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5G and its impact on the tech stock sector

5G is the fifth generation of cellular networks. It runs on the same radio frequencies that are currently being used for your smartphone – on WI-FI networks and using satellite communications – but promises reliability, faster connectivity speeds, ultra-low latency, greater bandwidth, and can run up to 100 times faster than the current 4G.

5G is more than just a network connection, as its lag-free guaranteed connections will allow billions of devices to connect together and communicate in real-time. But the question remains: what impact does 5G have on the technology stock sector?

Read on to find out more.

The evolution of mobile technology generations

In 1980, the 1G era was born, with briefcase-sized phones and short, small conversations being had by a small number of professionals.

As technology developed, 2G was introduced, making 1990 the year that saw a huge demand for mobile services, with voice calls and SMS being made available. In the 2000s, mobile phone users could remotely browse the internet with devices that could finally fit in your pocket.

10 years down the line, in 2010, 4G took mobile data to another level. With mobile video consumption and higher data speed, 4G paved the way for the future of 5G in 2020. 5G has completely reshaped our lives, allowing the creation of technology that can enhance experiences, create augmented reality, and even drive the digitalisation of industries.

The tech stock sector

The technology sector is the category of stocks that relate to the research, development, or distribution of technology-based goods or services. The sector is made up of businesses that sell goods and services in electronics, software, computers, artificial intelligence (AI), and any other industries related to technology.

It’s often deemed as one of the most attractive growth investments, due to the high demand of information technology in the modern society, and technology, such as 5G, allowing us to bring more once-futuristic ideas to life.

In 2020, despite economic struggles and the uncertainties faced by the implications of the global Coronavirus pandemic, deep tech investment rose by 17% in the UK, which was the highest rate of growth anywhere in the world.

There’s no wonder that tech stock trading is so popular amongst investors. The technology sector can offer stability, with promising progression (as shown by previous years), and an increasing demand to be able to communicate with our loved ones more efficiently from afar.

The impact of 5G

Not only is it hoped that the sales of 5G networks will lead to a total of $488 billion in parts of Europe by 2030 — boosting the economies significantly — but it will also have a positive impact on employment. By enhancing jobs within the workforce, as well as helping companies to communicate more efficiently, work remotely, and become digitised, 5G will lead to even more opportunities for work and business growth.

On top of this, 5G will provide factories and cities with more connectivity and intelligence than ever before, as well as increasing efficiency and reducing the need for people to move around so much. This could reduce emissions of 33 million tonnes of carbon dioxide across five countries in 2030.

5G and stocks

The 5G market is estimated to reach $277 billion by 2025. With the endless potential for this new technology, and more companies and the general public relying on it, the tech stock market is expected to spike over the next few years. Investors are likely gaining exposure to the promising market, in the hopes of making profit from the ever-growing industry.