Nokia stock (NYSE: NOK) has seen its price go down from a range of $7 to $2.34 from 2016, up until the early in the year. It has been reported that although Nokia stock has made a recovery, it is still on a downward spiral. It is not very difficult to understand why Nokia stock is in such a dire state.
For the last couple of years, the whole world has been fascinated by the impending launch of 5G. Every time the development seems to take a formal shape, something or the other curtails its momentum. Nokia although caught up in a downward spiral is prepared to adopt the technology, with a hope to see a rise in profits.
Nokia Stock and Its Competitors
With continuous underwhelming performances by the Nokia Stock, Ericcson stock (NASDAQ: ERIC) has seen its price reaching the highest point. It is thought that the success which Ericcson is going through right now is a result of various contracts of 5G which they have secured all over the globe. This has been seen as a key point as Ericcson is seen securing deals on the turf which is considered as a home for Huawei.
With the ongoing pressure of politics, Huawei’s development of 5G has taken a backseat. Nokia stock has not yet capitalized on this situation, but it is thought that if the time arises, it would be there to take its share.
The UK made a public announcement in the month of July, of phasing out Huawei within the coming 3 years. This initiative was a result of the efforts of the US to strike down Huawei.
The UK is eliminating Huawei following its 5G deal of exempting important data of users and not monopolizing the share market. The UK is an important market for the telecommunication department and influences other European associates as well.
Recently, Sweden has eliminated Huawei citing threats from technologies developed in Chinese. There has to be some consideration regarding potential national consumers. Keeping that in mind, Sweden’s move will be more beneficial to Ericcson than Nokia Stock, since, Ericcson is based in Sweden.
Nonetheless, the elimination of Huawei creates a clear road for Nokia inside European markets.
Popular Opinion on Nokia Stock
Nokia has lagged behind the 5G market and has to prove its credibility over Ericcson and other big banners.
Since 2017, Nokia has incurred inconsistent business and hasn’t lost much to the COVID-19 pandemic. However, Ericcson has a more consistent P/E quotient of 25 times increase in stock rates.
The Telecom industry intends to make big investments in developing 5G networks after the pandemic crash. Hence, Nokia stands a positive chance at bagging some profitable deals. In fact, they have already signed a deal of installing 4G connectivity on the Moon.
The stock market expects steady growth in the shares of Nokia in the coming year and the anticipated annual report.