CNBC’s Jim Cramer on Friday called the coming of 5G wireless networks one of the most exciting investment themes of the year.
With the rollout of the latest generation of connectivity, the fourth generation of wireless technology that was introduced in 2010 will be replaced with one that will make possible the Internet of Things on a large scale.
Expected is a deluge of physical objects, embedded with sensors, software and other technologies, that will be able to connect to networks while using less power. The 5G rollout will also require more bandwidth.
“We’ve been getting ready for the big 5G buildout for years. It really got rolling last year, but now it’s got the momentum we need to invest in,” Cramer said on “Mad Money.” “I want to give you a variety of different ways to play it, which is why we’ve created the Mad Money 5G ETF, made from 10 of my favorite 5G names.”
Cramer’s “Mad Money 5G ETF” compiles his favorite 5G-oriented names. The basket of stocks includes a wireless carrier, cell phone tower developer, two hardware makers, four semiconductor companies, a cybersecurity firm and a cloud content provider.
Below are key takeaways driving Cramer’s thinking of the 5G space:
Carrier: T-Mobile
- Investments in the 5G landscape puts them in a great position going forward
- Announced new multibillion-dollar agreements with Ericsson and Nokia to expand more
- Stock is 6% below 52-week high
Cell tower: Crown Castle
- Spent many years and billions of dollars building out 5G network infrastructure in densely populated areas
- Investments have yet to pay off in a 4G world
- Stock is 12.64% below 52-week high
Hardware: Apple
- Launched the 5G enabled iPhone 12 in September
- Poised to benefit from a huge 5G upgrade cycle
- Stock is 8.39% below 52-week high
Speculative hardware: Inseego
- Makes 5G infrastructure, including 5G mobile hotspots
- Cleaned up the balance sheet
- Stock is 21.38% below 52-week high
Semiconductor: Marvell Technology
- Makes chips for networking, communications and storage
- Has explosive 5G growth
- Stock is 2.25% off 52-week high
Semiconductor: Qualcomm
- Technology platform is essential for 5G networks to actually work as advertised
- Spent years developing product and fighting some customers, such as Apple, in court
- Stock is 3.73% below 52-week high
Semiconductor: Skyworks Solutions
- 5G cellphones need a lot more Skyworks components than a 4G phone
- A huge Apple supplier
- Stock is 8.43% below 52-week high
Semiconductor: Taiwan Semiconductor Manufacturing
- Strategically positioned as a manufacturer for semiconductor design companies
- Boosting capital expenditure budget to help make up for the current chip shortage
- Stock is 3.84% below 52-week high
Cybersecurity: CrowdStrike
- A cloud-native cybersecurity provider protecting networks connected to 5G devices
- Businesses need solutions that can scale, such as CrowdStrike
- Stock is 7.98% off 52-week high
Cloud content: Fastly
- Next-generation content delivery network for digital media companies
- With a new president taking over, there’s less threat of a ban on client TikTok
- Stock is 35.38% below 52-week high
Disclosure: Cramer’s charitable trust owns shares of Crown Castle, Marvell Technology and Apple.
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