U.S. telecom stocks started the past week on a positive note, buoyed by optimism surrounding the proposed legislation to safeguard the interests of the broader industry. After an earlier bipartisan legislation for $190 billion funds for R&D, manufacturing and supply chain and an additional $52 billion for boosting production of semiconductor chips & telecommunications equipment over the next five years, the House subcommittee is currently considering nine tech and telecom bills to improve cybersecurity practices that support wireless networks. While protecting the networks and industry supply chain mechanism from external threats, the bills aim to foster innovation and competition for unhindered operations. However, the stocks traded flat mid-week and witnessed a downtrend later to pare the initial gains, triggered by uncertainty within the industry on reports that the government is likely to grant ‘special treatment’ to the automotive sector for chip shortages.
The lawmakers are reportedly giving final touches to a bevy of telecom bills to reduce America’s dependence on China-based hardware and address national security concerns over wireless networks from adverse foreign entities. These include legislation on cybersecurity policy and creation of a council to improve the security and reliability of U.S. communications networks. Two other bills on the list titled "TEAM TELECOM Act" and the "Secure Equipment Act of 2021" are aimed at strengthening the interagency review process and the approval guidelines to tackle national security concerns over FCC approval of communication products from foreign firms. Another bill titled the "Open RAN Outreach Act" is intended to make the NTIA responsible for imparting education and technical assistance to small communications providers for replacing gears from China-based firms like ZTE and Huawei.
While these bills offer a safety cushion to the industry and appear to have spurred an uptrend, reported federal favoritism to the auto manufacturing sector for production hiatus owing to chip shortage likely sparked a downslide. Industry experts observed that continued chip shortage and supply chain disruptions extended beyond semiconductors to basic structural components and affected production of nearly every element of the communications sector. These included infrastructure products such as routers, switches and base stations to the user terminal side items such as laptops, desktops and mobile phones. To add to the woes, rising inflationary pressure has increased production costs, adversely impacting sector margins. Although the government has employed certain administrative steps to tide over the storm, it is yet to yield broad-based results across the spectrum. Amid this backdrop, industry trade groups opined that it would be unfair if any particular sector is favored at the expense of the other.
Meanwhile, Huawei has reportedly secured one of the largest deals in the automotive industry when it secured a licensing deal for an undisclosed amount for use of its 4G technologies in connected vehicles manufactured by Volkswagen Group. The deal assumes significance as it was struck amid persistent U.S. diplomatic pressure and insistence to debar China-based firms from sensitive communication network system owing to alleged security threats.
Regarding company-specific news, collaboration, fiber deployment, network expansion and strategic deals primarily took center stage over the past five trading days.
1. AT&T Inc. T extended its long-standing business relationship with Google Cloud, a suite of cloud computing services offered by Alphabet Inc.’s Google, to unveil end-to-end solutions for improved customer experiences. The solutions are likely to facilitate diverse businesses to better harness edge connections and edge computing capabilities as increased 5G deployments give rise to a large quantum of data.
Powered by AT&T's wide network coverage, the edge computing solutions leverage Google Cloud's core capabilities in Kubernetes, AI, ML, data and analytics to offer a flexible tool to better analyze data and process low-latency, high-bandwidth applications. The collaboration particularly intends to enable customers to swiftly convert data into actionable intelligence, enabling unique digital experiences and smarter operations. The two companies aim to take their partnership to the next level by providing immersive customer experiences in industries like retail, healthcare, manufacturing and entertainment among others to help businesses add value to their operations.
2. Ciena Corporation CIEN partnered with Lumea, an Australia-based energy and telecommunications services provider, to revamp the latter’s telco infrastructure with avant-garde technology. Per the collaboration, Lumea will capitalize on Ciena’s WaveLogic Ai technology, which will enable it to deliver high-speed 100G+ wavelength services between its key data centers.
The partnership aims to empower new technologies such as 5G transmission and address networking challenges on the back of a streamlined infrastructure. It will not only significantly increase Lumea’s network capacity to support emerging bandwidth-intensive applications but also bridge the digital divide by driving innovation and making new-age technology accessible to more communities.
3. Telefonica, S.A. TEF announced that FiBrasil commenced its operations, involving the deployment of the fiber-to-the-home network in Brazil. FiBrasil is a fibre wholesale network, which was created out of a 50:50 joint venture between Telefonica Group and Caisse de dépôt et placement du Québec (“CDPQ”), a Canada-based investor in infrastructure, under a co-control governance model.
FiBrasil’s neutral fiber network is considered ideal for clients with lower capital requirements and shorter time-to-market. Consequently, this will help in augmenting its network footprint across various customer segments, thereby, speeding up the transition to fiber for digital development.
4. Nokia Corporation NOK recently announced that it will provide Red Electrica de Espana (REE) with an IP/MPLS network and Dense Wave Division Multiplexing optical transport network. REE is the Spanish electricity transmission system operator. Its 800-site network is used to manage a nationwide transmission grid.
The company’s IP/MPLS and optical transport networks will improve efficiency, expand broadband services and enable distribution of renewable power. It will support applications that will be critical in IoT-based asset management and energy distribution.
5. Canadian telecommunications company, TELUS Corp. TU has expanded its 5G network to Cochrane as part of its C$54 billion investment in Alberta through 2024. With this service launch, residents and enterprises will have access to TELUS’ super-fast 5G network.
Working in partnership with equipment suppliers like Ericsson, Nokia and Samsung, TELUS is expanding its 5G network to an additional 529 new communities across the country. It aims to cover more than 70% of the population by the end of this year.
The following table shows the price movement of some of the major telecom stocks over the past week and six months.
Image Source: Zacks Investment Research
In the past five trading days, Motorola has been the best performer with its stock gaining 3.4%, while Bandwidth declined the most with its stock falling 2.8%.
Over the past six months, Motorola has been the best performer with its stock appreciating 22.6%, while Bandwidth declined the most with its stock falling 15.3%.
Over the past six months, the Zacks Telecommunications Services industry has gained 11.6% while the S&P 500 has rallied 15.5%.
Image Source: Zacks Investment Research
In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the interests of the industry as it battles inflation and chip shortage with the earnings season lurking around the corner.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
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.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Zacks Investment Research
In what hardly qualifies as a surprising development, shares of both Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) fell in price on Thursday. This was on the back of a Supreme Court decision that struck down a key government vaccination mandate. After the smoke cleared, Pfizer's stock price fell by nearly 2%, while the far smaller and less diversified BioNTech suffered an 8% hit.
The Oracle of Omaha knows how to beat inflation. So ride his coattails.
“Retiring early is a dream for many people,” said Landon Tan, a certified financial planner. “But those years of not working diminish your chance of a successful retirement more than almost any other metric we toggle when making financial plans.” When planning to retire early, those extra years need to be considered – at the forefront of retirement, but also in the back end if you live longer than anticipated.
There’s nothing magical about a stock index hitting the 10% decline that constitutes what Wall Street considers to be a correction. The odds that stocks will rise are no different after a 10% decline than they are before. This is important to keep in mind now that the Nasdaq Composite Index (COMP) is losing ground quickly, down 2.5% on Jan. 13 alone and off 7.8% from its closing high on Nov. 19, 2021.
Shares of Chinese electric vehicle maker Nio (NYSE: NIO) were moving lower on Thursday. As of 1:30 p.m. ET, the company's American depositary shares were down about 2.3% from Wednesday's closing price. Nio doesn't own a factory directly; its vehicles are built in a plant owned by a joint venture between it and its manufacturing partner, state-owned automaker Jianghuai Automobile Group.
Shopify rolled out new algorithms in mid-December that resulted in several updates. In addition to minor changes to image requirements, it also included significant modifications to how the platform recommends apps that help fill out Shopify's robust ecosystem. Many developers pay for advertising to drive traffic to their apps in Shopify's App Store.
(Bloomberg) — The loyalty of Cathie Wood’s legion of fans may be finally waning, as the new year bloodbath in speculative technology stocks hands the star money manager a miserable start to 2022.Most Read from BloombergCannabis Compounds Prevented Covid Infection in Laboratory StudyFrequent Boosters Spur Warning on Immune ResponseSay Goodbye to Self-Isolating, WFH Mandates, Mass TestingSupreme Court Blocks Biden’s Shot-or-Test Rule for WorkersShould I Be Wearing an N95 or KN95? Understanding th
(Bloomberg) — JPMorgan Chase & Co. posted a decline in trading revenue that was steeper than analysts expected, and both commercial and consumer loans fell from a year earlier.Most Read from BloombergCannabis Compounds Prevented Covid Infection in Laboratory StudyFrequent Boosters Spur Warning on Immune ResponseSay Goodbye to Self-Isolating, WFH Mandates, Mass TestingSupreme Court Blocks Biden’s Shot-or-Test Rule for WorkersShould I Be Wearing an N95 or KN95? Understanding the Evolving Advice o
JPMorgan and Wells Fargo earnings beat Q4 forecasts, with Citigroup set to report before the open. Bank stocks were mixed early Friday.
Shares of southeast Asia e-commerce and video game giant Sea Limited (NYSE: SE) were down 8% today as of 1:30 p.m. ET. It deepens the sell-off the stock has suffered since October when Sea reached its all-time high. Sea has been using its highly profitable video game segment (publisher Garena, responsible for the international hit Free Fire) to invest in its e-commerce app Shopee.
Analyzing and updating your portfolio periodically is one way to ensure that it stays in sync with your investment objectives. Even after a 53% fall in one year, Plug Power stock is up 1,600% over a three-year timeframe.
Yahoo Finance's Adam Shapiro and Emily McCormick highlight four stocks to watch: Hawaiian Airlines, Virgin Galactic, Taiwan Semiconductor, and Ford.
(Bloomberg) — French and German electricity prices jumped after Electricite de France SA revised down the production forecast for its nuclear fleet that’s vital to keep the lights on in Europe. Most Read from BloombergCannabis Compounds Prevented Covid Infection in Laboratory StudyFrequent Boosters Spur Warning on Immune ResponseSay Goodbye to Self-Isolating, WFH Mandates, Mass TestingSupreme Court Blocks Biden’s Shot-or-Test Rule for WorkersShould I Be Wearing an N95 or KN95? Understanding the
Is Novavax stock a buy or a sell after filing additional data in the hopes of seeking a U.S. authorization? Is NVAX stock a buy or sell?
Shopping for some tech bargains ahead of the Federal Reserve's rate hikes? Try these on for size, says one veteran tech analyst.
The memecoin was no meme for traders shorting dogecoin on Friday.
Shares of Bed Bath & Beyond (NASDAQ: BBBY) were climbing this week, up 9.4% as of Thursday's close, according to data from S&P Global Market Intelligence. The catalyst was insider buying coming after last week's earnings report. CFO Gustavo Arnal bought 15,000 shares; Chief Merchandising Officer Joseph Hartsig bought 5,000 shares; Chief Customer Officer Rafeh Masood bought 7,000 shares, and director Joshua Schechter bought 6,000 shares.
CFRA Research Director Kenneth Leon joins Yahoo Finance Live to discuss upcoming bank earnings and the outlook for the U.S. economy.
Stock futures rose Thursday evening to steady after a tech-driven selloff during the regular trading day.
Don't expect gains in 2022 if the Federal Reserve sticks to its guns on rate hikes and tightening overall financial conditions, says Kyle Bass.