CNBC’s Jim Cramer on Friday named the adoption of 5G cellular networks as one of the most exciting investment themes of the year.
With the introduction of the latest generation of connectivity, the fourth generation of wireless technology introduced in 2010 will be replaced by one that enables the Internet of Things on a large scale.
Expect a deluge of physical objects embedded in sensors, software, and other technologies that can connect to networks with less power. The 5G rollout also requires more bandwidth.
“We have been preparing for the big 5G buildout for years. It really started last year, but now it has the momentum we need to invest in,” Cramer told Mad Money. “I want to give you different ways to play it. That’s why we created the Mad Money 5G ETF, which is made up of 10 of my favorite 5G names.”
Cramer’s “Mad Money 5G ETF” compiles its favorite 5G-centric names. The basket of shares includes a cellular operator, a cell phone tower developer, two hardware manufacturers, four semiconductor companies, a cybersecurity company and a cloud content provider.
Here are key takeaways that will make Cramer think about 5G space:
Carrier: T-Mobile
- Investing in the 5G landscape puts them in an excellent position for the future
- Announcing new billion dollar agreements with Ericsson and Nokia for further expansion
- The stock is 6% below its 52-week high
Cell towers: Crown lock
- We have spent many years and billions of dollars building 5G network infrastructure in densely populated areas
- Investing in a 4G world has not yet paid off
- The stock is 12.64% below its 52-week high
Hardware: Apple
- Launched the 5G-enabled iPhone 12 in September
- Ready to take advantage of a huge 5G upgrade cycle
- The stock is 8.39% below its 52-week high
Speculative hardware: Insego
- Builds 5G infrastructure, including 5G mobile hotspots
- Balance sheet adjusted
- The stock is 21.38% below its 52-week high
Semiconductor: Marvell technology
- Makes chips for networking, communication and storage
- Has explosive 5G growth
- The stock is 2.25% off its 52-week high
Semiconductor: Qualcomm
- The technology platform is essential for 5G networks to actually work as advertised
- Spent years developing products and fighting some customers like Apple in court
- The stock is 3.73% below its 52-week high
Semiconductor: Skyworks solutions
- 5G phones require a lot more Skyworks components than a 4G phone
- A huge Apple supplier
- The stock is 8.43% below its 52-week high
Semiconductor: Taiwan semiconductor manufacturing
- Strategically positioned as a manufacturer for semiconductor design companies
- Increase in the investment budget to compensate for the current chip shortage
- The stock is 3.84% below its 52-week high
Online Safety: CrowdStrike
- A cloud-native cybersecurity provider that protects networks connected to 5G devices
- Companies need scalable solutions like CrowdStrike
- The stock is 7.98% off its 52-week high
Cloud content: Fast
- Next generation content delivery network for digital media businesses
- With the takeover of a new president, there is less risk of the customer TikTok being banned
- The stock is 35.38% below its 52-week high
Disclosure: Cramer’s charitable foundation owns shares in Crown Castle, Marvell Technology, and Apple.
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