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The incredible growth in the wireless industry since the turn of the century is truly staggering. The massive increase in data bandwidth since 2000 is only overshadowed by the incredible leap in technology for users. To put things in perspective, the first camera and touch screen phones came out in 2002, followed by the first BlackBerry phone in 2003, and Motorola released the Razor in 2004. Now smartphones are ubiquitous and incorporate everything from audio, video and data to Bluetooth and Wi-Fi capability, and offering thousands of functionality applications.

5G stands for fifth generation, which will be the new standard for mobile telecommunications service that promises to be significantly faster than today’s 4G technology. 5G technology will utilize a higher-frequency band of the wireless spectrum called millimeter wave. That allows data to be transferred much more rapidly than the lower-frequency band dedicated to 4G. The downside is that millimeter wave signals don’t travel as far: The new 5G networks will require many more but smaller antennas spaced closer together than previous wireless generations.

The latency and speed difference should be staggering, but a new Jefferies report makes the case that while the 5G technology will provide much better capability, the capital expenditures from the wireless may be more muted than previous cycles. The report noted this:

We’re negative on prospects for a 5G investment “cycle” from wireless operators. Based on our analysis, we think the return on investment associated with 5G capex investments is significantly less attractive than it was for prior 3G and 4G investments. Hence, we expect that any 5G cycle will be muted – at least over the next 2-3 years until business models further develop. The major difference between 5G and previous generations is that the Wireless Service market is now a mature business. As such, operators’ motivations for major capital investments may be reduced. To be clear, we still believe that 5G infrastructure deployment will happen. We expect that it will simply be a cutover of existing 4G spending to 5G. Most importantly, we don’t expect the overall capex expenditure pie will grow due to 5G technology availability.

So should investors look for an investment angle at all? Jefferies feels one area that could be a good idea is companies that are key suppliers into the 5G physical plant, including 5G base stations. Four top companies are cited as top players, and all are rated Buy at Jefferies.

Analog Devices

This stock could very well continue to benefit from an increase in information technology and upcoming 5G spending. Analog Devices Inc. (NASDAQ: ADI) is a leader in the design, manufacture and marketing of analog, mixed-signal and digital signal processing integrated circuits for use in industrial, automotive, consumer and communication markets worldwide. It offers signal processing products that convert, condition and process real-world phenomena, such as temperature, pressure, sound, light, speed and motion, into electrical signals.

In 2017, the company introduced a highly integrated polyphase analog front end with power quality analysis designed to help extend the health and life of industrial equipment while saving developers significant time and cost over custom solutions. Achieving extremely accurate, high-performance power quality monitoring typically requires customized development, which can be expensive and time-consuming.

The company has among the best end-market exposure, with high communications and aerospace/defense market exposure, in addition to offering investors a powerful 5G content growth story. Plus, acquisitions over the past few years like Linear Technology and Hittite Microwave should provide revenue and additional cost synergies that are still coming.

Analog Devices investors receive a 2.16% dividend. The Jefferies price target for the shares is $131, and the Wall Street consensus target is $114.53. The stock closed Tuesday at $99.88 a share.

Marvell Technology

This is one of the favored mid-cap picks at Jefferies. Marvell Technology Group Ltd. (NASDAQ: MRVL) is a fabless supplier of mixed-signal and analog semiconductor products to a number of storage, computing and communication applications, including hard disk drives, personal computers, servers, Ethernet switches, printers and connectivity markets.

Top analysts around Wall Street are very positive on the company’s purchase of Cavium, and many feel the deal adds significantly to the growth element for the stock. The addition also helps make Marvell solidly positioned in data center, cloud, enterprise, security and 5G.

The dividend yield is 1.07%. Jefferies has a $29 price target, while the consensus target is $26.68. Shares closed Tuesday at $22.40, up over 3% on the day.

Lattice Semiconductor

This stock was hit hard recently and offers investors a great entry point. Lattice Semiconductor Corp. (NASDAQ: LSCC) designs, develops and markets programmable logic products and related software. That includes semiconductor devices, evaluation boards, development hardware and related intellectual property licensing, services and sales.

The company provides smart connectivity solutions powered by its low-power FPGA, video ASSP, millimeter wave and IP products to the consumer, communications, industrial, computing and automotive markets. The stock was clobbered Monday when in presentation materials for its Analysts Day the company’s financial target model for three to four years included revenue growth in the low double digits and gross margin above 62%.

The $15.50 Jefferies price objective compares to the $14.79 consensus estimate. The stock was last seen trading at $12.16, up over 6% on the day.

Xilinx

Shares of this top chip company have been absolutely mauled over the past month and offer an incredible entry point. Xilinx Inc. (NASDAQ: XLNX) is a leading fabless supplier of high-density programmable logic devices, which are standard integrated circuits that offer significant advantages over custom logic chips, such as application-specific integrated circuits. They are used extensively in key end markets such as communications.

At its recent Analysts Day, the company reiterated its commitment to invest in research and development to drive growth with operating expense guidance of $1.35 billion, which was 4% above Street estimates. While that caused some to slightly lower earnings estimates, the stock setup looks especially attractive now after the recent 20% or so pullback after posting first-quarter results that missed on margins.

The Jefferies price target is $156. The consensus target is $131.78, and share rose almost 5% on Tuesday to close at $105.71.

The bottom line for investors, and Jefferies is right on the money here, is that it will be quite a while before 5G wireless is sufficiently widespread for the average consumer in the United States to take advantage of it. In addition, tons of additional fiber will need to be deployed, and countless towers will need to be added as well. However, down the road a few short years, autonomous driving and other new catalysts could be huge for the companies involved.