Please ensure Javascript is enabled for purposes of website accessibility

Why Inseego Stock Fell Wednesday

By Jeremy Bowman - Jan 30, 2020 at 8:40AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the 5G stock dipped as comments from Apple seemed to tamp down expectations for the new telephony.

What happened

Shares of Inseego (INSG -1.05%) fell Wednesday, closing down 11.7%, along with other 5G stocks. Though there was no direct news out on the company or the broader 5G industry, Apple's earnings report the previous night and management comments afterward may have had an effect.

So what

First, Apple reported surprisingly robust growth in iPhone sales growth, up 8% and much better than expectations of a 1% decline. While that indicates that the iPhone 11 is a hit, it also could mean that consumers aren't holding out for an anticipated 5G iPhone later this year, which carries a broader warning for companies like Inseego, which makes hardware products including mobile 5G hot spots and is seen as a play on the coming 5G revolution.

5G appears over a smartphone

Image source: Getty Images.

On its earnings call, Apple also did little to burnish expectations for 5G. CEO Tim Cook dismissed one question about a 5G phone, saying, "We don't comment on future products," though he did allow that the technology was in its "early innings" of deployment. Inseego investors and others may have been hoping for more bullish comments about the 5G rollout and its potential.

Now what

Inseego shares have been on a tear over the last five months, nearly doubling as hopes for 5G have built, so investors may want to think of the sell-off as just taking some air out of the recent rally. 5G is still a small part of Inseego's business, as it was only expected to contribute $10 million in revenue in 2019, so it will take time for the new technology to have an effect on the company's financials. After Apple's comments, the need for patience may be beginning to dawn on investors.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Inseego Corp. Stock Quote
Inseego Corp.
$1.89 (-1.05%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.