With one stroke of the pen . . .
President Trump has dealt China a major blow. It’ll stop the #1 Chinese telecom from winning contracts to build out 5G in America.
And it will almost guarantee big profits for these American 5G stocks.
So, what exactly is 5G? And why is it important?
5G is the next-generation wireless network. And it promises to allow your smartphone to download at 100X faster than current 4G networks.
It’s estimated that 5G will launch a $12.3 trillion global growth opportunity for goods and services. That makes it one of the biggest growth markets in the world.
President Trump recently signed an executive order . . .
Executive Order on Securing Information and Communications Technology
The executive order does NOT specifically name China . . . or any specific companies. However, the message was very clear.
Trump doesn’t want Chinese companies installing hardware for the new 5G wireless network in America.
One Chinese company named Huawei is the target of the order. It’s the biggest telecommunications company in the world, with annual sales of $105 billion.
With Huawei locked out of the 5G market . . . five American companies could dominate the 5G deployment. Go here ASAP for urgent details.
Huawei claims to be an “independent” company. But White House officials are skeptical.
The Central Intelligence Agency (CIA) claims that Huawei has received funding from China’s People’s Liberation Army, China’s National Security Commission and a brand of the state intelligence network.
Additionally, China’s 2017 National Intelligence Law requires Chinese citizens and companies to cooperate with state intelligence work.
Here is President Trump’s big concern…
U.S. wireless carriers including AT&T (NYSE: T) and Verizon (NYSE: VZ) are upgrading their networks to implement 5G. They may consider using hardware from Huawei to build out those networks.
If Huawei provides the hardware to the U.S. 5G market, it would be able to monitor the data that’s flowing through those wireless networks.
Now, 99.9% of that data isn’t sensitive. For example, does it really matter if the Chinese government knows your Netflix history? Or can see what you’re doing on Facebook? It may be a little creepy. But it’s not exactly a national security issue.
However, access to U.S. networks could jeopardize national security . . .
Because these same new 5G networks could be used by government officials for communications. And that means China could easily increase the effectiveness of its cyber espionage activities.
Plus, these new 5G networks will certainly be used by U.S. companies. China already has a long history of stealing intellectual property from American companies. Giving them access to the 5G network could create even more problems.
That’s why Trump signed this executive order to block China from supplying hardware to the 5G market.
This decision will force AT&T and Verizon to reply upon U.S. companies for their 5G needs. And that could send shares of these five stocks surging in 2020.