5 Best 5G Stocks to Buy in November 2021

The 5G ecosystem which includes software as well as hardware companies, is among the most prominent long-term investing themes. You can play the 5G industry through multiple stocks. Here are the five best 5G stocks that you can buy in November 2021.

1. Apple (NYSE: AAPL)

The 5G transformation is also leading to a smartphone supercycle and Apple is among the major beneficiaries. The stock has been weak this year and has also lost its position as the world’s largest company to Microsoft. Apple has been hit by the global chip shortage which cost it $6 billion in sales in its fiscal fourth quarter of 2021.

Apple is a 5G stock that Warren Buffett loves

Berkshire Hathaway’s 13F filings revealed that Warren Buffett continues to love Apple stock and the iPhone maker is the largest holding for the conglomerate. While Buffett hasn’t any new Apple shares for the last many quarters, the stock continues to remain his top holding. Meanwhile, Apple is a play on multiple themes including 5G.

Apple stock has been under pressure amid supply chain issues. However, JPMorgan believes that the situation is easing. “While visibility into pace of ramp of iPhone supply remains challenging, given limited indications of any new disruptions to the supply chain, we believe the robust lead times continue to point to healthy demand for the iPhone 13 series,” it said in its note. The brokerage particularly sees strong demand from China and believes that markets have muted expectations from the iPhone 13 sales as compared to iPhone 12 sales.

Meanwhile, Apple is among the best long-term stocks to own. The company is a play on innovation and its ability to come up with exciting products. Unsurprisingly, many see its rumored entry into electric cars as the biggest risk for Tesla.

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2. Qualcomm (NYSE: QCOM)

QCOM is among the best 5G stock as its chips enable 5G technology also. The stock has been in an uptrend after it reported earnings beat in its fiscal fourth-quarter of 2021. It reported adjusted revenues of $9.3 billion in the quarter which were 43% higher than the corresponding period in 2020 and were ahead of the $8.86 billion that analysts were expecting. The company’s adjusted EPS came in at $2.55 which was higher than the $2.26 that analysts polled by Refinitiv were expecting.

Qualcomm is a 5G play in the chip industry

Qualcomm has been increasing its capabilities in the 5G ecosystem and announced a range of new platforms to target mid-range smartphones. “These four new additions to our roadmap create significant opportunity for our OEM customers and provides additional options to continue to meet the growing demand for our 5G and 4G mobile platforms,” said Deepu John, senior director, product management, Qualcomm.

QCOM looks like a reasonably valued 5G stock

Qualcomm stock looks reasonably valued with an NTM (next-12 months) PE multiple of 15.8x, which is below the five-year average of 17.3x. Considering the continued momentum in Qualcomm’s business, the risk-reward looks attractive at these prices. The stock has a dividend yield of 1.6%, which is higher than the S&P 500’s dividend yield.

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3. Microsoft (NYSE: MSFT)

Microsoft is also among the best 5G stocks to buy. Last month the company announced that it would offer routing services and global network transport services to 5G companies. “We have developed a fast-forwarding mechanism to build a 5G overlay on our existing WAN, thereby supporting a variety of 5G network slices with different wired transport properties, while avoiding interference with the operation of the underlying enterprise cloud network,” it said in a blog post. Microsoft’s Azure, which competes with market leader Amazon, and Alphabet is also benefiting from the cloud infrastructure demand from 5G companies.

Microsoft is an ancillary 5G stock

While Microsoft is not a pure-play 5G stock, it is an ancillary play on the industry. While some analysts have been apprehensive about the company’s valuation after the massive rally over the last year, Credit Suisse sees more returns ahead for the company and initiated coverage with an outperform rating and $400 target price.

“For at least the next five years, we forecast Microsoft to deliver (1) mid-to-high teens revenue growth … and (2) high-teens to +20% EPS and FCFPS growth—driven by scale (even with accelerating investments) and ongoing share repurchases,” said a team of Credit Suisse analyst led by Phil Winslow. The note added, “We believe these levels of sustained growth and profitability are still not properly reflected in consensus estimates or valuation.”

Microsoft has seen a rerating under the leadership of its CEO Satya Nadella who has positioned the company into high growth and emerging industries. Overall, MSFT is among the best ancillary 5G stocks that you can buy in November.

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4. Qorvo (NYSE: QRVO)

Qorvo makes radio-frequency (RF) circuits that are used in both wireless and broadband communications. The stock has looked weak and trades at a YTD loss even as the broader markets have surged to new all-time highs. It released its fiscal second quarter of 2022 results earlier this week which led to a selling spree after the company warned of the impact of the global chip shortage. Intel stock too had tumbled after its recent earnings release as the company forecast that the chip shortage would stretch into 2023, a forecast which is dire than what others like Nvidia and AMD have forecast.

Qorvo is a reasonably valued 5G stock

After the recent fall, Qorvo looks like a reasonably valued 5G stock and trades at an NTM PE of 13.3x, which is lower than its average multiples over the last five and ten years. During the company’s earnings call it announced that a major base station OEM has selected it to supply RF transmit and receive path content for 5G small cells.

It also announced that it has “received initial production orders for MHB and UHB PADs, Wi-Fi FEMs, and high-performance discrete solutions enabling advanced functionality in upcoming Korea-based 5G mass-market smartphone platform.”

The market opportunity for Qorvo would be much higher in 5G as compared to 4G. With reasonable valuations and a strong long-term growth outlook, Qorvo looks among the best 5G stocks to buy in November.

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5. Nokia (NYSE: NOK)

Nokia is another good 5G stock to buy in November as has been trying to regain market share in the 5G market. Its efforts have been aided by the geopolitical environment where a lot of companies have been wary of inviting Chinese companies for the 5G telecom gear. Several countries have already barred Chinese companies from the 5G infrastructure and many others including India are expected to follow suit.

Nokia is a good 5G stock amid the current geopolitics

Nokia is aiming for a market share of 25-27% in the global 4G/5G market ex-China in 2021. The company has maintained its guidance even as it warned of “uncertainties” from the supply chain challenges. Globally, the company has a 5G conversion rate of 90% based on the end of 2018 4G footprint. The figure is ex-China and after accounting for China, the figure is in the low 80s.

Given the current geopolitical scenario, Nokia looks among the best 5G stocks to buy in November. The stock now trades at reasonable valuations and would be among the prime beneficiaries of the 5G transformation.

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