We recently compiled a list of the 10 Best 5G Stocks To Buy According to Short Sellers. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other 5G stocks.
5G, or fifth-generation wireless technology, is the latest evolution in mobile networks, which is designed to significantly improve speed, reduce latency, and enhance the capacity and connectivity of mobile devices. A Market Research Future report estimates that in 2024, the 5G market is projected to be worth $15.03 billion, and by 2032, it could reach $229.41 billion. This rapid increase represents a compound annual growth rate (CAGR) of 40.60% during the forecast period. According to some experts, 5G is one of the most important trends in technology along with artificial intelligence (AI).
5G and AI Could be Catalysts of Global Digital Transformation
In a CNBC interview at the Mobile World Congress Shanghai on June 26, director-general of the GSM Association, Mats Granryd highlighted the deep connection between 5G and AI and suggested that their mutual rise is not accidental. He said that “AI feeds off 5G and 5G feeds off AI.” This is especially evident in China, where the development of standalone 5G networks is well advanced and discussions are already shifting toward 5G Advanced (5.5G). While some countries lag, like the Philippines, Mats pointed out that this dynamic between 5G and AI is most prominent in regions with widespread 5G coverage.
When asked about the rivalry between countries like the U.S. and China in AI and 5G, Mats said that such competition is insignificant. He said that from his experience on the GSMA board, which represents the 25 largest mobile operators globally, the focus is on creating common standards and specifications rather than competing.
He talked about the difficulties of the 2G and 3G eras when different technologies created challenges for global connectivity. The shift to a unified 4G standard was a pivotal moment that laid the foundation for the digital economy.
Mats believes that 5G will follow a similar path to become a common platform worldwide, which will also extend to AI. While some regions may advance faster than others initially, he showed confidence in the fact that everyone will eventually catch up and benefit from the integration of AI with 5G.
Our Methodology
For this article, we used stock screeners and ETFs to identify companies involved in the 5G market. We then selected 10 stocks with the smallest short interest and listed them in descending order of their short interest. We also mentioned the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Short Interest as % of Shares Outstanding: 0.77%
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is a leading American multinational technology company headquartered in Cupertino, California. It is known for its innovative consumer electronics, software, and services, and is best known for its flagship products including the iPhone, iPad, Mac computers, Apple Watch, and Apple TV. The company also offers a suite of services such as Apple Music, iCloud, and Apple Pay. It takes the 3rd spot on our list of best 5G stocks according to short sellers.
Apple’s (NASDAQ:AAPL) 5G journey started with its iPhone 12 in 2020 and it supported more 5G frequencies than any of its competitors in the market. While the company still uses Qualcomm modems, KGI Securities analyst, Ming-Chi Kuo believes that the company has plans to launch two iPhone models with its in-house 5G modem in 2025.
Apple (NASDAQ:AAPL) took the first major step toward the development of its modems when it agreed to acquire the majority of Intel’s smartphone modem business for $1 billion in 2019. The acquisition brought around 2,200 Intel employees, intellectual property, and equipment to Apple. Ming-Chi Kuo believes that a fourth-generation iPhone SE in the first quarter and a new ultra-thin iPhone 17 in the third quarter could have the company’s own modems.
In the second quarter, 184 hedge funds had stakes in Apple (NASDAQ:AAPL) at a combined value of $124.175 billion. As of Q2, Berkshire Hathaway owns 400 million shares of the company, worth $84.25 billion, making it the most prominent shareholder.
Mar Vista Investment Partners, LLC stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
“Investors were reminded of the strength of the Apple Inc. (NASDAQ:AAPL) ecosystem as management demonstrated how generative AI solutions would be integrated into Apple’s 1.2 billion iPhone installed base. Apple plans to integrate generative AI features into its iOS 18, which will be broadly released in the fall with the iPhone 16. We believe Apple should benefit from generative AI as it will spur a meaningful iPhone upgrade cycle and create new avenues of monetization through its app store and advertising offerings. We believe this will support intrinsic value growth that will range between high-single-digits and low-double-digits over our investment horizon.”
Overall AAPL ranks 3rd in our list of the best 5G stocks to buy according to short sellers. While we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
