The Finnish telecommunications company Nokia (NYSE:NOK) has dealt with its share of struggles over the past year. Nokia stock continues to struggle against rivals like Ericsson (NASDAQ:ERIC) and Huawei.
In March, the company lost its long-time CEO Rajeev Suri over setbacks with 5G and losses in China. And during the first quarter of 2020, Nokia’s problems were exacerbated by the novel coronavirus, and its revenue fell 3%.
Wall Street analysts expect the company’s revenue to be down 4% over the entire year. And in March, the stock hit a 52-week low of $2.34 per share.
Given the company’s problems and the intense competition surrounding 5G, now may not seem like the time to invest in Nokia. But the stock has been steadily rising since mid-March, and there are still many opportunities available.
Here are five reasons to buy Nokia stock:
1. Nokia Stock has a Huge Opportunity With 5G
Nokia is technically still in the wireless phone business, but the real opportunity for the company lies in 5G. The company continues to steadily make strides in the 5G market.
In June, Nokia announced that China Unincom awarded the company a 10% share of its 5G core network. The deal included a variety of Nokia’s core networking products, including Nokia Software and ION products.
If you’re looking for 5G carriers to invest in, Nokia may not be the most obvious choice. But at less than $5 a share, there may be a long-term opportunity with Nokia stock.
2. Nokia Could Win Business From Huawei
Huawei has always been the global leader of telecommunications equipment. But increasingly, many companies are looking to minimize their dependence on Chinese technology. This means Nokia may have an opportunity to win business from Huawei.
For instance, the French telecom company Orange decided to award 5G contracts to Nokia and Ericsson, excluding Huawei. And major 5G contracts in Singapore went to Nokia and Ericsson as well.
And the U.S. is trying to ban companies that use products from Huawei and other tech companies. This could lead to some long-term gains for Nokia.
3. The Company’s 5G Slices Could be a Hit
One of the newest services Nokia is offering is network slicing, and it could help the company enter new markets. Network slicing allows service providers to partition their networks into slices to support specific services, use cases, or other business segments altogether.
According to GM Insights, the market for network slicing could reach $600 million by 2026, so there’s a huge growth opportunity there. However, most of Nokia’s competitors offer similar services.
4. Nokia is Overhauling Its Management
One Sept. 1, Pekka Lundmark will take the reins as the new CEO of Nokia. Nokia also recently named a new CFO and board chairman.
It’s still unclear how this leadership transition will play out, but it could be the change Nokia needs. Raymond James analyst Simon Leopold seems to think so, stating that he hopes the company will focus on “customer and market diversification while improving profitability.”
5. Nokia Stock is Inexpensive
And finally, Nokia stock is still trading at less than $5 per share. Depending on your point of view, this could be seen as a reason to avoid the stock. After all, it’s down more than 90% since its all-time high in 2000.
But the stock is steadily showing signs of improvement, and there are a lot of market conditions working in the company’s favor right now. And the company’s low entry point may provide a compelling reason to invest in Nokia stock.
Jamie Johnson is a personal finance freelance writer and has been writing for InvestorPlace since mid-2019. She writes for a number of other well-known financial sites, including Credit Karma, Quicken Loans, and Bankrate. As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.