Shares of 5G giant Nokia (NOK) are up a good 11% this week, the company has just announced that it is upping its guidance because business is showing stronger growth potential.
On July 29, the company plans to release updated guidance. Nokia had forecast full-year revenue in a range of $24.4 billion to $25.72 billion when converted to U.S. dollars. This boost could come from the China Mobile contract which the company could win a part of.
Ericsson stock rose 35% in 2020 as it gained market share in 5G wireless network equipment. However, Ericsson stock has underperformed thus far in 2021 only holds a Relative Strength Rating of 45 out of a best-possible 99.
In the U.S., Ericsson last year won more 5G wireless business from Verizon Communications at the expense of Nokia. However, Dish Network recently picked Nokia for its 5G wireless network infrastructure.
Outside of China, both Ericsson and Nokia have won more 5G wireless network orders as U.S. and other countries steer away from Huawei equipment over national security concerns.
J.P. Morgan upgrades NOK to $7.80
J.P. Morgan has turned bullish on Nokia stock, raising estimates by 2.2% which translates to 22.3% and 21.3% upgrades to 2021 and 2022. J.P. Morgan analysts Sandeep Deshpande and Varun Rajwanshi lifted shares to overweight from neutral, and the price target to $7.80 from $5.88 factoring in updated guidance coming soon.
The bottom line is that 5G has still a way to go and Nokia is leading the competition. You should be buying right now. It would not be a bad idea to get in early as possible because its a very long term hold which could start its growth cycle in the coming years, I expect 2022-2023 at most.