks to buy according to hedge funds. The aim of the article is to provide a basic rundown of the most popular 5G stocks among hedge funds.
The list is compiled according to the number of hedge funds having stakes in each company. Data from the 873 funds tracked by Insider Monkey was used for this purpose.
Special importance was assigned to outlining the basic business fundamentals and analyst ratings for each firm to provide readers with some context so they can make more informed investment choices.
Why should we pay attention to hedge fund sentiment? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best 5G Stocks To Buy According To Hedge Funds
11. Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC)
Number of Hedge Fund Holders: 19
Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) is a Sweden-based firm that provides communications infrastructure and related services. It is placed eleventh on our list of 11 best 5G stocks to buy according to hedge funds.
On July 13, investment advisory Cowen maintained an Outperform rating on Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) stock and raised the price target to $21 from $19. Paul Silverstein, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $228 million in Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), the same as in the preceding quarter worth $317 million.
10. Nokia Corporation (NYSE:NOK)
Number of Hedge Fund Holders: 26
Nokia Corporation (NYSE:NOK) is ranked tenth on our list of 11 best 5G stocks to buy according to hedge funds. The firm provides mobile and fixed network solutions. It is headquartered in Finland.
On July 30, investment advisory Cowen upgraded Nokia Corporation (NYSE:NOK) stock to Outperform from Market Perform and raised the price target to $8 from $5, noting that a turnaround in the fortunes of the firm was in progress.
At the end of the second quarter of 2021, 26 hedge funds in the database of Insider Monkey held stakes worth $494 million in Nokia Corporation (NYSE:NOK), up from 21 in the previous quarter worth $352 million.
Just like T-Mobile US, Inc. (NASDAQ:TMUS), Micron Technology (NASDAQ:MU), and Verizon Communications Inc. (NYSE:VZ), Nokia Corporation (NYSE:NOK) is one of the 5G stocks attracting the attention of investors.
9. Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Holders: 44
Teradyne, Inc. (NASDAQ:TER) is placed ninth on our list of 11 best 5G stocks to buy according to hedge funds. The firm makes and sells automatic test equipment. It operates from Massachusetts.
On October 7, investment advisory DA Davidson upgraded Teradyne, Inc. (NASDAQ:TER) stock to Buy from Neutral and raised the price target to $140 from $135. Thomas Diffely, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Teradyne, Inc. (NASDAQ:TER) with 128 million shares worth more than $544 million.
In addition to T-Mobile US, Inc. (NASDAQ:TMUS), Micron Technology (NASDAQ:MU), and Verizon Communications Inc. (NYSE:VZ), Teradyne, Inc. (NASDAQ:TER) is one of the 5G stocks that hedge funds are buying.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 47
Broadcom Inc. (NASDAQ:AVGO) is a California-based firm that provides semiconductor infrastructure software solutions. It is ranked eighth on our list of 11 best 5G stocks to buy according to hedge funds.
On September 3, investment advisory Truist maintained a Buy rating on Broadcom Inc. (NASDAQ:AVGO) stock and raised the price target to $564 from $554, appreciating the earnings beat of the firm in the third quarter and raised guidance.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Select Equity Group is a leading shareholder in Broadcom Inc. (NASDAQ:AVGO) with 248,816 shares worth more than $118 million.
Along with T-Mobile US, Inc. (NASDAQ:TMUS), Micron Technology (NASDAQ:MU), and Verizon Communications Inc. (NYSE:VZ), Broadcom Inc. (NASDAQ:AVGO) is one of the 5G stocks on the radar of institutional investors.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Broadcom Inc. (NASDAQ:AVGO) was one of them. Here is what the fund said:
“A good way to conceptualize how we think about portfolio construction is to picture a pyramid. At the bottom of the pyramid are the durable compounding growth companies that form the strong foundation, resilience and consistency for the Strategy. We think these companies should comprise just under half of portfolio assets and feature annual revenue growth rates ranging from two times GDP up to 20% as well as healthy free cash flow generation.
Broadcom has delivered similar long-term appreciation through a combination of organic growth, capital deployment into new and adjacent opportunities through merger and acquisition activity as well as returning capital to shareholders through buybacks and dividends.”
7. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 51
Marvell Technology, Inc. (NASDAQ:MRVL) is a Delaware-based firm that operates in the integrated circuits industry. It is placed seventh on our list of 11 best 5G stocks to buy according to hedge funds.
On October 7, investment advisory Needham maintained a Buy rating on Marvell Technology, Inc. (NASDAQ:MRVL) stock and raised the price target to $75 from $69. Quinn Bolton, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 51 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in Marvell Technology, Inc. (NASDAQ:MRVL), up from 33 in the previous quarter worth $683 million.
T-Mobile US, Inc. (NASDAQ:TMUS), Micron Technology (NASDAQ:MU), and Verizon Communications Inc. (NYSE:VZ) are some of the top 5G stocks to buy now, in addition to Marvell Technology, Inc. (NASDAQ:MRVL).
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Marvell Technology, Inc. (NASDAQ:MRVL) was one of them. Here is what the fund said:
“We also purchased Marvell Technology Group, in the IT sector, a semiconductor maker with exposure to the fast growing 5G and data center markets whose shares sold off in the latest rotation out of growth stocks. Marvell just acquired data center supplier Inphi, a name we have held in other ClearBridge portfolios, which should increase the chipmaker’s cross-selling opportunities in a strong demand environment for chips.”
6. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 62
Analog Devices, Inc. (NASDAQ:ADI) is ranked sixth on our list of 11 best 5G stocks to buy according to hedge funds. The company makes and sells semiconductor products. It operates from Massachusetts.
On September 20, investment advisory JPMorgan assumed coverage of Analog Devices, Inc. (NASDAQ:ADI) stock with an Overweight rating and a price target of $215, up from Neutral and a price target of $119, noting the firm was a leader in the semiconductor market.
At the end of the second quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $5.7 billion in Analog Devices, Inc. (NASDAQ:ADI), up from 50 the preceding quarter worth $4.8 billion.
T-Mobile US, Inc. (NASDAQ:TMUS), Micron Technology (NASDAQ:MU), and Verizon Communications Inc. (NYSE:VZ) are some of the elite 5G stocks to buy now, alongside Analog Devices, Inc. (NASDAQ:ADI).
In its Q4 2020 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and Analog Devices, Inc. (NASDAQ:ADI) was one of them. Here is what the fund said:
”Analog Devices benefited from several global, long-wave trends such as automation, electric vehicles and the 5G network build-out. The company’s quarterly sales into the auto, industrial and communications sectors exceeded expectations, giving the stock a lift.”
5. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 63
Verizon Communications Inc. (NYSE:VZ) is placed fifth on our list of 11 best 5G stocks to buy according to hedge funds. The firm operates as a communications and technology firm. It is headquartered in New York.
On July 22, investment advisory Cowen kept an Outperform rating on Verizon Communications Inc. (NYSE: VZ) stock and raised the price target to $68 from $66, noting that the firm was one of the best defensive value names on the market.
At the end of the second quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $10.9 billion in Verizon Communications Inc. (NYSE:VZ).
In its Q1 2021 investor letter, Miller/Howard Investments, an asset management firm, highlighted a few stocks and Verizon Communications Inc. (NYSE:VZ) was one of them. Here is what the fund said:
“We sold Verizon (VZ) based on concerns over how much they might spend in ongoing spectrum auctions. Management may legitimately view spending billions of dollars to expand their spectrum holdings as necessary, but we believe the payoff will be slow and will make it challenging to grow the dividend at a good pace.”
4. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 78
Intel Corporation (NASDAQ:INTC) is a California-based firm that sells essential technologies for smart devices. It is ranked fourth on our list of 11 best 5G stocks to buy according to hedge funds.
On October 6, investment advisory Morgan Stanley maintained an Overweight rating on Intel Corporation (NASDAQ:INTC) stock but lowered the price target to $67 from $70, underlining greater headwinds for the firm in the near-term.
At the end of the second quarter of 2021, 78 hedge funds in the database of Insider Monkey held stakes worth $6.7 billion in Intel Corporation (NASDAQ:INTC).
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 86
NVIDIA Corporation (NASDAQ:NVDA) is a California-based visual computing company. It is placed third on our list of 11 best 5G stocks to buy according to hedge funds.
On October 5, investment advisory KeyBanc reiterated an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA) stock and raised the price target to $260 from $245. John Vinh, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $9 billion in NVIDIA Corporation (NASDAQ:NVDA), up from 80 the preceding quarter worth $6 billion.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
2. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 87
Micron Technology (NASDAQ:MU) is ranked second on our list of 11 best 5G stocks to buy according to hedge funds. The firm makes and sells memory and storage products. It operates from Idaho.
On September 29, investment advisory Morgan Stanley maintained an Overweight rating on Micron Technology (NASDAQ:MU) stock with a price target of $100, noting that the overall demand for the products of the firm was still healthy.
At the end of the second quarter of 2021, 87 hedge funds in the database of Insider Monkey held stakes worth $6.3 billion in Micron Technology (NASDAQ:MU).
In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Micron Technology (NASDAQ:MU) was one of them. Here is what the fund said:
“Micron is a manufacturer of memory semiconductor chips. Micron appreciated 17.3% during the quarter.
With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.
As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins.
While the cyclical nature of DRAM hasn’t changed, the cycles themselves continue to become more benign, leading to long-term economic improvement across these businesses. Micron is now continuously profitable, with industry players in a dramatically stronger position than even just five years ago.
The biggest negative surprise in the quarter came from Micron’s exit from its 3D XPoint hybrid memory business. The company also announced its decision to sell its accompanying Utah fab. Fortunately, this development does not alter the investment thesis much since 3D XPoint was an option ticket for future growth. While it’s unfortunate this product didn’t pan out, now is an excellent time to sell a fab, so perhaps it is a blessing in disguise?”
1. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 100
T-Mobile US, Inc. (NASDAQ:TMUS) is placed first on our list of 11 best 5G stocks to buy according to hedge funds. The firm operates in the wireless communications services business. It is headquartered in Washington.
On September 20, investment advisory Loop Capital initiated coverage of T-Mobile US, Inc. (NASDAQ:TMUS) stock with a Buy rating and a price target of $160. Stephan Bisson, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Greenwich-based investment firm Viking Global is a leading shareholder in T-Mobile US, Inc. (NASDAQ:TMUS) with 7.5 million shares worth more than $1 billion.
You can also take a peek at 10 Best EV Stocks To Buy Now and 10 Best EV Startups to Watch.
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Disclosure. None. 11 Best 5G Stocks To Buy According To Hedge Funds is originally published on Insider Monkey.
