Why this article?
At The Buylyst, I’ve been digging into 5G since 2018. Here are all the relevant Worldview articles so far:
So, why another one so soon? I’ll get straight to it. 3 reasons:
- A surprisingly bullish view of 5G by our top holding: TSMC.
- One of our “Watch” rated companies – Ciena – getting close to an “interesting” price range.
- One of The Buylyst’s 5G plays – Lumentum – is approaching its Price Target. As I write this, it has surpassed it. At some point it will need to be replaced, at least partially.
Over the past couple of weeks, I was noticing this apparent dissonance between Lumentum and Ciena. The former says 5G is accelerating sooner than expected, while the stock price of the latter is facing a downward trend. Is there an opportunity here?
So, I decided to get an undigested view of the state of 5G by listening to as many earnings calls as I could. I assembled a list of 8 companies in the 5G arena. They are:
- 1 Chip Manufacturer: TSMC – this is how it all started.
- 2 Mobile Phone Service Providers: Verizon and AT&T.
- 3 Backhaul Equipment Manufacturers: Ericsson, Nokia and Qorvo
- 2 Optical Components Manufacturers: Lumentum and Ciena
I found some common threads – three in particular:
- The China Issue.
- 5G Service Rollout.
- 5G Handset Sales.
I’ll summarize what I heard from each company regarding these 3 important data points.