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Ericsson (ERIC), Intel Partner for Malaysia 5G Proliferation

Ericsson ERIC recently inked an agreement with Intel Corporation INTC to pool their individual resources and domain expertise for the higher proliferation of 5G across Malaysia. The collaboration also seeks to accelerate digitization and spur business enterprises to embrace 5G connectivity for improved performance across various verticals.

The companies intend to work in unison to develop 5G use cases in sectors such as manufacturing, transport and logistics. In addition, Ericsson and Intel plan to demonstrate how communications service providers can accelerate 5G adoption and expand their business-to-business engagements by showcasing the benefits of digitalization for emerging economies and the role of 5G connectivity in building sustainable and resilient digital economies.   

The collaboration is likely to sow the seeds for innovation and business transformation by further encouraging research on higher technology, such as 6G and stimulating the development of the regional economy.

Intel is gaining rapid strides in the data center business with integrated solutions that are highly competitive in prices. The company is also focusing on developing a complete product range targeting different market segments. Intel is betting big on the IoT business and is investing heavily to gain a higher market presence. While the focus was earlier on making the best computing chips and generating industry-leading margins from them, the company now prefers to focus on a product range targeting different market segments.

On the other hand, Ericsson is the world’s largest supplier of LTE technology with a significant market share and has established a large number of LTE networks worldwide. With the emergence of the smartphone market and subsequent usage of mobile broadband, user demand for coverage speed and quality has recently increased manifold. Further, to maintain superior performance as traffic increases, there is also a continuous need for network tuning and optimization. Ericsson is much in demand among operators to expand network coverage and upgrade networks for higher speed and capacity.

The company is focusing on 5G system development. It believes that the standardization of 5G is the cornerstone for digitizing industries and broadband. The deployment of 5G networks is expected to boost the adoption of IoT devices, with technologies like network slicing gaining more prominence. Ericsson currently has 145 live 5G networks across the globe spanning 63 countries.

The stock has lost 39.2% over the past year compared with the industry’s decline of 12.2%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Ericsson currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Picks

Arista Networks, Inc. ANET, sporting a Zacks Rank #1, is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 14.2% and delivered an earnings surprise of 14.2%, on average, in the trailing four quarters.

It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.

Juniper Networks, Inc. JNPR carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 7% and delivered an earnings surprise of 1.6%, on average, in the trailing four quarters.

Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence.

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