From Stansberry Research:
There have been three industrial revolutions in America over the past 200 years.
And at the heart of each one is a core technology that drives all other technologies in the revolution.
First came the steam engine. This was critical because it powered a new generation of factories, ending our reliance on water power. It enabled us to build factories anywhere in the country.
Next came the harnessing of electricity. It powered the light bulb, refrigerators, washing machines, and air conditioning. Electricity forever changed communication as it made technologies like the telegraph and telephone possible.
Then came the digital age.
The critical technology at the heart of this revolution was the Internet. The Internet paved the way for world-changing inventions such as smartphones, mobile payments, online banking, social media, and revolutionary businesses like Apple (AAPL), Google's parent company Alphabet (GOOGL), Netflix (NFLX), and Amazon (AMZN).
Now, we are entering the fourth industrial revolution in America. And just like the ones that came before it, a new and critical technology lies at the core that could make early investors wealthy...
5G will be so big and so powerful, it will single-handedly drive all other technologies over the next several decades.
This new technology is all about one thing: sending massive amounts of data across the Internet at incredibly fast speeds...
The concept might seem basic, but there is nothing basic about it. 5G isn't just an upgrade. Compared with 4G that we have today, it's night and day... And telecommunications-equipment company Qualcomm (Nasdaq: QCOM) is perfectly positioned to benefit from this trend.
Qualcomm earns its revenue by making wireless computer chips and collecting royalties on its patent licenses.
The company has been a fundamental part of 3G and 4G networks, and its technology will serve as the backbone for 5G.
In 2018, Qualcomm ran 5G tests in two cities. In Frankfurt, Germany, the simulations showed a roughly 900% increase in download speeds over 4G. And in San Francisco, the simulations showed increases of nearly 2,000%.
5G's speed will allow for a near-real-time communication link...
Take autonomous cars, for example. If the communications link is near real-time, you can basically control the car remotely. This decreases the cost per car since much of the processing power can be in the "cloud."
Qualcomm is already making waves in this space. It partnered with Ford Motor (F) to help cars connect to each other and with everything around them like traffic lights, street signs, and roads. This week, at the Mobile World Congress event in Spain, Qualcomm announced a new set of chips that will do this, as well as 5G chips for personal computers and home broadband.
However, these higher speeds come at a cost.
Cellphone carriers will need to build hundreds of mini cellphone towers in and around urban areas. They may even have to mount small antennas on streetlights, telephone poles, and building rooftops. These "small cells" will blanket the coverage areas, helping to propagate the 5G signals indoors.
On top of all that, the cell carriers will need to upgrade their existing base stations and antenna arrays. And they'll need new smartphones with chipsets that are 5G-capable.
There are about 2.5 billion smartphone users around the world. Starting this year, many of these consumers will gradually replace their devices with 5G-capable ones. Smartphone makers will need to start obtaining chips this year to put into the handsets.
Qualcomm is already a leading chipmaker for wireless devices. In fact, you may have several chips made by this company in your smartphone already. And now Qualcomm is making the type of chips necessary for the 5G buildout.
Basically, there's a lot of new equipment needed for 5G... And Qualcomm will provide it.
Over the fall, a sell-off in tech stocks hit the company and other silicon chipmakers hard. Qualcomm reported a loss of 7% in the third quarter and 3% in the fourth quarter. This could be from a combination of things, including a licensing dispute with iPhone maker Apple (AAPL) and a slowdown in manufacturing due to the ongoing "trade war" with China.
Still, with shares trading about 30% below their September highs... plus our long-term outlook of Qualcomm's opportunity in 5G... and the stock's huge 5% yield... we believe there's big upside potential for investors who buy today.
Sometimes investing is simple.