The communication equipment industry is expected to grow markedly in the coming years, driven by rising internet penetration and the demand for faster connectivity. Moreover, the recently enacted infrastructure bill in the U.S. has provisions for improving broadband internet accessibility, which should further boost the communication equipment sector. And the growing demand for 5G networks should also drive the demand for communication equipment. With these factors as a backdrop, the shares of Cisco (CSCO), Motorola (MSI), Zebra Technologies (ZBRA), and Juniper Networks (NYSE:JNPR) have gained significantly in price over the past year and could soar higher. So, let’s pore over these names.
Communication equipment refers to hardware that is used for telecommunication purposes. These products include a vast spread of communication technologies, that include transmission lines, satellites, radios, routers, and even smartphones. The companies in this field are often engaged with telecommunication service providers.
In November, President Biden signed a $1 trillion-plus infrastructure bill into law. The bill allocates $65 billion for improving broadband internet access in rural areas. During the pandemic, the wireless industry has benefitted from user dependence for work and education. In addition, the demand for 5G services has increased, and companies are investing significantly to deploy 5G solutions as soon as possible. The global 5G services market is expected to grow at a 30.3% CAGR from 2022 – 2026, which could increase the need for advanced communication equipment.
Furthermore, the global telecom equipment market is expected to reach $866.8 billion by 2028, surging at a 6% – 8% CAGR. Therefore, we think fundamentally strong communication equipment stocks Cisco Systems, Inc. (NASDAQ:CSCO), Motorola Solutions, Inc. (NYSE:MSI), Zebra Technologies Corporation (ZBRA), and Juniper Networks, Inc. (JNPR) might be solid bets.