This article was last updated on July 6, 2022
The global telecommunication industry is quickly changing thanks to the recent advent of 5G technology. This next step in the evolution of the internet promises to usher in faster and much more accessible internet connections to customers across the globe. Naturally, companies that are leading the development of this technology are going to be at the forefront of the industry. They are expected to quickly rise in value, making them great investment opportunities. But not all of them are so easily accessible. Most telecom and tech giants are pricy and difficult to buy into. As a result, we have put together a list of some of the best penny stocks in the 5G industry.
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What Are 5G Penny Stocks?
5G is the fifth generation of broadband cellular networks. In the telecommunication industry, 5G is the latest standard for transmitting radio waves that provide compatible devices with cellular interconnectivity at much greater speeds. This is because 5G has much greater bandwidth than its predecessors, allowing for speeds of up to 10 Gbit/s.
Like previous generations, 5G works on the basis of cells, creating small areas of coverage through the use of local antennas. When moving between such areas, the handling of devices is seamlessly transferred between cells. However, one downside of 5G is that the areas of coverage are much smaller than previous generations. This means that providers must install more antennas and transmitters to maintain a network.
Additionally, 5G has greater utility than its predecessors, allowing for more types of devices to connect. This allows for the further development of the so-called “internet of things (IoT)“. This is a network of interconnected devices of varying sorts that all possess different sensors, software, and other technical characteristics. As such, they are able to create a network and exchange data amongst themselves.
Because 5G technology has such wide applications, it encompasses numerous industries outside of telecommunications. This means that any company related to the technology in either a direct or indirect way can be considered as a 5G stock. Such businesses are becoming an increasingly popular investment opportunity among financiers.
Strengths And Weaknesses Of 5G Penny Stocks
5G stocks come with many strengths. However, they also have several significant weaknesses. Let’s first look at the various strengths and pros that such companies possess. Because 5G is the next generation in telecommunication, the technology is being widely adopted across the globe. This provides ample space for future growth as the industry is still in its infancy.
As greater coverage is achieved and adoption grows among users of smart devices, the internet of things network will only grow. By becoming an integral part of our daily lives, IoT will also make 5G essential. Meanwhile, because 5G can provide much greater speeds and bandwidth than its predecessor, it has an advantage over various other competing technologies.
However, 5G’s potential is not limited to the cellular industry. Because of its high speeds and affordable prices, 5G also threatens to replace conventional landlines, optical, and ethernet-based internet solutions. This means that the technology has the potential to dominate the internet provider market and replace the current standards.
Although 5G has many strong suits, like any new technology, it comes with uncertainties as well. One drawback is the fact that antennas have a much shorter range. This means that it is more difficult, both financially and logistically, for companies to achieve good coverage. This can present problems in the short term, especially as the development of the infrastructure is underway. Limited availability and spotty coverage can cast doubts among skeptics.
Meanwhile, because of poor education regarding how 5G works, many conspiracy theories have cropped up over the years. Fake news and claims with no scientific backing have riled many citizens to fear for their health. Believing that 5G exposes them to dangerous radiation, people have protested the adoption of the technology, calling for its prohibition.
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Top 5G Penny Stocks
Regardless of where you might stand on the subject of 5G, one thing is clear – the technology is here to stay. This means that there are ample opportunities for investment in the field. Here are some of the most promising and affordable 5G penny stocks currently on the market:
Borqs Technologies (NASDAQ: BRQS)
Borqs is a developer of various smart devices and solutions. Focused on the internet of things, the company has both B2B and B2C divisions. The former develops various solutions like smart automobile systems, mobile operator services, smart appliance solutions, and more. Some of the most prominent accomplishments of the company include developing the first commercial-grade videotelephony software for Android as well as developing the first 4G-compatible Android wearable device.
Currently, Borqs is building a massive 5G Industrial Park in Huzhou, China. The company completed the construction of manufacturing facilities at the site but has yet to finish the entire project. This is a sizable investment that signals the company’s future-oriented and forward-thinking commitment. Additionally, it will also shore up their production pipeline and reduce costs by introducing greater vertical integration.
Veon Ltd. (NASDAQ: VEON)
Veon is a global telecommunication company that operates in Africa, Asia, and Europe. However, most of the company’s revenue comes from Russia, Ukraine, and Pakistan. With over 210 million clients, the company has a sizable userbase that takes advantage of its voice, broadband, cellular data, and other digital services.
As a major player in the region, Veon has enjoyed a good run, with its stocks maintaining a price of about $3 for the last three years. However, due to recent events in Ukraine, the provider has taken a significant hit. Its prices dropped by almost 50% on February 24 and continued to fall in the subsequent days. As a result, the company now trades at about $0.51 per share, making it incredibly affordable. Finding a telecom provider at such a low price is an incredibly rare occurrence.
While the conflict in Ukraine and numerous sanctions on Russia make the business’s future uncertain, it still has great potential. If the company is able to weather this challenge, it will undoubtedly regain its value and strengthen its presence in the region. For now, Veon claims to have ways of navigating these difficulties and continues to provide its services in both countries.
Communications Systems, Inc. (NASDAQ: JCS)
Communications Systems is a very old and respected company in the telecommunications industry. Established in 1969, the mid-western company has been a leader in global research and providing services to its customers for more than 50 years.
Although it might not be trading at the heights that it saw in the mid-90s, the company is still very much active. Today, it focuses on the manufacture and distribution of connectivity products. This gives it a strong position in the market as more and more companies ramp up their infrastructure to implement 5G.
By being higher up on the supply chain, Communication Systems is less affected by economic and global changes. This makes it a safer investment in the long term and gives it the opportunity to capitalize on the new technology. Currently priced at $3,05, JCS is a great way to get in on the 5G sector without breaking the bank. Another plus of this company is that it pays out dividends to shareholders, which is pretty rare for penny stocks.
ASE Technology Holding Co. (ASX)
ASE is a tech company based in Taiwan. Specializing in the production of semiconductors, this company is uniquely positioned within the industry to capitalize on the advent of 5G. Due to the ongoing shortage of semiconductors, ASE has a relatively low number of competitors. Meanwhile, the market is starved for the company’s products, almost ensuring its continued success.
While ASE reported that it expects shortages to last beyond 2023, the company is still very positive as to its future growth. A main part of this is the expectation that revenue from its core manufacturing business will grow by 10%. That is double the industry standard of 5%. Meanwhile, ASE’s net profit for 2021 was recorded to have risen by 132% over the previous year.
Although ASE might be affected by the global chip shortage, it remains the industry’s largest producer. This means that it only stands to benefit from the increased global demand for its products.
Nokia (NYSE: NOK)
While technically not a penny stock, Nokia evades that categorization only narrowly. However, we believe that it deserves an honorable mention, as it is a significant force in the global 5G sector. Although above the $5 mark, Nokia’s stock trades at a very reasonable price and can be a strong addition to your portfolio.
Most recently, Nokia introduced the world’s first Edge Slicing solution on live commercial networks. This new technology allows the company’s customers to deploy fast and secure virtual private networks (VPN) on their 4G and 5G networks. Apart from giving the end-user greater utility, this technology will improve global networks and infrastructure overall.
Best Online Brokers To Buy 5G Penny Stocks From
Interactive Brokers
Interactive Brokers has served as a benchmark for quality online trading platforms for over 30 years. It is one of the oldest brokerage services, which has revolutionized the industry multiple times. The website is also the go-to choice for professional and retail traders alike. However, due to its nature, IB is catered more towards experienced users.
The platform gives access to stock markets, forex, futures, bonds, ETFs, options, and more. All of this is available on a highly-professional platform with extensive market data and analytics. However, this premium service also comes at a premium price. In order to gain access to Interactive Brokers’ various tools, you will have to pay for them à la carte. For information like real-time market data, you will need to pay a monthly fee for each exchange individually.
Additionally, there are various commissions and fees that the platform charges. These are all in line with its positioning as a professional-oriented service. However, over the past year, IB has been making its platform more accessible by eliminating certain fees and balance requirements.
TD Ameritrade
TD Ameritrade is is another well-established online brokers, preferred by professionals and retail investors alike. This platform, however, is mostly limited to the US and a handful of other countries. As such, fewer users will be able to take advantage of its numerous features and advantages.
For those who can access the platform will be able to trade on major stock exchanges, the foreign exchange market, crypto markets, and more. The platform also offers access to the OTCBB which is great for those looking to invest in cannabis penny stocks, as most of these are listed on that market.
While TD Ameritrade’s platform is highly professional and rich in tools and features, it is not difficult to use. This is thanks to the company’s commitment to education and wide accessibility. By combining an extensive educational section with a simple design for various tools, TD Ameritrade has become the platform of choice for both seasoned and beginner investors.
Closing Thoughts
5G is definitely a technology worth investing in. Most large phone providers have already started migrating their networks to 5G, and this trend will only continue for the foreseeable future. Additionally, this expansion process will carry on for many years, as it will take different amounts of time for different countries. Furthermore, some are still on 4G or even 3G networks and have yet to start migrating. This leaves plenty of space for continued growth in the future.
Meanwhile, 5G is not limited to the switch-over to a faster internet. While greater speeds and bandwidth are a big part of this new technology, it is the opportunities it provides that give it its potential. With the advent of the Internet of Things and the wider accessibility of the internet, the modern world is becoming increasingly dependent on internet connections. 5G threatens to unseat cable connections as the dominant infrastructure method and become the main means of communication.
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