Editor’s Note: The rollout of 5G – the latest tech development in network connectivity – stops for nothing. Not even a pandemic.
In fact, as we’ll hear today from Matthew Carr, editor of our sister e-letter Profit Trends, the quarantines made necessary by the COVID-19 pandemic have only made 5G’s rise more urgent.
In fact, 50% of Americans are expected to gain access to 5G in 2020 notwithstanding the pandemic.
Take a look at Matthew’s analysis below for a first look at how our current crisis is making 5G network rollouts more important than ever.
– Mable Buchanan, Assistant Managing Editor
In March, Americans had their lives upended.
Streets emptied, and businesses closed up shop.
Entire workforces shifted online.
Elementary schools, high schools and universities locked their doors. But students are still attending classes remotely.
The global COVID-19 pandemic brought the real world to a screeching halt.
But while empty cubicles gather dust and schoolyards remain quiet, the digital realm is thriving.
It’s fascinating that this metamorphosis was already underway. COVID-19 is just speeding up the pace. And I don’t think there’s any going back.
So investors need to prepare their portfolios for this new world order… if they haven’t already.
Stay-at-Home Economy Brings Home the Bacon
The COVID-19 economy is already crowning winners.
And many of those are from the “stay-at-home economy.”
Amazon (Nasdaq: AMZN) shares are trading at all-time highs. The online retailer is furiously shipping packages to shut-in consumers who are in a buying frenzy.
Plus, earlier this week, shares of Zoom Video Communications (Nasdaq: ZM) were up 165% year to date!
That obliterates the negative returns of the Dow Jones Industrial Average and the Nasdaq in 2020…
Conference calls and board room meetings have been replaced by Zoom meetings. Even Friday nights out with friends have moved to Zoom, BlueJeans, Houseparty and other videoconferencing apps.
And despite the lagging broader indexes, shares of video game stocks, like Activision (Nasdaq: ATVI), Electronic Arts (Nasdaq: EA) and Nintendo (OTC: NTDOY), are setting new 52-week highs.
The same is true for Netflix (Nasdaq: NFLX). Entertainment is key.
We may be stuck inside, but we’re not alone. We’re still connected. And we have plenty of ways to stave off boredom.
In fact, the latest Verizon (NYSE: VZ) network report illustrates just how much our data usage is changing.
Overall data use across Verizon’s network is up 19% compared with pre-COVID-19 levels. Though peak usage per day is up considerably more than that across various categories.
For instance, peak video use is up 26%, web traffic is up 30%, downloads are up 56% and gaming is up 71%.
Verizon believes this sustained network usage will be with us for the foreseeable future.
And I agree.
I believe COVID-19 will have lasting impacts on our lives long after the pandemic has subsided. And I think we’re witnessing the speeding up of trends that were already underway.
Namely, technology is the true winner in all of this, as it worms its way deeper into all facets of our lives.
For example, according to a recent Gartner survey, after COVID-19 passes, only 26% of companies won’t keep a substantial portion of their workforce remote…
And almost half of all of the companies surveyed plan to maintain at least 10% of their workforce as telecommuters after the pandemic is over.
That means, with the new world we have before us – where remote work is increasing, videoconferencing use is rising, and video games and esports are surging – faster, more robust networks will be imperative.
Thankfully, the world was already laying down the framework for this reality. Though the transition was expected to take years, not months or weeks.
The $11.2 Trillion Adoption in Overdrive
2020 was already set to be the “Year of 5G.”
This is the year that big nationwide rollouts were planned for the next-gen network.
It’s estimated 200 million 5G smartphones will ship in 2020.
Verizon expects 50% of Americans will gain access to 5G this year.
AT&T is preparing for up to 153 million customers to upgrade to 5G this year.
And more than 230 types of 5G devices are either already launched or in development.
My colleague Dave Fessler and I have spent much of the last year preparing investors for the arrival of 5G. In 2019, dozens of cities around the world – from New York and London to Tokyo and Berlin – deployed networks.
But we knew this was merely the beginning.
The outlook for 5G is jaw-dropping.
CCS Insight projects that there could be more than 1 billion 5G customers by 2023 and more than 2.5 billion by 2025…
And by 2026, 5G sales are projected to top $11.2 trillion.
But I think this adoption is going to happen sooner than we originally thought.
We are at the dawn of the 5G revolution. But the massive changes to our daily lives – the complete upheaval from the real world into the digital realm due to the COVID-19 pandemic – will quicken the charge.
We know 5G is going to be magnitudes faster than the generations before it. However, in our new world, this is no longer a luxury but a necessity. And necessities are where investors secure the best long-term gains.