Even with the short-term fears hitting the economy right now, technology continues to develop at a rapid rate. And the implementation of new technologies takes years to play out, across multiple economic cycles.
That means that thosewho invest in these big trends during a market downturn can earn excess returns as those trends continue to grow and play out over a period of months and years.
There are many big trends today. But one that may have become overlooked is the rollout of the 5G network.
Qualcomm (QCOM), a producer of wireless communications chips, is a huge player for this market. And it’s starting to benefit from the rollout, with strong earnings and raised guidance as the company continues to gain market share.
Following its earnings beat, shares are still largely unchanged over the past year, even as earnings have jumped 38 percent, revenue is up 30 percent, and the patent-rich company has a 28 percent profit margin.
Action to take: The company is a dividend growth play with a starting yield of about 2.25 percent right now. And with shares under 12 times forward earnings, the stock still has more room to run as the 5G network rollout continues.
For traders, the October $165 calls, last going for about $7.00, offer mid-double-digit returns in the weeks ahead should shares follow through with their post-earnings rally.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
