Does your portfolio need some new growth names, but you’re leery of adding the market’s most obvious and overcrowded trades? If so, you’re not alone. Most of the market’s most popular picks are still overbought and overvalued. You’d be better served with something a bit off the beaten path.
Consider adding a stake in Nokia (NYSE: NOK) sooner rather than later. Holding out for a pullback from its recently reached multiyear high might help a little. But being unwilling to step in even at this frothy valuation could just as easily be a mistake.
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You likely know Nokia as the Finnish company that used to be a mobile phone powerhouse. The advent of several different smartphone players mostly displaced its branded handhelds, although its technology is still found within plenty of mobile devices. It also supplies a range of cellular connectivity equipment to mobile phone network operators while also providing wireless connectivity hardware to data centers, corporate campuses, connected factories, and more.
None of it, however, is especially exciting growth-driving stuff. Last year’s sales were only up 2% year over year. Now look at the future. Nokia is positioned for explosive growth. And it’s got everything to do with the advent of artificial intelligence (AI).
But first things first.
You likely understand that AI not only requires a great deal of digital data but also produces just as much actionable information.
The growing problem? Receiving and sending this data, particularly when it must be done with wireless connections (cars, autonomous robots, remote sensors, etc.). The current fifth-generation (5G) networks in use today aren’t capable of handling the looming swell of all this digital data. It’s going to take something newer and better, like 6G connectivity.
Nokia has, of course, been working on next-generation wireless networking for as long as the current generation of solutions has been the norm. However, so have its rivals.
The company scored a major win in October when artificial intelligence titan Nvidia announced a partnership with Nokia to co-develop a radio access networking platform that will be powered by the AI needed to make this tech capable of handling the oncoming storm of digital data that Nvidia is largely helping create.
