NOK Inventory: | InvestorPlace

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I bear in mind again within the Nineteen Nineties, Nokia (NYSE:NOK) was the highest telephone maker on the earth. I used to be very excited after I purchased a Nokia telephone with a QWERTY keyboard and the flexibility to operate off Wi-Fi. If solely I’d additionally purchased NOK inventory…

a backdrop featuring the Nokia (NOK) logo with a mobile phone featuring the Nokia logo on its screen in the foreground

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The Communicator 9000 was a highly regarded telephone overseas however you may solely purchase one within the U.S. off of eBay (NASDAQ:EBAY) from individuals who have been residing overseas. Whereas Blackberry (NYSE:BB) was the long-lasting keyboard telephone, my NOK was one of many first telephones to supply Wi-Fi connectivity and high quality digicam telephones.

It was actually a cool, if clunky, machine. However the factor was, there have been only a few Wi-Fi hotspots and fewer individuals curious about increasing them. I imply, Google was nonetheless combating it out with Netscape and Lycos.

However as will all cell applied sciences, NOK’s dominance — at the very least within the US — didn’t final previous the primary cell wave. Right this moment, NOK is the No. 10 telephone maker on the earth.

NOK Inventory Past Telephones

As with most actual cell phone makers, there must be one thing past the handset to maintain buyers . I imply, the corporate has been round for 156 years and NOK inventory sports activities a $34 billion market capitalization, so it has constructed an actual enterprise past cellphones.

Truly, Nokia misplaced traction when smartphones turned the brand new massive factor. The Finnish firm determined to go after the immense international market that didn’t have cellphones in any respect, not the choose markets the place demand from smartphones was rising.

A few of that miscalculation got here as a result of networks have been fairly primitive, and adoption was patchy, at greatest, outdoors of developed nations. And placing low cost cellphones in individuals’s arms appeared like a a lot better enterprise than hoping high-end networks and telephones would catch on. The remaining is historical past.

Effectively, nearly historical past. Nokia misplaced its visibility amongst shoppers, however the Nordics telecom continued to be a serious participant behind the scenes. In 2014, it unloaded its handset division to Microsoft (NASDAQ:MSFT) for greater than $7 billion. Good for NOK, unhealthy for MSFT and the Home windows telephone.

That allowed NOK to deal with the connectivity of cell telecom. It has helped construct out requirements like GSM, 3G, and LTE applied sciences and the tools to assist these networks. Right this moment, it’s a key participant in 5G know-how, with main companions creating networks in China, Canada, and Europe.

Don’t Mistake Visibility for Success

NOK inventory seems to be like an also-ran to most U.S. buyers who bear in mind its cellphones. However to anybody who follows the telecom sector in depth, Nokia stays a major participant. It’s a extremely revered in Europe, the Center East and Asia. And its tools enterprise is brisk across the globe.

Granted, there are extra rivals as of late. However the lack of its handset dominance isn’t reflective of the complete firm’s disarray.

Actually, after the dotcom bubble burst, Nokia misplaced its high-flying superstar, and it was within the wilderness for some time. And when it reemerged, there have been a brand new slew of firms with a brand new technology of smartphones that started to dominate the panorama.

However its infrastructure and R&D made these new developments potential. And the corporate continues to be a serious pressure behind the scenes.

It’s ironic that its 21st century comeback within the U.S. is as a meme inventory. That notoriety has actually added gasoline to the inventory’s 53% rise yr thus far. To place that run into perspective, NOK inventory is up solely 18% prior to now 12 months.

One in all NOK’s key 5G applied sciences is that it will possibly convert indicators of various carriers to a 5G sign. It additionally just lately received a contract within the Netherlands to supply a next-gen optical fiber community to one in every of largest web firms within the Netherlands.

Hopefully this success with drive the meme merchants and different foolish cash out for sexier long-shots. The inventory popped just lately however is now slowly shedding steam.

In case you’re a long-term investor, NOK inventory is an fascinating hypothesis round $5 a share.

On the date of publication, GS Early didn’t have (both instantly or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Tips.

GS Early has been an award-winning monetary author and editor for almost three many years, working with most of the main monetary editors and publishers throughout that point. He’s seen a couple of issues and heard a lot.

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