5 Telecom Stocks to Connect Your Portfolio to Solid ROI

The telecom sector witnessed healthy demand trends in 2024 with an accelerated pace of 5G deployment and increased fiber densification driven by a rising user propensity to stay abreast of the latest digital innovations.Despite a challenging macroeconomic environment owing to geopolitical conflicts, raging wars, inflationary pressures and uncertain business conditions, the telecom stocks industry seems to have benefited from higher demand for scalable infrastructure for seamless connectivity amid a wide proliferation of IoT devices.For the new year, five strong telecom stocks to consider are Arista Networks, Inc. ANET, InterDigital, Inc. IDCC, Qualcomm Incorporated QCOM, Ubiquiti Inc. UI and AST SpaceMobile, Inc. ASTS.Telecom Stocks Focus on Evolving 5G EcosystemBilled as the technology of the future with faster download speed and low latency, 5G is touted as the primary catalyst for Generative AI (artificial intelligence) and next-generation IoT services. These include connected cars, augmented reality, virtual reality platforms, smart cities and connected devices that are likely to revolutionize key industry verticals. Leading telecom firms within the industry have also been deploying the C-Band spectrum to gain additional coverage.These mid-band airwaves offer significant bandwidth with better propagation characteristics for optimum coverage in rural and urban areas compared with mmWave. With low latency and increased bandwidth, business enterprises are increasingly embracing the exciting possibilities offered by AI and the IoT (Internet of Things) via real-time mobile data transfer. As the 5G ecosystem evolves, customers are expected to experience significant enhancements in coverage and speed.Cloud, Fiber Networks Gaining PrecedenceThe industry is benefiting from a software-driven, data-centric approach that helps customers build their cloud architecture and enhance their cloud experience. Fiber networks are essential for deploying small cells that bring the network closer to the user and supplement macro networks to provide extensive coverage. Telecom service providers are increasingly leaning toward fiber optic cable to meet the burgeoning demand for cloud-based business data and video streaming services by individuals. Moreover, the fiber-optic cable network is vital for backhaul and last-mile local loops, which are required by wireless service providers to deploy the 5G network.Network ConvergenceWith operators moving toward converged or multi-use network structures, combining voice, video and data communications into a single network, the industry is increasingly developing solutions to support wireline and wireless network convergence. The industry players have enabled enterprises to rapidly scale communications functionalities to various applications and devices with easy-to-use software application programming interfaces. The wide proliferation of cloud networking solutions further increases storage and computing on a virtual plane. As both consumers and enterprises use the network, there is tremendous demand for quality networking equipment.Steady investments by leading carriers to upgrade their network infrastructure to meet the growing demand for flexible data, video, voice and IP solutions seem to have buoyed the sector. As the 5G ecosystem evolves with increased deployment across the globe, it is likely to offer a plethora of opportunities for diverse industries to spearhead innovation and redefine our daily lives. Riding on such growth drivers, various telecommunication firms are poised to benefit in 2025 and beyond and investors could gain a healthy return on investment (ROI) if they invest in these stocks.5 Telecom Stocks to WatchArista Networks, Inc. ANET: Santa Clara, CA-based Arista provides cloud networking solutions for data centers and cloud computing environments. The company holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. It is increasingly gaining market traction in 200- and 400-gig high-performance switching products. It remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.Arista has a software-driven, data-centric approach to help customers build cloud architecture and enhance their cloud experience. It is witnessing solid demand trends among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack. The versatility of Arista’s unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from its competitors.With an average broker recommendation (ABR) of 1.66, the stock has gained 88.3% over the past year. Earnings estimates for Arista for the current year have moved up 22.2% since December 2023. It has long-term earnings growth expectations of 17.1% and delivered an earnings surprise of 14.8%, on average, in the trailing four quarters. It has a VGM Score of B. Arista carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.InterDigital, Inc. IDCC: Headquartered in Wilmington, DE, InterDigital is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks.A well-established global footprint, diversified product portfolio and ability to penetrate different markets are key growth drivers for the company. Apart from a strong portfolio of wireless technology solutions, the addition of technologies related to sensors, user interface and video to its offerings is likely to drive considerable value, given the massive size of the market it offers licensing technologies to.With an ABR of 2.25 and a VGM Score of A, the stock has gained 77.8% over the past year. Earnings estimates for InterDigital for the current year have moved up 137.1% since December 2023. This Zacks Rank #1 stock has long-term earnings growth expectations of 15% and delivered an earnings surprise of 163.7%, on average, in the trailing four quarters.Qualcomm Incorporated QCOM: Headquartered in San Diego, Qualcomm is a fabless semiconductor company. It is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches.Leveraging processors with multi-core CPUs with cutting-edge features, amazing graphics and worldwide network connectivity, Qualcomm Snapdragon mobile platforms are fast, with superb power efficiency. Smartphones and mobile devices built with Snapdragon mobile platforms enable immersive augmented reality and virtual reality experiences, brilliant camera capabilities, superior 4G LTE and 5G connectivity with state-of-the-art security solutions.With an ABR of 2.03 and a VGM Score of A, the stock has gained 11.9% over the past year. Earnings estimates for Qualcomm for the current year have moved up 10.5% since December 2023. This Zacks Rank #2 stock has long-term earnings growth expectations of 6.6% and delivered an earnings surprise of 7.6%, on average, in the trailing four quarters.Ubiquiti Inc. UI: Headquartered in New York, Ubiquiti offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. It maintains a proprietary network communication platform that is committed to reducing operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.The company has made significant investments to optimize inventory levels by reducing lead times and support the growing number of customers. Ubiquiti follows a scalable community-led approach based on product feedback from customers, while periodic reporting by channel partners has added to operational strength. We expect this resilient business model to contribute significantly to its growth momentum through disruptive price offerings.With an ABR of 3.5, the stock has gained 156% over the past year. This Zacks Rank #1 stock has a VGM Score of B.AST SpaceMobile, Inc. ASTS: This Midland, TX-based broadband service provider is reportedly developing the first and only global cellular broadband network in space based on its extensive IP and patent portfolio. With a diverse portfolio of more than 3,400 patent and patent-pending claims worldwide for the direct-to-cell satellite ecosystem from space to Earth, AST SpaceMobile’s remarkable transformation in recent months offers a competitive edge across the broader technology market.The SpaceMobile service is compatible with all major brands available in the market and connects directly to everyday mobile phones. It is based on a novel technology that delivers broadband connectivity from space to unmodified mobile devices. It provides a service to fill cellular coverage gaps in a differentiated approach compared to other space-based communication services. This helps AST SpaceMobile eliminate connectivity gaps for ubiquitous space-based network connectivity.With an ABR of 1, the stock has gained 341.4% over the past year. AST SpaceMobile carries a Zacks Rank #2.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>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 QUALCOMM Incorporated (QCOM): Free Stock Analysis Report InterDigital, Inc. (IDCC): Free Stock Analysis Report Arista Networks, Inc. (ANET): Free Stock Analysis Report Ubiquiti Inc. (UI): Free Stock Analysis Report AST SpaceMobile, Inc. (ASTS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks