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Nokia vs. Ericsson: Which Networking Stock is a Better Buy?

Published 05/04/2021, 11:38 AM
Updated 05/04/2021, 01:00 PM
© Reuters.  Nokia vs. Ericsson: Which Networking Stock is a Better Buy?

© Reuters. Nokia vs. Ericsson: Which Networking Stock is a Better Buy?

As more organizations push for high-bandwidth and new-generation technology to make a smooth transition from on-site to remote operations, the spending on networking infrastructure has been accelerating rapidly. This trend should benefit leading networking operators Nokia (NYSE:NOK) and Ericsson (BS:ERICAs) (ERIC). But let’s find out which of these stocks is a better buy now.Nokia Corporation (NOK) and Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) are two prominent telecommunications and networking companies that operate worldwide. Based in Finland, NOK operates through its Mobile Networks, Network Infrastructure, Cloud and Network Services, and Nokia Technologies segments. Headquartered in Sweden, ERIC operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other.

The launch of a slew of 5G services and the implementation of mobile edge computing to cater to the increasing penetration of smartphones and Internet of Things (IoT) devices have boosted the growth of telecommunication providers NOK and ERIC. In fact, growing internet traffic amid a remote working culture has been driving higher demand for better networking technology and connectivity. So, we think NOK and ERIC are uniquely positioned to benefit from a sizable market opportunity over the long run.

NOK has gained 19.7% year-to-date, while ERIC has returned 15.4% over the same period. In terms of their past month’s performance, NOK is the clear winner with 17.3% gains versus ERIC’s 3.8% returns. But which of these stocks is a better pick now? Let’s find out.

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