On August 2, 2018, Apple (AAPL) became the first U.S. company to reach $1 trillion in market cap…
That’s a “1” with 12 zeros after it.
When the iPhone maker crossed that mark, it was a big, hyped event. It made all the major news outlets.
Then, online-retail juggernaut Amazon (AMZN) surged past that market cap a month later, on September 4, 2018. Tech giant Microsoft (MSFT) joined the $1 trillion club in April of this year. And Google’s parent company Alphabet (GOOGL) has a good shot of being worth more than $1 trillion soon.
Think about that list for a moment…
There’s no carmaker on that list. No big manufacturer like General Electric (GE). There’s no oil company, no mining company, no steel company, and no banking company.
The market has spoken…
Technology – with its ability to create smartphones, software, time-saving apps, social media platforms, online shopping experiences, and the like – is now the most dominant, most valued part of our economy.
If Apple, Amazon, Microsoft, and Google are the tallest skyscrapers – the commanding heights of our “economic city” – it’s no exaggeration to say their foundations rest on the bedrock of our communications grid… also known as the Internet. Without this bedrock, those skyscrapers would crash to the ground.
As you read this, the next trillion-dollar companies – the next Amazon, the next Google, and others – are being hatched in research facilities and garages around the world. These firms will change the world and revolutionize our economy.
And just as the businesses of Apple, Amazon, Microsoft, and Google can’t function without the Internet, the next generation of world-changing, $1 trillion mega winners can’t survive without the subject of today’s essay.
As I will explain, it’s the bedrock our future will rest on… and it’s a giant investment opportunity for you to capitalize on right now.
Think of the Internet buildout of the 1990s as the construction of a vast network of toll roads…
These toll roads linked friend to friend… family member to family member… and, most important from a capitalist’s point of view, business to consumer. Millions upon millions of people wanted to send their messages, data, and advertisements over the Internet’s toll roads. It was a communications revolution.
History shows building the revolution’s toll roads was incredibly profitable…
Cisco (CSCO), the leading maker of networking equipment, enjoyed a 34,000% increase in market value during the 1990s. Intel (INTC), which made computer chips, saw its stock soar more than 3,500% during the 1990s. EMC, which made data storage devices, saw its shares advance more than 80,000% during the 1990s.
As incredible as the Internet’s first toll roads were, their size and capacity pale in comparison to the next generation of toll roads… which will lead to your doorstep soon.
They go by the name of “5G.”
The path to the 5G wireless communications network began 46 years ago…
The first cellphone call in history happened on Tuesday, April 3, 1973, as a test from Motorola. By the 1980s, cellphones were creeping into the cars of wealthier individuals…
The first devices weighed a couple of pounds and were bigger than your head – they are referred to as “bricks” for a reason – but they did what had never been done before. The first generation of mobile technology kicked off the trend toward an increasingly connected world.
The second generation of networks (2G and 2.5G) began in the 1990s. They gave us the ability to text, another step forward in communication. We now take texting for granted, and indeed, a lot of people text more than they make actual phone calls.
The move into the new millennium was accompanied by the move to 3G. With the third generation, devices could access broadband technology, which made it possible to enjoy entertainment, browse the web, and shop on a mobile device. (A whole generation of people now find it hard to believe that 20 years ago, no Amazon app existed to instantly reorder your toilet paper.)
Just as semiconductors were part of the infrastructure for the Internet, they were also the backbone of the move to 3G. As a result, chip stocks made big moves during this era. Qualcomm (QCOM) rallied more than 1,000% in the 1990s ahead of when the 4G networks started to appear.
The fourth generation of wireless connectivity gave us the ability to stream videos without waiting for buffering. This opened up business opportunities for content companies like Netflix (NFLX). Still, the biggest advancement was real-time information, which led to the “sharing economy.”
Mobile devices could talk to other devices in real-time, connecting people instantaneously. Without real-time data transfer, Uber Technologies (UBER), Grubhub (GRUB), or any other company whose app relies on a fast connection wouldn’t exist today.
Once again, the 4G phase led to big investment returns. Cell-tower companies enjoyed huge rallies, for example. As more data was transmitted with the increasing use of video, we needed new and better towers.
But the most advanced breakthrough of all is right around the corner…
Investors have another chance to make several times their money as the Internet evolves. In fact, I believe the opportunity is even bigger now because the next leap forward will drive some of the most powerful tech trends the world has seen.
I think of it as the next-generation toll road. The road to the future passes through 5G, and it’s time to set up our booth and start collecting.
The next-generation network will take speeds to levels that seem almost unimaginable…
How fast? Well, the current 4G network clocks in at around 100 “megabits” per second, which is extremely fast compared to 3G. (A megabit is a unit of measurement for data size.) But once 5G rolls out, that number will jump to 10,000 megabits per second – or 100 times faster than the current speed.
Now, my phone and iPad already stream videos nearly flawlessly, so why do I even need the speed to be 100 times faster?
Well, it will eliminate those slow connections we run into at times, which is nice enough… But what’s really about to happen is that phones and mobile devices are about to become mobile supercomputers.
The big breakthrough will be the ability to connect a lot more devices that share large amounts of data in real-time. So if you think we live in a connected world already, just wait.
One breakthrough industry in particular cannot exist without 5G…
Autonomous vehicles (“AVs”).
Investors who were able to get in early during prior transformational trends profited at 20 to 50 times their money. That’s why the AV/5G megatrend is one current transformational trend that cannot be ignored.
The full rollout of the 5G network will provide the much-needed communications infrastructure for automakers to introduce AVs to the masses. Once again, reliability and real-time data sharing make this possible…
Imagine a self-driving car going down the highway at 75 miles per hour and the network suddenly experiences a 100-millisecond delay.
In any other circumstance, you would never notice such a small delay. But it could be devastating in an AV. It could result in the braking system stopping the vehicle 10 feet beyond where it would have otherwise. That extra 10 feet could lead to a major accident.
Future AVs will essentially be data centers on wheels. The amount of data stored in the brain of the vehicle will be beyond what we can imagine.
Investment bank Morgan Stanley (MS) predicts that a 2050 AV will produce 40 terabytes (TBs) per hour. Today, your iPhone produces data in the range of 1-2 gigabytes (GBs) per month. That would mean an AV in 2050 will produce about 20,000 times more data in one hour than your iPhone currently produces in an entire month!
This is crucial because AVs will need to make decisions constantly. The AV will have to take in data from sensors surrounding the vehicle and instantaneously decide when to accelerate, brake, turn, and more.
Not only will the vehicle need 5G for computing within itself, but it will also use it to talk to the sensors in other vehicles, the roads, cell towers, satellites, and even smart cities.
Things like vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) technology are impossible without widespread 5G. The current 4G network is great for streaming videos, but the speed and latency would create major safety issues for AVs.
That’s why it’s time to get in position now…
You can see how 5G networks will pave the way for so many breakthrough innovations. I’m not just talking about faster phones… I’m also talking about self-driving cars, smart homes and cities, VR, health care, and so much more.
When exactly does all of this excitement happen?
It’s already starting.
You may have seen advertising for 5G home Internet service in limited cities. Some of the early advertising from Verizon (VZ) came under criticism for calling it that because it doesn’t operate on the agreed-upon 5G standard. That will come by the end of this year, as it expands to other cities. Smartphone makers are already rolling out the first 5G-enabled phones.
So we’re already seeing the first stages, and the pace will only pick up from here. That’s true of the stock prices, too, which will move ahead of specific developments.
Long-term winners in this sector will be 5G gear makers like Nokia (NOK), 5G infrastructure providers like Crown Castle (CCI), and specialized chipmakers like Skyworks Solutions (SWKS).
Consider this short list a jumping-off point for 5G ideas, but by no means a complete or static guide…
The early days of any technological revolution are full of change. My advice is to follow this sector closely, study it frequently for emerging winners, and own a handful of companies to get a good blend of risk and reward.
Best regards,
USA News Group
Editorial Staff
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