Nokia Corporation NOK has inked a partnership with Telekom Malaysia (“TM”) to enhance data center connectivity across Malaysia by deploying a cutting-edge Dense Wavelength Division Multiplexing (DWDM) network. The collaboration is set to revolutionize the management of growing data traffic, particularly benefiting TM's hyperscaler customers, who demand robust, real-time, low-latency services.
Nokia Solutions at the Core
The deployment will span a crucial route from the Malaysia-Thailand border to the Malaysia-Singapore border, directly linking the nation’s main data centers. This will serve as a backbone for handling the exponential growth in data traffic, ensuring seamless hyperconnectivity across key regions. The network's capacity will allow TM to expedite its adoption of AI, leveraging advanced automation to optimize network performance and operations.
At the heart of this innovation lies Nokia's fifth-generation super-coherent Photonic Service Engine (PSE-Vs). This state-of-the-art technology offers unparalleled transmission performance over long distances, which will be vital in managing the vast amounts of data generated by hyperscalers. The PSE-Vs also promotes environmental sustainability with its low energy consumption per bit, aligning with global energy efficiency standards.
Likely Windfalls for Nokia
For Nokia, this partnership is a significant win. Not only does it underscore the company’s leadership in optical networking solutions, but it also strengthens its foothold in the Asia-Pacific region. By supplying both the technical expertise and the locally manufactured DWDM gear, Nokia is well-positioned to ensure the smooth execution of this critical project. This, in turn, will enhance its revenue potential in this rapidly growing market while playing a pivotal role in transforming Malaysia’s data infrastructure.
Nokia is well-positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. Its installed base of high-capacity AirScale products, which enables customers to upgrade to 5G quickly, is growing fast. It is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them. Leveraging state-of-the-art technology, it is transforming the way people and things communicate and connect.
The company aims to create new business and licensing opportunities in the consumer ecosystem. It facilitates customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation required to support dynamic operations, reduce complexity and improve efficiency. It seeks to expand its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets.
The stock has gained 8.6% in the past year compared with the industry’s growth of 50.5%.
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Zacks Rank & Stocks to Consider
Nokia currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks, Inc. ANET, sporting a Zacks Rank #1 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experiences. Arista has a long-term earnings growth expectation of 17.2% and delivered an earnings surprise of 15%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products. It is well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
CommScope Holding Company, Inc. COMM, carrying a Zacks Rank #2 (Buy) at present, has long-term earnings growth expectations of 18.1%.
It is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. The company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.
Harmonic Inc. HLIT, currently sporting a Zacks Rank #1, is another key pick in the broader industry. Headquartered in San Jose, CA, the company provides video delivery software, products, system solutions and services worldwide.
With more than three decades of experience, HLIT has revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit Internet service to consumers' homes and mobile devices. Harmonic delivered an earnings surprise of 32.5%, on average, in the trailing four quarters.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Nokia Corporation (NOK) : Free Stock Analysis Report
Harmonic Inc. (HLIT) : Free Stock Analysis Report
CommScope Holding Company, Inc. (COMM) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
