5G is the latest-generation wireless network technology. Providing faster speeds and greater capacity than the previous 4G network, 5G networks started coming online in the U.S. in 2018. By the mid-2020s, about a third of Americans had 5G connections, as carriers were looking to the build-out of "5G Advanced," which is supposed to be a technological bridge to 6G services expected by 2030.

Along with the new wireless technology comes the potential for transformative technologies and applications for consumers, businesses, governments, and more. Investors may wonder how to capitalize on these developments as telecommunications companies and national governments scramble to create the largest 5G networks.

Many individual companies and larger industries stand to benefit from 5G technology, providing investors with ample prospects to profit as well. However, there are also some potential downsides to 5G that investors should be aware of, including security concerns.

What Is 5G?

Mobile 5G is best distinguished from previous wireless network technology by its speed. It operates on a larger portion of the radio spectrum to allow wireless devices to transmit signals more efficiently—about 100 times faster than 4G. The technology also allows for faster information-processing times for devices.

As of 2024, all major carriers in the U.S. have deployed 5G, covering about 200 million devices. Most new smartphones are equipped with 5G.

As with other types of wireless technology, there are also several versions of 5G technology, including millimeter wave, which offers tremendously high speeds over short distances, and low band, which provides slower speeds but a wider range.

How 5G Can Transform Our Lives

5G technology has significantly faster data speeds, reduced latency, and increased connectivity capabilities compared with its predecessors, including 4G/LTE. Indeed, one of the most compelling applications of 5G is in developing and expanding "smart cities," which leverage technology to improve infrastructure, public services, and living conditions.

With 5G technology, more devices can be connected to the network without losing performance. In smart cities, where millions of sensors and devices are constantly communicating data to manage traffic, energy, security, and other public resources, connectivity is critical.

Another potentially transformative effect is the impact of its low latency. This allows for real-time data processing and immediate response. One example entails traffic manaꦇgement systems that can adjust in real time to changes in traffic conditions, potentially reducing congestion and improving emergency resp🐼onse times.

In addition, 5G can yield more effective monitoring and maintenance of urban infrastructure. Sensors embedded in roads, buildings, and bridges that relay data over 5G networks can help detect issues such as structural weaknesses early, leading to timely repairs and reduced maintenance costs.

Companies Likely To Benefit From 5G

Major telecommunication companies like Verizon Communications (VZ), AT&T Inc. (T), and T-Mobile US Inc. (TMUS) stand to gain as they are the primary providers of 5G infrastructure and services. Moreover, companies like Cisco Systems Inc. (CSCO), Siemens AG (SIEGY), and Huawei that provide sensors, routers, and other hardware for 5G-related projects will benefit as their technology is integral to the expansion of smart cities.

Also, firms specializing in artificial intelligence and big data analytics, such as International Business Machines Corp. (IBM), Alphabet Inc. (GOOG), and Microsoft Corp. (MSFT), will likely see increased demand for their services to process and analyze the data collected from various sensors within smart cities. Furthermore, those helping to produce smart grid technology, such as Siemens, can leverage 5G to improve their offerings related to energy distribution and management.

Another industry that is expected to benefit from this transformation is automotive and mobility services. As autonomous vehicles become more integrated into public transportation systems within smart cities, companies like Telsa (TSLA), General Motors (GM), and mobility service providers like Uber Technologies (UBER) could benefit from the robust connections offered by 5G.

How To Invest in 5G

One immediate way to invest in 5G is to target telecommunications and technology companies likely to make popular 5G-capable devices. Major wireless networks like Verizon or T-Mobile have worked in recent years to set up large 5G networks to entice and retain customers seeking higher speeds and the latest technology. However, there are also many ways to invest in 5G beyond internet companies.

Companies building popular 5G-enabled devices and companies that provide critical components of those devices, such as chips or 3D inspection systems, are another possible access point. Cloud computing companies; providers of network access infrastructure, hardware, and services; and fiber-optic technology companies stand to benefit from the new technology. Further afield, companies developing self-driving car technology, virtual reality systems, rᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚob🍰otics, and similar technologies could also benefit, albeit less directly.

Investors have many ways to access the investment paths above. Individual equities are always a possibility. Investors searching for greater diversity may wish to focus on mutual funds, ETFs, or real estate investment trusts (REITs) targeting this area.

Investors can choose broader vehicles within these options, such as the Technology Select Sector SPDR ETF (XLK), which targets all tech stocks in the broader S&P 500. Investors can also target an industry more directly linked to 5G. The Pacer Benchmark Data and Infrastructure Real Estate SCTR ETF (SRVR) is an example. It's an ETF investing in data center and cellphone tower REITs.

What Are The Risks of Investing in 5G?

Investing in 5G carries risks for investors. For instance, the U.S. Federal Aviation Administration has cautioned that there are potential safety issues due to the possibility of interference related to 5G services using a part of the radio spectrum near that used by airplanes. Airlines and wireless network providers have strong incentives to resolve any safety concerns related to 5G technology, but it is an ongoing situation.

In addition, as power grids, factories, oil refineries, hospitals, and other infrastructure systems adopt 5G technology, there are potential vulnerabilities to cyberattacks by hackers.

What Is 5G Advanced?

5G Advanced, also known as 5.5G, is in the works, with releases planned for later this decade. It would represent a significant leap forward in mobile technology, building upon the foundation of existing 5G networks. This evolution is formally defined in 3GPP Release 18, finalized in mid-2024, and aims to bridge the gap between 5G capabilities and the future 6G technology.

One of the most notable advances of 5G Advanced is its substantial upgrade in network performance. Users can expect download speeds of up to 10 Gbps, a significant increase from standard 5G—which aimed at far higher than 10Gbps but generally delivers half that at best. This faster speed is complemented by improvements in massive multiple-input, multiple-output technology, a type of wireless 澳洲幸运5官方开奖结果体彩网:telecommunication where base stations are equipped with many antenna elements to give it better spectral and energy efficiency. In sum, it can handle more data streams simultaneously, resulting in better connections even in crowded areas.

In addition, 5G Advanced is expected to provide higher-pre♛cision positioning, offering centimeter-level accuracy for applications in logistics, asset management, and other industries that require precise locaಞtion tracking.

Energy 澳洲幸运5官方开奖结果体彩网:efficiency is another focus of those behind the build-out of 5G Advanced. The technology introduces features that allow devices to enter low-power states when idle, significantly reducing battery drain. On the network side, cell towers can now adjust their output power or enter sleep mﷺode when not actively serving devices, improving energy use and reducing the network's environmental impact.

5G Advanced is designed to support many new applications and use cases. It offers improved support for extended reality applications, including 澳洲幸运5官方开奖结果体彩网:augmented, virtual, and mixed reality (AR, VR, and MR). The technology is also expected to improve connect🌳ivity for industrial applications, enabling gains in autonomous robots, smart factories, and real-time monitoring systems. In addition, 5G Advanced enhances support for nonterrestrial networks (NTN), extending connectivity to remote and underserved areas through improved satellite communications and drone technology.

The development of 5G Advanced is structured in multiple phases. Release 18, which backers aim to complete in 2024, introduces foundational elements for the breakout of 5G Advanced. Release 19, scheduled for completion by 2026, will continue to build on these changes.

The Bottom Line

5G wireless technology is the fastest yet. While it promises to be transformative and presents exciting possibilities for investors, it does carry risks and likely will not be fully put in place until the end of the 2020s, though more smartphones already use it than LTE/4G. 5G offers faster speeds, lower latency, and greater capacity than its predecessor. This technology supports many applications, from improved mobile broadband and ultra-reliable, low-latency communication to massive machine-type communication, which is essential for the 澳洲幸运5官方开奖结果体彩网:Internet of Things. 5G's ability to deliver gigabit speeds and support many connected devices per square kilometeꦇr will transform consumer and industrial applications.

5G Advanced, or 5.5G, the next phase of 5G, builds upon the foundational capabilities of 5G by incorpor🐎ating AI and machine🐲 learning, network slicing, and advanced spectrum sharing, which are expected to better improve network resources and the ability to provide more tailored services for users. 5G Advanced aims to bridge the gap between 5G and the eventual 6G standards.