Bank of America named several U.S. chip stocks that will ride higher on the back of 5G, a technology the bank sees booming in 2021.
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Several semiconductor stocks are set to benefit from what Bank of America says will be a big trend as countries recover from the pandemic: 5G.
Semiconductors, or chips, are vital components of smartphones and are also part of the infrastructure necessary for 5G technology — the next generation of mobile internet, with extra-fast download and upload speeds.
“5G could be the ultimate ‘reopening’ theme, as consumers venture out and demand faster cellular broadband coverage and capacity versus last year’s dependence on Wi-Fi,” the bank’s analysts, led by Vivek Arya, wrote in a note published Wednesday. Only around 20% of smartphones had 5G technology last year, but that is set to increase to 40% in 2021, the bank estimated.
Given that backdrop, Bank of America identified some favorite semiconductor stock picks.