Because the remote working culture is here to stay even after the COVID-19 pandemic dissipates, the demand for advanced communication equipment is expected to increase. So, popular communication equipment stocks Cisco (CSCO) and Hewlett Packard Enterprise (NYSE:HPE) should benefit from the industry tailwinds. But which of these two stocks is a better buy now? Read more to find out.Cisco Systems, Inc. (NASDAQ:CSCO) in San Jose, Calif., designs, manufactures and sells internet protocol-based networking and other communications and information technology products. In addition, it provides infrastructure platforms, including networking technologies for switching, routing, and wireless products. In comparison, Hewlett Packard Enterprise Company (HPE) in Palo Alto, Calif., is an edge-to-cloud platform-as-a-service company that offers general-purpose servers for multi-workload computing and workload-optimized servers. In addition, it provides mobility and Internet of Things (IoT) solutions under the Aruba brand, including Wi-Fi access points, switches, routers, and sensors.
Since last year, communication equipment has been in high demand as the need for connected and high-end devices increased amid the COVID-19 pandemic, with people spending most of their time at home. Furthermore, communication equipment, such as LANs, WANs, and routers, are expected to continue witnessing increasing demand in the 5G era because remote working is expected to dominate even after the pandemic is beaten. According to a report by Market Research Future, the global telecom equipment market is expected to grow at an 11.23% CAGR by 2025. Therefore, we think both CSCO and HPE should benefit.
CSCO stock has gained 8.7% in price over the past month, while HPE returned 4.4%. Also, CSCO’s 30.1% gains year-to-date are higher than HPE’s 23% returns. Also, in terms of their past six months’ performance, CSCO is the clear winner with 27.4% gains versus HPE’s 3.2%.