Even with the economic damage caused by the spread of the novel coronavirus, some companies have managed to expand in 2020. A clear-cut example is the oft-cited 5G-focused company Ericsson (NASDAQ:ERIC). If you believe that the company will continue to grow, you can position yourself with ERIC stock today.
An increasing number of businesses around the world are responding to the call to step up to the 5G network. Indeed, doing so is practically a necessity at this point. Ericsson made an early and full commitment to providing 5G connectivity to businesses globally. And to this day, the company remains a fierce competitor in this niche market.
We can’t pretend that Ericsson is the biggest or most capital-rich company involved in 5G today. Yet, a compelling argument could be built in favor of a long position in ERIC stock. The company’s growth, at least in terms of market share, seems unstoppable at this point.
A Closer Look at ERIC Stock
Prior to the onset of the coronavirus, 5G was among the hottest topics not just among techies, but in the mainstream news. And ERIC stock was humming along nicely at the beginning of 2020. Some traders were preparing for a break-and-hold above $9, which seemed inevitable at that time.
Then came the pandemic, and all ambitious plans had to be put on hold. The bottoming process for ERIC shares took place in March at around the $6 level. But the suffering didn’t last too long as the stock price soon over-corrected to the upside, threatening to pierce the $10 area.
A pullback to $9 meant that value-oriented investors could get in at a more reasonable price point. And, they can anticipate another run at $10 and beyond, hopefully without another subsequent drop.
The Art of the Deal
If any company has mastered the skill of making deals with high-profile clients, it’s Ericsson. And every time the company inks a deal, its industry footprint grows and its standing as a 5G A-lister solidifies.
Perhaps none of Ericsson’s dealmaking is more significant than what the company has achieved in China. The company has every right to toot its own horn as Ericsson has reportedly “increased its footprint in China through 5G contract awards from all three major operators in China,” a coup that “will generate scale advantages and strengthen Ericsson’s position in the world’s largest 5G market.”
In other words, Ericsson is seriously threatening to dominate the Chinese 5G market. That’s not too shabby, considering the company is headquartered in Sweden.
Around the World with 5G
Along with the exciting news from China, ERIC stockholders can celebrate a slew of other international developments. It’s amazing to consider how much progress Ericsson is making as the world is still reeling from the impact of the coronavirus.
Where to begin? The United Kingdom is as good a place as any, as Ericsson recently announced that it has partnered with telecom-services provider O2 UK “to deploy its 5G radio access network (RAN) even farther across the UK, upgrading the existing 2G/3G/4G sites as part of a substantial network modernization program.”
Next, we’ll head over to Russia, where communications-service provider МТS has selected Ericsson to provide its high-speed MINI-LINK microwave solutions.
We can then take a detour to Canada, which of course is the home to communications-service provider Bell Canada. That entity reportedly “selected Ericsson 5G Radio Access Network (RAN) technology to support its nationwide 5G mobile and fixed wireless access deployment.”
And finally, we can end our world tour in scenic Germany. There, Telefónica Deutschland is choosing to use Ericsson’s dual-mode 5G Core to power an independent 5G core network by the year 2021.
The Bottom Line
We sincerely hope that you enjoyed our trip around the world, compliments of Ericsson’s impressive 5G capabilities and the company’s apparent dealmaking mastery. And feel free to pick up some shares of ERIC stock on your return trip. They could serve as a nice memento of your travels, as well as a generator of outsized returns.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, he did not hold a position in any of the aforementioned securities.