Motorola (NYSE:MSI) made headlines on Thursday when CEO Greg Brown appeared on an interview with CNBC, expressing robust demand. In response, MSI stock moved up in the late Friday morning session, gaining almost 2%.
The current iteration of Motorola essentially succeeded the telecommunications giant of the same name. In 2011, the company split off into two divisions, one focused on video and telecom equipment, along with related systems and services, while the other centered on mobility. Lenovo Group (OTCMKTS:LNVGY) later acquired the mobility arm, which included its smartphone line.
Now, Motorola commands attention for its public safety and enterprise security products. Here, Brown reported encouraging developments, boding well for MSI stock. “What we do is a need to have, not a nice to have. This is the strongest demand environment I’ve ever seen,” said Brown.
Further, the chief executive noted that MSI stock will likely benefit from underlying private-network radio upgrade cycles. Per CNBC, “Motorola makes two-way radios used by police and fire departments; security video systems; and command center software, among other things.”
“Those radios refresh every seven years. And we’re in the first or second inning radio refresh here in North America — so New York, Chicago, Las Vegas, L.A., they’re Motorola,” Brown said.
MSI Stock May Benefit from Relief Bill and Market Demand
Another positive catalyst for MSI stock stems from the coronavirus pandemic relief that President Joe Biden signed last year. Under the $1.9 trillion legislation, dedicated funds exist for boosting public safety spending.
At the time of the signing, Biden stated that “more money should be spent on public safety before the summer months, which typically bring a spike in violent crime,” according to an AP description. “Taking action today is going to save lives tomorrow,” Biden remarked.
Potentially bolstering demand for MSI stock is broader demand globally for two-way radios. According to The Insight Partners, the market size for such radio equipment reached $7.88 billion in 2021. From there, experts project that the segment will expand at a compound annual growth rate of 6.2% to 2028, where it may reach a valuation of $12.03 billion.
Combined with other specialty arms of Motorola, the entity carrying the legacy brand could make an intriguing comeback.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.